Douglas Dynamics, Inc. Annual Report 2024

FY2024 Annual Report · Douglas Dynamics, Inc.

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ANNUAL REPORT
20
24

1
Douglas Dynamics
2025 Shareholder Letter

Dear Fellow Shareholders,
Let me begin with an obvious statement; I did not expect to be
writing a shareholder letter for the annual report again when I
retired at the end of 2018! However, the business world
changes quickly. When asked, I was honored to step back in
and lead the company as Interim President and CEO,
beginning in the summer of 2024. Having remained actively
involved in the company as Chairman of the Board of Directors,
the
return
to
an
operational
leadership
role
was
straightforward, and I had strong working relationships with all
our senior leaders from my previous 18-year tenure as CEO.

Over the nine-month period I served as interim President and
CEO, I dug deeper into the business and was pleased to
confirm that the company was in a strong operating position.
This was in no small part due to the difficult but necessary work
completed by Sarah Lauber, Mark Van Genderen, and their
teams in the first few months of the year with the
implementation of the 2024 Cost Savings Program. The other
major factor was the hard work completed in previous years
from the Solutions team, led by Pat Miller and Chad Barker. As
market
conditions
improved,
the
team’s
continuous
improvement efforts really paid off, which is clear in the
segment’s results for the year.

I am pleased to say that I have now returned to my role as
Chairman of the Board of Directors following our recent
announcement, which confirmed the appointment of Mark Van
Genderen as President and CEO of the company. Everyone
on the Board of Directors agreed Mark was the right candidate
for the role, and I was more than happy to pass the torch. I am
certain the transition will be smooth as Mark had already been
working in a significant leadership role across the company as
Chief Operating Officer.

Mark joined Douglas Dynamics in 2020 after spending 21
years in multiple leadership roles at the Harley-Davidson Motor
Company. He has developed a deep understanding of our
industry, our business, and our people, and he has
demonstrated an unwavering commitment to developing our
culture, which makes him the ideal person to lead Douglas
Dynamics into its next phase of growth.

In addition, we recently appointed a highly qualified new
President of Work Truck Attachments, Chris Bernauer. Chris is
a dynamic leader who has had a successful career consistently
delivering strong financial and operational performance. He
joins us with over 30 years of experience in the manufacturing
sector, where he held roles across multiple disciplines,
including engineering, sales, and marketing, primarily in the
automotive, motorcycle, and marine sectors. With our
leadership team now in place, we are focused on execution
and building upon our 2024 results.

2024 in Review
After a challenging start to the year, we ended on a positive
note. For 2024, consolidated results improved across all the
main metrics we track when compared to the prior year. In
short, the results were primarily driven by robust growth in the
Solutions segment and increased margins in the Attachments
segment.
There were dramatic differences in the circumstances our two
segments faced, which was reflected in their results. However,
the common denominator between Attachments and Solutions
continues to be the grit and determination shown by our people
in addressing the challenges we have faced in recent years.

Work Truck Solutions Results
The Solutions segment entered 2024 with strong momentum,
which continued throughout the year. I want to congratulate the
Solutions team for producing a record annual performance.
The team exceeded our expectations, delivering impressive
top and bottom-line growth for the third consecutive year. That
being said, it took our teams’ ingenuity to navigate a changing
marketplace. We maximized performance, which returned us
to pre-pandemic levels of profitability.

Demand and backlog from municipal customers remain robust,
with large multi-year municipal contracts on which we will
deliver in 2025 and 2026. Commercial demand includes both
areas of strength and areas of softness, and, as we have
previously mentioned, we are focusing more attention on fleet
business opportunities, where the chassis supply is currently
the strongest.

I am pleased to report that our total backlog at the end of 2024
increased to $348 million, driven by strong municipal bookings.
It is terrific to see the robust backlog continue into 2025, which
gives us confidence in the pipeline of business flowing into
Solutions in the coming years.

In summary, Work Truck Solutions produced a record year, as
the teams effectively managed their operations to deliver
fantastic results, and the outlook for 2025 and beyond also
remains positive.

Work Truck Attachments Results
While there is no doubt it has been a tough year at
Attachments, we are just as proud of what we have been able
to produce under the circumstances. The challenging work
completed in 2024 to streamline our operations and adapt to
recent weather patterns is already paying off. We operated
efficiently in a tough environment and delivered improved
margins compared to last year. Given the circumstances, our
teams performed extraordinarily well, and we couldn’t have
asked them for more.

While winter is far from over, we feel comfortable saying that
the 2024 - 25 snow season will be better than the previous
year. In general, this has certainly looked more like a typical
winter across the country and should remind everyone that
weather will continue to move in cycles. With the more frequent
snowstorms, and a more typical winter unfolding, dealer
sentiment and financial health remains strong, and inventory
levels continue to fall back towards average. Of course, the
lengthened equipment replacement cycle based on the lower
snowfall of the past few years will remain a near-term factor,
and we will continue to diligently analyze trends and end user
demand.

2
We continue to optimize our business and have proven once
again that we know how to manage through challenging times,
while remembering to look to the medium to long-term, as we
know the impact of low snowfall is temporary. We will remain
optimistic yet cautious, and we will be ready to ramp up and
take advantage of opportunities as they arise. The bottom line
is, we are in a great position to leverage the business as
demand returns.

A crucial part of our success during the year was the 2024 Cost
Savings Program, which exceeded expectations, producing
pre-tax savings of more than $10 million in the year. We
appreciate the difficult but necessary work our teams
undertook during 2024 to reduce costs and improve
profitability, allowing us to operate from a position of strength
in 2025 and beyond.

Sale Leaseback Transaction & Capital Allocation
Another important change during the year was the completion
of a $64.2 million sale-leaseback transaction in September.
With the deal complete, our seven facilities continue to serve
as critical elements of our operations, ensuring continuity and
supporting long-term growth plans. We used most of the net
proceeds to pay down our term loan debt, which allowed us to
de-lever. This transaction highlights our commitment to
enhancing our financial flexibility while maintaining operational
continuity. The long-term lease agreements also reinforce our
commitment to the communities in which we have operated for
decades.

Our approach to capital allocation remains largely unchanged.
The dividend remains our priority, and we are maintaining the
current quarterly cash dividend of $0.295 per share for the first
quarter of 2025. With a lot of demanding work completed last
year, our balance sheet is strong and provides us with
additional options moving forward. We are comfortable with
our current leverage and expect to remain within our target
ranges in 2025. We plan to invest in the business in 2025, with
capital expenditures expected to be towards the higher end of
our traditional range of 2% to 3% of revenue.

When considering our position on potential acquisitions, while
our disciplined approach remains consistent, our ability to
execute on deals has improved over the past six months. Over
the long-term, we hope to find manufacturing companies with
complex attachments that need to be professionally upfit onto
work trucks to bring into our portfolio. In addition, we intend to
focus on companies with strong brands, intellectual property,
growth potential, and that are a strong cultural fit with our
company. We are now in a position where we could consider
small and medium-sized acquisitions if we find the right
opportunity. Having said that, we will maintain our disciplined
approach and are not actively pursuing any deals at this time.

In summary, the diversification process we began a decade
ago is helping us manage through tough times. As we have
seen in recent years, one segment has performed well while
the other was negatively impacted by market conditions. With
unusually low snowfall impacting Attachments in recent years,
our Solutions segment produced a record year in 2024 and
improved results for the third year in a row.

Our company is built to manage through uncertainty, and 2024
clearly demonstrated that we make tough decisions, when
necessary, to protect the long-term financial and operating
health of the company. We will continue to manage through the
short-term challenges, while keeping our focus on the long-
term future, to ensure we have the highest quality products in
place to maintain and expand our market-leading positions.
Moving forward, we are in an outstanding position to leverage
our operational strengths and drive further earnings power
over the long-term.

We are confident about the future potential of our company as
we address the opportunities on the horizon and deliver
improvements. Everyone at the company is enthusiastic about
the opportunities ahead for Douglas Dynamics, and we
appreciate your support!

Sincerely,

James (Jim) L. Janik
Chairman of the Board of Directors

3
Forward Looking Statements

This document 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, our ability
to manage general economic, business and geopolitical
conditions, including the impacts of natural disasters, labor
strikes, global political instability, adverse developments
affecting the banking and financial services industries,
pandemics and outbreaks of contagious diseases and other
adverse public health developments, increases in the price
of steel or other materials, including as a result of tariffs,
necessary for the production of our products that cannot be
passed on to our distributors, our inability to maintain good
relationships with our distributors, our inability to maintain
good relationships with the original equipment manufacturers

with whom we currently do significant business, lack of
available or favorable financing options for our end-users,
distributors or customers, increases in the price of fuel or
freight, a significant decline in economic conditions, the
inability of our suppliers and original equipment manufacturer
partners 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, including policy or regulatory changes
related to climate change, 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, or our ability to execute repurchases under our
stock repurchase program, our inability to effectively manage
the use of artificial intelligence, our inability to compete
effectively against competition, our inability to successfully
implement our new enterprise resource planning system at
Dejana, 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, 2024 and any subsequent Form 10-Q
filings. 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.

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
☒
Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the fiscal year ended December 31, 2024
or
☐
Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from to

Commission File No. 001-34728
DOUGLAS DYNAMICS, INC.

(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation or organization)
13-4275891
(I.R.S. Employer Identification No.)

11270 W Park Place Ste. 300
Milwaukee, Wisconsin
(Address of principal executive offices)
53224
(Zip Code)

Registrant’s telephone number, including area code (414) 354-2310

Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, par value $.01 per share
PLOW
New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: NONE

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒.

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes ☒ No ☐.

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to
Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit
such files). Yes ☒ No ☐.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company,
or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth
company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐
Accelerated filer ☒
Non-accelerated filer ☐
Smaller reporting company ☐
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with
any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its
internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that
prepared or issued its audit report. ☒

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included
in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation
received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒.

At June 28, 2024, the last business day of the registrant’s most recently completed second fiscal quarter, the aggregate market value of the voting
stock of the Registrant held by stockholders who were not affiliates of the Registrant was approximately $540 million (based upon the closing price of
Registrant’s Common Stock on the New York Stock Exchange on such date). At February 25, 2025, the Registrant had outstanding an aggregate of
23,094,047 shares of its Common Stock.

Documents Incorporated by Reference:

Portions of the Proxy Statement for the Registrant’s Annual Meeting of Shareholders to be held on April 29, 2025, which Proxy Statement will
be filed with the Securities and Exchange Commission no later than 120 days after the close of the fiscal year ended December 31, 2024, are incorporated
into Part III.

1
Table of Contents

PART I .............................................................................................................................................................................
2
Item 1.
Business ........................................................................................................................................................
3
Item 1A. Risk Factors ..................................................................................................................................................
12
Item 1B. Unresolved Staff Comments.........................................................................................................................
23
Item 1C. Cybersecurity ...............................................................................................................................................
23
Item 2.
Properties ......................................................................................................................................................
24
Item 3.
Legal Proceedings ........................................................................................................................................
25
Item 4.
Mine Safety Disclosures ...............................................................................................................................
25
PART II ............................................................................................................................................................................
26
Item 5.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities ..................................................................................................................................................
26
Item 6.
[Reserved] ....................................................................................................................................................
27
Item 7.
Management Discussion and Analysis of Financial Condition and Results of Operations ..........................
27
Item 7A. Quantitative and Qualitative Disclosures About Market Risk ......................................................................
44
Item 8.
Financial Statements and Supplementary Data ............................................................................................
45
Item 9.
Changes In and Disagreements with Accountants on Accounting and Financial Disclosures .....................
45
Item 9A. Controls and Procedures ...............................................................................................................................
46
Item 9B. Other Information .........................................................................................................................................
46
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections ..........................................................
46
PART III ..........................................................................................................................................................................
47
Item 10. Directors, Executive Officers and Corporate Governance ...........................................................................
47
Item 11. Executive Compensation ..............................................................................................................................
47
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters .....
47
Item 13. Certain Relationships and Related Transactions, and Director Independence .............................................
48
Item 14. Principal Accounting Fees and Services ......................................................................................................
48
PART IV ..........................................................................................................................................................................
48
Item 15. Exhibits and Financial Statement Schedules ................................................................................................
48
Item 16
Form 10-K Summary ....................................................................................................................................
48

Exhibit Index ............................................................................................................................................................
49
Signatures .................................................................................................................................................................
53
Index to Consolidated Financial Statements ............................................................................................................
F-1

2
PART I

Forward Looking Statements

This Annual Report on Form 10-K contains “forward-looking statements” made within the meaning of the Private
Securities Litigation Reform Act of 1995. Words such as “anticipate,” “believe,” “intend,” “estimate,” “expect,” “continue,”
“should,” “could,” “may,” “plan,” “project,” “predict,” “will” and similar expressions are intended to identify
forward - looking statements. In addition, statements covering our future sales or financial performance and our plans,
performance and other objectives, expectations or intentions are forward-looking statements, such as statements regarding
our liquidity, debt, planned capital expenditures, and adequacy of capital resources and reserves. Factors that could cause our
actual results to differ materially from those expressed or implied in such forward-looking statements include, but are not
limited to:

●
Weather conditions, particularly lack of or reduced levels of snowfall and the timing of such snowfall, including
as a result of global climate change;

●
Our ability to manage general economic, business and geopolitical conditions, including the impacts of natural
disasters, labor strikes, global political instability, adverse developments affecting the banking and financial
services industries, pandemics and outbreaks of contagious diseases and other adverse public health
developments;

●
Increases in the price of steel or other materials, including as a result of tariffs or inflationary conditions,
necessary for the production of our products that cannot be passed on to our distributors;

●
Our inability to maintain good relationships with the original equipment manufacturers (“OEM”) with whom
we currently do significant business;

●
The inability of our suppliers and OEM partners to meet our volume or quality requirements;

●
Increases in the price of fuel or freight;

●
The effects of laws and regulations and their interpretations on our business and financial conditions, including
policy or regulatory changes related to climate change;

●
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, distributors or customers;

●
Inaccuracies in our estimates of future demand for our products;

●
Our inability to protect or continue to build our intellectual property portfolio;

●
Our inability to develop new products or improve upon existing products in response to end-user needs;

●
The effects of laws and regulations and their interpretations on our business and financial condition;

●
Losses due to lawsuits arising out of personal injuries associated with our products;

●
Factors that could impact the future declaration and payment of dividends or our ability to execute repurchases
under our stock repurchase program;

●
Our inability to effectively manage the use of artificial intelligence;

●
Our inability to compete effectively against our competition; and

●
Our inability to successfully implement our new enterprise resource planning system at Dejana.

We undertake no obligation to revise the forward-looking statements included in this Annual Report on Form 10-K
to reflect any future events or circumstances. Our actual results, performance or achievements could differ materially from
the results expressed in, or implied by, these forward-looking statements. Factors in addition to those listed above that could
cause or contribute to such differences are discussed in Item 1A, “Risk Factors” of the Annual Report on Form 10-K.

3
Item 1. Business

Overview

Home to the best-selling brands in the industry, Douglas Dynamics, Inc. (the “Company,” “we,” “us,” “our”) is
North America's premier manufacturer and upfitter of commercial work truck attachments and equipment. For more than
75 years, the Company has been innovating products that enable end-users to perform their jobs more efficiently and
effectively, providing opportunities for businesses to increase profitability. Our commitment to continuous improvement
enables us to consistently produce high quality products and drive shareholder value. The Douglas Dynamics portfolio of
products and services is separated into two segments: First, the Work Truck Attachments segment, which includes our
operations that manufacture and sell snow and ice control attachments and other products sold under the FISHER®,
SNOWEX® and WESTERN® brands, as well as our vertically integrated products. Second, the Work Truck Solutions
segment, which includes manufactured municipal snow and ice control products under the HENDERSON® brand and the
upfit of market leading attachments and storage solutions under the HENDERSON® brand, and the DEJANA® brand and its
related sub-brands. For additional financial information regarding our reportable business segments, see Note 16 of the Notes
to Consolidated Financial Statements of this report.

In our Work Truck Attachments segment, we offer a broad product line of snowplows and sand and salt spreaders
for light trucks that we believe to be the most complete line offered in the U.S. and Canadian markets. We also provide a full
range of related parts and accessories, which generates an ancillary revenue stream throughout the lifecycle of our snow and
ice control equipment. For the years ended December 31, 2024, 2023 and 2022, 82%, 84% and 85% of our net sales in our
Work Truck Attachments segment were generated from sales of snow and ice control equipment, respectively, and 18%,
16% and 15% of our net sales in our Work Truck Attachments segment were generated from sales of parts and accessories,
respectively. While we measure sales of parts and accessories separately from snow and ice control equipment, they are
integrated with one another and are not separable.

We sell our Work Truck Attachments products through a distributor network primarily to professional snowplowers
who are contracted to remove snow and ice from commercial and residential areas. We have engendered exceptional customer
loyalty for our products because of our ability to satisfy the stringent demands of our customers for a high degree of quality,
reliability and service. As a result, we believe our installed base is the largest in the light truck market with over 500,000
snowplows and sand and salt spreaders in service. Because sales of snowplows and sand and salt spreaders are primarily
driven by the need of our core end-user base to replace worn existing equipment, we believe our substantial installed base
provides us with a high degree of predictable sales over any extended period of time.

We believe that our Work Truck Attachments segment has the snow and ice control industry’s most extensive
distribution network worldwide, which consists of approximately 3,000 points of sale. Direct points of shipment are
predominantly through North American truck equipment and lawn care equipment distributors. Most of our distributors are
located throughout the snow belt regions in North America (primarily the Midwest, East and Northeast regions of the United
States as well as all provinces of Canada). We have longstanding relationships with many of our distributors. We continually
seek to grow and optimize our network by opportunistically adding high-quality, well-capitalized distributors in select
geographic areas and by cross-selling our industry leading brands within our distribution network.

4
Our Work Truck Solutions segment participates in the manufacture of municipal snow and ice control products and
offers a complementary line of upfitting services and products. Our Work Truck Solutions products consist of truck and
vehicle upfits where we attach component pieces of equipment, truck bodies, racking, and storage solutions with varying
levels of complexity to a vehicle chassis, and which are typically used by end-users for work related purposes. Our Work
Truck Solutions segment is a premier upfitter of Class 3 - 8 trucks and other commercial work vehicles. We also provide
customized turnkey solutions to governmental agencies such as Departments of Transportation (“DOTs”) and municipalities.
Additionally, we believe that our Work Truck Solutions segment is a leading specialized manufacturer of storage solutions
for trucks and vans and cable pulling equipment for trucks. We believe we are a regional market leader in the truck and
vehicle upfitting market. We believe that our Work Truck Solutions business possesses significant customer relationships
comprised of approximately 2,700 customers across the truck equipment industry. We have longstanding relationships with
many of our Work Truck Solutions customers. We continually seek to grow and strengthen our customer relationships by
providing custom solutions to our customers’ evolving specialty upfit needs. We are able to serve our Work Truck Solutions
customers’ needs through our bailment and floor plan agreements with original equipment vehicle manufacturers who supply
truck chassis, on which we perform custom upfits for our customers.

We believe we are a leader in operational efficiency in our industries, resulting from our application of lean
manufacturing principles, our vertical integration, and a highly variable cost structure. We continually seek to use lean
principles to reduce costs and increase the efficiency of our manufacturing operations. During the year ended December 31,
2024 we developed products in one facility that we own in Rockland, Maine. We also lease twenty-two manufacturing,
service and upfit facilities, located in Iowa, Illinois, Maine, Maryland, Michigan, Missouri, New Jersey, New York, Ohio,
Pennsylvania, Rhode Island and Wisconsin. Furthermore, our manufacturing efficiency allows us to deliver desired products
quickly to our customers, especially during times of sudden and unpredictable snowfall events when our customers need our
products immediately. During the year ended December 31, 2024, the Company closed on a sale leaseback transaction with
an unrelated third party. Under this transaction, the Company sold seven properties with a combined net book value of
$21,852 for gross proceeds of $64,150, which was reduced by transaction costs of $5,494 for net cash proceeds of
approximately $58,656. The properties in the sale leaseback transaction are comprised of three facilities located in
Milwaukee, Wisconsin and four additional facilities located in each of Huntley, Illinois; Manchester, Iowa; Rockland, Maine;
and Madison Heights, Michigan, totaling approximately 780,000 square feet of manufacturing and upfitting space. See Note
6 to our audited consolidated financial statements for additional information.

Our Industry

Work Truck Attachments Segment

Our Work Truck Attachments Segment participates primarily in the snow and ice control equipment industries in
North America. These industries consist predominantly of domestic participants that manufacture their products in North
America. The annual demand for snow and ice control equipment is driven primarily by the replacement cycle of the existing
installed base, which is predominantly a function of the average life of a snowplow or spreader and is driven by usage and
maintenance practices of the end-user. We believe actively-used snowplows are typically replaced, on average, every 9 to
12 years.

We believe that sales of both light and heavy duty snow and ice control equipment are driven primarily by the
replacement cycle of the existing installed base, which is predominantly a function of the average life of a snowplow or
spreader and is driven by usage and maintenance practices of the end-user. The primary factor influencing the replacement
cycle for snow and ice control equipment for light trucks is the level, timing and location of snowfall. Sales of snow and ice
control equipment in any given year and region are most heavily influenced by local snowfall levels in the prior snow season.
Heavy snowfall during a given winter causes equipment usage to increase, resulting in greater wear and tear and shortened
life cycles, thereby creating a need for replacement equipment and additional parts and accessories.

While snowfall levels vary within a given year and from year-to-year, snowfall, and the corresponding replacement
cycle of snow and ice control equipment, is relatively consistent over multi-year periods. The following chart depicts
aggregate annual and ten-year (based on the typical life of our snowplows) rolling average of the aggregate snowfall levels
in 66 cities in 26 snow belt states across the Northeast, East, Midwest and Western United States where we monitor snowfall
levels from 1983 to 2024. As the chart indicates, since 1984, aggregate snowfall levels in any given rolling ten-year period
have been fairly consistent, ranging from 2,738 to 3,345 inches.

Note:
The 10-year rolling average snowfall is not presented prior to 1984 for purposes of the calculation due to lack
of snowfall data prior to 1975. Snowfall data in this chart is not adjusted for snowfall outside of the 66 cities in
the 26 states reflected.

Source:
National Oceanic and Atmospheric Administration’s National Weather Service.

The demand for snow and ice control equipment can also be influenced by general economic conditions in the United
States, as well as local economic conditions in the snow-belt regions in North America. In stronger economic conditions, our
end-users may choose to replace or upgrade existing equipment before its useful life has ended, while in weak economic
conditions, our end-users may seek to extend the useful life of equipment, thereby increasing the sales of parts and accessories.
However, since snow and ice control management is a non-discretionary service necessary to ensure public safety and
continued personal and commercial mobility in populated areas that receive snowfall, end-users cannot extend the useful life
of snow and ice control equipment indefinitely and must replace equipment that has become too worn, unsafe or unreliable,
regardless of economic conditions. While our parts and accessories yield slightly higher gross margins than our snow and ice
control equipment, they yield significantly lower revenue than equipment sales, which adversely affects our results of
operations. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Seasonality and
Year-to-Year Variability.”

Long-term growth in the overall snow and ice control equipment market also results from geographic expansion of
developed areas in the snow belt regions of North America (primarily the Midwest, East and Northeast regions of the United
States as well as all provinces of Canada), as well as consumer demand for technological enhancements in snow and ice
control equipment and related parts and accessories that improves efficiency and reliability. Continued construction in the
snow belt regions in North America increases the aggregate area requiring snow and ice removal, thereby growing the market
for snow and ice control equipment. Additionally, there is continued potential for growth within Work Truck Attachments
related to the sale of non-truck snow and ice control equipment, including utility terrain vehicle (“UTV”) plows and other
such equipment. Additionally, in order to ensure reliable commerce and safe roads, distribution of our ice control equipment
continues to expand into states south of the snow belt. The development and sale of more reliable, more efficient and more
sophisticated products have historically contributed to an approximate 2% to 4% average unit price increase, with higher
price increases in inflationary environments. There were multiple price increases ranging from the low-single digits to low-
double digits that were implemented at various points in 2021 through 2023. In 2024, average unit price increases were more
in line with historical averages.

6
Work Truck Solutions Segment

Our Work Truck Solutions Segment primarily participates in the manufacture of municipal snow and ice control
products, as well as in the truck and vehicle upfitting industry in the United States. This industry consists predominantly of
domestic participants that upfit work trucks and vehicles. Specifically, there are regional market leaders that operate in close
proximity to the original equipment vehicle manufacturers’ facilities and vehicle ports of entry. In addition to the regional
market leaders, there exist smaller upfit businesses. Our Work Truck Solutions segment competes against both the other
regional market leaders and the smaller market participants. The annual demand for upfit vehicles is subject to the general
macro-economic environment trends and municipal budgets.

We believe our Work Truck Solutions segment is a regional market leader in the Northeast and Mid-Atlantic regions
of the United States. We serve a variety of different customers that include dealers who typically sell to light and heavy duty
truck end-users and to large national customers who purchase fleets of upfitted vehicles. Heavy duty truck end-users typically
are comprised of local governments and municipalities which plan for and execute planned replacement of equipment over
time. Approximately half of our revenues are derived from dealer customers, while approximately 40% of our revenues are
fleet sales and sales to governmental entities. Our remaining sales are derived from over the counter sales of parts and
accessories.

Long term growth in the truck and vehicle upfit market will depend on technological advances in the component
products and advances in the original equipment manufacturer’s vehicles, as well customer demand for such products. Along
with technological advancements, end-users are demanding more specialized vehicles specifically related to their unique
work related needs, which we expect will further increase demand. Along with technological advancements, products become
more complex in the marketplace, thus increasing the importance of the role of the truck upfitter in the value chain. In 2021
through 2023, more significant price increases were implemented across Work Truck Solutions in response to materials,
freight and labor inflation. There were multiple price increases ranging from the mid-single digits to low-double digits that
were implemented at various points in 2022 and 2023. In 2024, average unit price increases were more in line with historical
averages of 2% to 4% per year.

Our Competitive Strengths

We compete solely with other North American manufacturers and upfitters who do not benefit from our
manufacturing efficiencies, depth and breadth of products, extensive distributor network and customer relationships. As the
market leader in the industries we serve, we enjoy a set of competitive advantages versus smaller competitors, which allows
us to generate robust cash flows in all market environments and to support continued investment in our products, distribution
capabilities and brand regardless of annual volume fluctuations. We believe these advantages are rooted in the following
competitive strengths and reinforce our industry leadership over time.

Exceptional Customer Loyalty and Brand Equity. Our brands enjoy exceptional customer loyalty and brand equity
in the snow and ice control equipment and truck upfitting industries with both end-users and distributors, which have been
developed through over 75 years of superior innovation, productivity, reliability and support, consistently delivered year after
year. We believe past brand experience, rather than price, is the key factor impacting our products.

Broadest and Most Innovative Product Offering in Work Truck Attachments. In our Work Truck Attachments
segment, we provide the industry’s broadest product offering with a full range of snowplows, sand and salt spreaders and
related parts and accessories. We believe we maintain the industry’s largest and most advanced in-house new product
development program, historically introducing several new and redesigned products each year. Our broad product offering
and commitment to new product development is essential to maintaining and growing our leading market share position as
well as continuing to increase the profitability of our business. Meanwhile, at our Work Truck Solutions segment, each upfit
is customized to the specific needs of our customers.

7
Extensive North American Distributor Network in Work Truck Attachments. With approximately 3,000 points of
sale at our Work Truck Attachments segment, we benefit from having what we believe to be the most extensive distributor
network in the light truck and heavy duty snow and ice control equipment industry, providing a significant competitive
advantage over our peers. Our distributors function not only as sales and support agents (providing access to parts and
service), but also as industry partners providing real-time end-user information, such as retail inventory levels, changing
consumer preferences or desired functionality enhancements, which we use as the basis for our product development efforts.

Leader in Operational Efficiency. We believe we are a leader in operational efficiency in our industries, resulting
from our application of lean manufacturing principles and a highly variable cost structure. By utilizing lean principles, we
are able to adjust production levels easily to meet fluctuating demand, while controlling costs in slower periods. This
operational efficiency is supplemented by our highly variable cost structure, driven in part by our access to a sizable temporary
workforce (comprising approximately 10-15% of our Work Truck Attachments workforce during average snowfall years),
which we can quickly adjust, as needed. These manufacturing efficiencies enable us to respond rapidly to urgent customer
demand during times of sudden and unpredictable snowfalls, allowing us to provide exceptional service to our existing
customer base and capture new customers from competitors that we believe cannot service their customers’ needs with the
same speed and reliability.

Strong Cash Flow Generation. We are able to generate significant cash flow as a result of relatively consistent high
profitability, low capital spending requirements and predictable timing of our working capital requirements. Our significant
cash flow has allowed us to reinvest in our business, pay down long term debt, pay substantial dividends to our stockholders,
and make strategic acquisitions.

Experienced Management Team. We believe our business benefits from an exceptional management team that is
responsible for establishing our leadership in the light truck and heavy duty snow and ice control equipment and truck
upfitting industries. Our senior management team consisted of four officers as of December 31, 2024. Effective July 8, 2024,
Robert McCormick retired as the Company's President and Chief Executive Officer. Effective July 8, 2024, James Janik was
elected as the Company's Interim President and Chief Executive Officer. He has been an officer and/or director of our
Company for over 27 years and has served in various roles, including Executive Chairman and Chief Executive Officer,
among others. Through management’s strategic vision, we have been able to expand our distributor network and grow what
we believe is our market leading position.

Our Business Strategy

Our business strategy is to capitalize on our competitive strengths to maximize cash flow to reinvest in our business,
pay dividends, reduce indebtedness, execute repurchases under our stock repurchase program and to create stockholder value.
We have also developed a management system called the Douglas Dynamics Management System (“DDMS”) that is intended
to assist in value creation and enhanced customer service and includes a collection of tools to solve problems and deliver
greater value to our customers by eliminating waste and improving the way we work. DDMS is an integrated system that
continues to evolve with our business to deliver on strategic priorities and goals through a culture of continuous improvement,
people who embrace change, world-class processes, and practical tools. The building blocks of our strategy are:

Continuous Product Innovation. We believe new product innovation is critical to maintaining and growing our
market leading position in the snow and ice control equipment industry. We will continue to focus on developing innovative
solutions to increase productivity, ease of use, reliability, durability and serviceability of our products and on incorporating
lean manufacturing concepts into our product development process, which has allowed us to reduce the overall cost of
development and, more importantly, to reduce our time-to-market.

Distributor Network and Customer Optimization. At our Work Truck Attachment segment, we will continually
seek opportunities to expand our extensive distribution network by adding high-quality, well-capitalized distributors in select
geographic areas and by cross-selling our industry leading brands within our distribution network to ensure we maximize our
ability to generate revenue while protecting our industry leading reputation, customer loyalty and brands. We will also focus
on optimizing this network by providing in-depth training, valuable distributor support and attractive promotional and
incentive opportunities. As a result of these efforts, we believe a majority of our distributors choose to sell our products
exclusively. We believe this sizable high quality network is unique in the industry, providing us with valuable insight into
purchasing trends and customer preferences, and would be very difficult to replicate. At our Work Truck Solutions segment,
we have well developed customer relationships resulting from being responsive to the needs of our customers. We will seek
opportunities to continue to expand our customer group by increasing throughput, allowing us to grow our customer base and
continue to be responsive to our customers’ specialized upfit needs.

8
Aggressive Asset Management and Profit Focus. We will continue to aggressively manage our assets in order to
maximize our cash flow generation despite seasonal and annual variability in snowfall levels that affect our Work Truck
Attachments segment. We believe our ability is unique in our industry and enables us to achieve attractive margins in all
snowfall environments. Key elements of our asset management and profit focus strategies include:

●
employment of a highly variable cost structure, which can allow us to quickly adjust costs in response to
real-time changes in demand;

●
use of enterprise-wide lean principles, which allow us to easily adjust production levels up or down to meet
demand;

●
implementation of a pre-season order program, which incentivizes distributors to place orders prior to the retail
selling season and thereby enables us to more efficiently utilize our assets; and

●
development of a vertically integrated business model, which we believe provides us cost advantages over our
competition.

Additionally, although modest, our capital expenditure requirements and operating expenses can be temporarily
reduced in response to anticipated or actual lower sales in a particular year to maximize cash flow.

Flexible, Lean Enterprise Platform. We will continue to utilize lean principles to maximize the flexibility,
efficiency and productivity of our manufacturing operations while reducing the associated costs, enabling us to increase
distributor and end-user satisfaction. For example, in an environment where shorter lead times and near-perfect order
fulfillment are important to our distributors, we believe our lean processes have helped us to improve our shipping
performance and build a reputation for providing industry leading shipping performance.

Our Growth Opportunities

Opportunistically Seek New Products and New Markets. We plan to continue to evaluate other acquisition
opportunities within our industry that can help us expand our distribution reach, enhance our technology and as a consequence
improve the breadth and depth of our product lines. We also consider diversification and vertical integration opportunities in
adjacent markets that complement our business model and could offer us the ability to leverage our core competencies to
create stockholder value.

Increase Our Industry Leading Market Share. In our Work Truck Attachments segment, we plan to leverage our
industry leading position, distribution network and new product innovation capabilities to capture market share in the North
American snow and ice control equipment market, focusing our primary efforts on increasing penetration in those North
American markets where we believe our overall market share is less than 50%, including the heavy duty truck market. At our
Work Truck Solutions segment, we plan to leverage our regional market leading position and utilize DDMS to further
penetrate upfit markets and to grow our customer base.

Order Backlog

We had total backlog of $348.0 million and $296.3 million at December 31, 2024 and 2023, respectively. Backlog
information may not be indicative of results of operations for future periods.

9
Human Capital Management

Our Purpose

Douglas Dynamics is home to the most trusted brands in the industry and is North America’s premier manufacturer
and upfitter of work truck attachments and equipment. Our commitment to continuous improvement enables us to consistently
produce the highest quality products and drive shareholder value. We serve as trusted partners to our dealers, suppliers and
end users, whose businesses benefit from our operational and management expertise.

Our Culture

For more than 75 years, Douglas Dynamics has been manufacturing what we believe to be the best products available
on the market. Every day, our employees work hard to meet our customers’ needs, and every day we, as an organization, are
focused on fostering a collaborative environment for our employees and offering them the opportunity to have ownership in
our company's success. As of December 31, 2024, we employed 1,673 employees, all US based except for 10 employees who
work in the Douglas Dynamics Sourcing Office located in Beijing, China. None of our employees are represented by a union
and we are not party to any collective bargaining agreements. We believe that our focus on integrity, teamwork and high-
performance have enabled us to create an ideal work environment for every one of our employees. Our Board of Directors
and our Compensation Committee regularly receive updates from our senior management with respect to our health and
safety, diversity and inclusion and our internal talent development initiatives and priorities.

Our commitment to continuous improvement extends well beyond producing the highest quality products or driving
shareholder value—we also value the growth, improvement and engagement of our employees.

Creating a culture of excellence is the key to our success, which is why we work hard to give our employees the
tools and training to achieve more. We know that when our employees are taken care of, our business partners get the most
out of their Douglas Dynamics experience, helping us to remain North America‘s premier manufacturer and upfitter of work
trucks and equipment.

Our Core Values and Winning Behaviors

Our Core Values, Grow, Improve, and Engage, are critical to our individual and organizational success and focus
us as an organization to ensure we succeed by executing upon the right things.

Also critical to our success are our Winning Behaviors, a framework of priorities that we expect of each Douglas
Dynamics employee to support the success of our company, namely, winning as an organization the right way. Our focus on
our Winning Behaviors helps ensure a consistent focus on our Core Values across all employees and in all locations.

●
Be Customer and Results Driven: Consider the customer in everything you do. Focus on meaningful results that
benefit both our customers and organization.

●
Anticipate the Possibilities: See around corners. Envision and embrace new or unique ideas and seek to understand
their impact on the future of our business.

●
Collaborate and Care: Appreciate the value in working together. Work as a team to care for our customers, our
business, our communities and most importantly, each other.

●
Communicate Responsibly: Communicate to build culture and trust. Place an emphasis on listening and speaking
in ways that help everyone succeed.

●
Develop Self and Others: Take active ownership of your development and support others. Continually improve
your knowledge, skills and abilities.

●
Get Better Every Day: Make even the smallest improvement every day. Continuous improvement is at the center
of everything we do. Not just what we do, but how we do it, every single day.

10
Talent Development

Talent development is a critical component of individual and organizational success. We promote our internal
Douglas Dynamics University (DDU) to support all employees' development. DDU is one of the services provided by the
Organizational Development Team that supports our company's dedication to the performance, development, and growth of
our talented people. To truly develop people, we believe in taking a balanced approach to activity selection within the
offerings provided by DDU:

Instruction
Interaction
Application
In-Person & Virtual Classes
Coaching
Job Rotations
Self-Paced eLearning
Mentoring
Temporary Assignments
Conferences
Job Shadowing
Projects
Podcasts & Webcasts
Discussions
Challenging Projects
Books & Articles
Interest Groups
Role Playing
Websites
Book Clubs
Doing
Videos
Online Communities

We achieve the goals of DDU by:

●
Developing and delivering live and virtual instructor-led training, and eLearning

●
Managing the Douglas Dynamics Learning Center (DDLC) – an eLearning platform

●
Supporting projects that require training creation throughout DD

●
Developing and delivering team building activities upon request

●
Providing training solutions that can be delivered by other teams or certified trainers

Our Ethics

Along with our core values and winning behaviors, we act in accordance with our Code of Conduct Policy ("Code
of Conduct"), which creates expectations and provides guidance for all our employees to make the right decisions. Our Code
of Conduct covers such topics as anti-corruption, discrimination, harassment, privacy, appropriate use of company assets,
protecting confidential information and reporting Code of Conduct violations.

Diversity & Inclusion

Douglas Dynamics remains committed to diversity and inclusion, recognizing opportunities for growth across our
organization. We are exploring strategies to attract diverse talent through recruiting firms, job-posting sites, and university
programs designed to connect companies with qualified candidates from varied backgrounds. We will continue to assess and
improve our approaches to workforce diversity.

Health & Safety

We are committed to the health and safety of our employees. The environment we provide is based on our vision to
create a working environment that places the highest value on the welfare of our employees, to instill a sense of ownership,
and to embrace excellence in safety, production and quality of work being done.

●
Our goals are simple: to create added value for our customers through best in class performance in environmental,
health and safety practices. We pledge to place the safety and well-being of our employees first and to embody
honesty and integrity in the pursuit of our vision of creating a world class safety culture.

●
We are committed to providing world-class products and services that minimize harm to the environment and public
health. We are committed not only in regard to our products to our customers but also in the way we conduct internal
operations. We look to preserve the environment and will conduct business where feasible in an
environmentally sustainable way.

11
Financing Program

We are party to a financing program in which certain distributors may elect to finance their purchases from us
through a third party financing company. We provide the third party financing company recourse against us regarding the
collectability of the receivable under the program due to the fact that if the third party financing company is unable to collect
from the distributor the amounts due in respect of the product financed, we would be obligated to repurchase any remaining
inventory related to the product financed and reimburse any legal fees incurred by the financing company. During the years
ended December 31, 2024, 2023 and 2022, distributors financed purchases of $6.3 million, $9.0 million and $15.8 million
through this financing program, respectively. At both December 31, 2024 and December 31, 2023, there were no uncollectible
outstanding receivables related to sales financed under the financing program. The amount owed by our distributors to the
third party financing company under this program at December 31, 2024 and 2023 was $8.9 million and $13.7 million,
respectively. We were not required to repurchase repossessed inventory for the years ended December 31, 2024, 2023 and
2022.

In the past, minimal losses have been incurred under this agreement. However, an adverse change in distributor retail
sales could cause this situation to change and thereby require us to repurchase repossessed units. Any repossessed units are
inspected to ensure they are current, unused product and are restocked and resold.

Intellectual Property

We maintain patents relating to snowplow mounts, assemblies, hydraulics, electronics and lighting systems, brooms,
sand, salt and fertilizer spreader assemblies, reel handlers and carriers and shelving systems. Patents are valid for the longer
period of 17 years from issue date or 20 years from filing date. The duration of the patents we currently possess range between
less than one year and 17 years of remaining life. Our patent applications date from 2005 through 2022.

Raw Materials

We have recently experienced increased commodity costs due to market conditions causing the inflation of steel and
other commodity prices. Historically, we have mitigated, and we currently expect to continue to mitigate, commodity cost
increases in part by engaging in proactive vendor negotiations, reviewing alternative sourcing options, substituting materials,
engaging in internal cost reduction efforts, and increasing prices on some of our products, all as appropriate. See the section
titled “–Overview” in Management’s Discussion and Analysis of Financial Condition and Results of Operations below for
further discussion.

Most of the components of our products are also affected by commodity cost pressures and are commercially
available from a number of sources. In 2024 and 2023, we experienced no significant work stoppages because of shortages
of raw materials or commodities. The highest raw material and component costs are generally for steel, which we purchase
from several suppliers.

12
Government Regulation

Our operations are subject to certain federal, state and local laws and regulations relating to, among other things,
climate change, the generation, storage, handling, emission, transportation, disposal and discharge of hazardous and
non-hazardous substances and materials into the environment, the manufacturing of motor vehicle accessories, and employee
health and safety. Management believes that the Company’s business is operated in material compliance with all such
regulations.

Other Information

We were formed as a Delaware corporation in 2004. We maintain a website with the address
www.douglasdynamics.com. We are not including the information contained on our website as part of, or incorporating it by
reference into, this report. We make available free of charge (other than an investor’s own Internet access charges) through
our website our Annual Report on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, and
amendments to these reports, as soon as reasonably practicable after we electronically file such material with, or furnish such
material to, the Securities and Exchange Commission (“SEC”). For further information regarding our geographic areas see
the Summary of Significant Accounting Policies as discussed in Note 2 to our audited consolidated financial statements
included elsewhere in this Annual Report on Form 10-K.

Item 1A. Risk Factors

The Company operates in an environment that involves numerous known and unknown risks and uncertainties. Our
business, prospects, financial condition and operating results could be materially adversely affected by any of these risks, as
well as other risks not currently known to us or that we currently consider immaterial. The risks described below highlight
some of the factors that have affected, and in the future could affect our operations.

Risks Related to Weather and Seasonality

Our results of operations for our Work Truck Attachments segment and to a lesser extent our Work Truck Solutions
segment depend primarily on the level, timing and location of snowfall. As a result, a decline in snowfall levels in multiple
regions for an extended time, including as a result of climate change, could cause our results of operations to decline and
adversely affect our ability to generate cash flow.

As a manufacturer through our Work Truck Attachments segment of snow and ice control equipment for light trucks
and related parts and accessories, our sales depend primarily on the level, timing and location of snowfall in the regions in
which we offer our products. A low level or lack of snowfall in any given year in any of the snow-belt regions in North
America (primarily the Midwest, East and Northeast regions of the United States as well as all provinces of Canada) will
likely cause sales of our Work Truck Attachments products and a portion of our Work Truck Solutions products to decline
in such year as well as the subsequent year, which in turn may adversely affect our results of operations and ability to generate
cash flow. For example, our 2024 results were impacted by low snowfall in our core markets in the snow season ended March
31, 2024 leading to lower volumes, and our 2023 results were impacted by a significantly low amount of snowfall in the snow
season ended March 31, 2023, where major cities along the I-95 corridor on the East Coast did not see any measurable
snowfall. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Seasonality and
Year-to-Year Variability.” A sustained period of reduced snowfall events in one or more of the geographic regions in which
we offer our products could cause our results of operations to decline and adversely affect our ability to generate cash flow.
If unfavorable weather conditions are exacerbated by climate change or otherwise, our results of operations may be affected
to a greater degree than we have previously experienced.

13
The year-to-year variability of our Work Truck Attachments segment can cause our results of operations and financial
condition to be materially different from year-to-year and the seasonality of our Work Truck Attachments segment can
cause our results of operations and financial condition to be materially different from quarter-to-quarter.

Because our Work Truck Attachments segment depends on the level, timing and location of snowfall, our results of
operations vary from year-to-year. Additionally, because the annual snow season typically only runs from October 1 through
March 31, our distributors typically purchase our Work Truck Attachments products during the second and third quarters. As
a result, we operate in a seasonal business. We not only experience seasonality in our sales, but also experience seasonality
in our working capital needs. Consequently, our results of operations and financial condition of our Work Truck Attachments
segment can vary from year-to-year, as well as from quarter-to-quarter, which could affect our ability to generate cash flow.
If we are unable to effectively manage the seasonality and year-to-year variability of our Work Truck Attachments segment,
our results of operations, financial condition and ability to generate cash flow may be adversely affected.

Risks Related to Economic Conditions

If economic conditions in the United States deteriorate, or if spending by governmental agencies is limited or reduced, our
results of operations, financial condition and ability to generate cash flow may be adversely affected.

Historically, demand for snow and ice control equipment for light and heavy duty trucks as well as upfitted vehicles
has been influenced by general economic conditions in the United States, as well as local economic conditions in the snow-
belt regions in North America.

Weakened economic conditions and limited or reduced government spending may cause both our Work Truck
Attachments and Work Truck Solutions end-users to delay purchases of replacement snow and ice control equipment and
upfit vehicles and instead repair their existing equipment and vehicles, leading to a decrease in our sales of new equipment
and upfitted vehicles. Weakened economic conditions and limited or reduced governmental spending may also cause our
end-users to delay their purchases of new light and heavy duty trucks. Because our end-users tend to purchase new snow and
ice control equipment concurrent with their purchase of new light or heavy duty trucks, their delay in purchasing new light
or heavy duty trucks can also result in the deferral of their purchases of new snow and ice control equipment. The deferral of
new equipment purchases during periods of weak economic conditions or limited or reduced government spending may
negatively affect our results of operations, financial condition and ability to generate cash flow.

Weakened economic conditions or limited or reduced government spending may also cause both our Work Truck
Attachments and Work Truck Solutions end-users to consider price more carefully in selecting new snow and ice control
equipment and upfit vehicles, respectively. Historically, considerations of quality and service have outweighed considerations
of price, but in a weak economy, or an environment of constrained government spending, price may become a more important
factor. Any refocus away from quality in favor of cheaper equipment could cause end-users to shift away from our products
to less expensive competitor products, or to shift away from our more profitable products to our less profitable products,
which in turn would adversely affect our results of operations and our ability to generate cash flow.

Weakened economic conditions may lead to significant inflation in raw materials and components, labor, benefits,
freight, and other areas, which would adversely affect our results of operations and our ability to generate cash flow. It may
be more difficult to collect from customers as a result of customer bankruptcy or other hardships. Supply chains may be
disrupted which could raise prices and impact our ability to obtain inventory timely.

14
The price of steel, a commodity necessary to manufacture our products, is highly variable. If the price of steel increases,
our gross margins could decline.

Steel is a significant raw material used to manufacture our products. During 2024, our raw steel purchases were in
amounts equivalent to approximately 7% of our revenue. During 2023, our raw steel purchases were in amounts equivalent
to approximately 10% of our revenue. During 2022, our raw steel purchases were in amounts equivalent to
approximately 13% of our revenue. Steel purchases as a percentage of revenue were lower in the year ended December 31,
2024 due to lower steel prices, lower production at Work Truck Attachments related to lower volume, as well as higher sales
dollars at Work Truck Solutions. The steel industry is highly cyclical in nature, and steel prices have been volatile in recent
years and may remain volatile in the future. Steel prices are influenced by numerous factors beyond our control, including
general economic conditions domestically and internationally, the availability of raw materials, competition, labor costs,
freight and transportation costs, production costs, tariffs and other trade restrictions. Steel prices are volatile and may also
increase as a result of increased demand from the automobile and consumer durable sectors. If the price of steel increases,
our variable costs may increase. We may not be able to mitigate these increased costs through the implementation of
permanent price increases or temporary invoice surcharges, especially if economic conditions are weak and our distributors
and end-users become more price sensitive. If we are unable to successfully mitigate such cost increases in the future, our
gross margins could decline. On December 17, 2024, we entered into a steel hedging agreement to reduce our exposure to
commodity price swings. The steel hedging instrument has a notional quantity of 3,000 short tons, and is effective for the
period August 1, 2025 through December 31, 2025, which we expect to be slightly less than half of our exposure during the
effective period. Under the steel hedge agreement, we will make fixed payments of $819 per short ton for the Steel Hot
Rolled Coil (HRC) commodity. The steel hedging instrument is accounted for as a cash flow hedge.

If petroleum prices increase, then our results of operations could be adversely affected.

Petroleum prices have fluctuated significantly in recent years. Prices and availability of petroleum products are
subject to political, economic and market factors that are outside of our control. Political events in petroleum-producing
regions, as well as hurricanes and other weather-related events may cause the price of fuel to increase. If the price of fuel
increases, the demand for our products may decline and transportation and freight costs may increase, which would adversely
affect our financial condition and results of operations.

Global climate change and related emphasis on ESG matters by various stakeholders could negatively affect our business.

Increased public awareness and concern regarding global climate change may result in more regional and/or federal
requirements to reduce or mitigate the effects of greenhouse gas emissions. There continues to be a lack of consistent climate
legislation, which creates economic and regulatory uncertainty. Such regulatory uncertainty extends to our product portfolio
and overall costs of compliance, which may impact the demand for our products and/or require us to make increased capital
expenditures to meet new standards and regulations. Further, our customers and the markets we serve may impose emissions
or other environmental standards upon us through regulation, market-based emissions policies or consumer preference that
we may not be able to timely meet, or which may not be economically feasible for us, due to the required level of capital
investment or technological advancement.

There is a growing consensus that greenhouse gas emissions are linked to global climate changes. Climate changes,
such as extreme weather conditions, create financial risk to our business. For example, the demand for our products and
services may be affected by unseasonable weather conditions, which was the case for our Work Truck Attachments segment
during the snow seasons ended March 31, 2024 and 2023, where snowfall levels came in significantly below average. Climate
changes could also disrupt our operations by impacting the availability and cost of materials needed for manufacturing and
could increase insurance and other operating costs. We could also face indirect financial risks passed through the supply
chain, and process disruptions due to climate changes could result in price modifications for our products and the resources
needed to produce them.

Furthermore, customer, investor, and employee expectations in areas such as the environment, social matters and
corporate governance (ESG) have been rapidly evolving. Specifically, certain customers are requiring information on our
environmental sustainability plans and commitments, which we have not yet released publicly as of the date of this
filing. There can be no assurance of the extent to which any of our future plans or commitments will be achieved, or that any
investments we make in furtherance of achieving any such plans, targets, goals or other commitments will meet customer,
investor, employee or other stakeholder expectations and desires or any legal standards regarding sustainability performance.

Additionally, stakeholder focus on ESG issues requires the continuous monitoring of various and evolving standards
and the associated reporting requirements. A failure to adequately meet stakeholder expectations may result in the loss of
business, diluted market valuation, an inability to attract and retain customers or an inability to attract and retain top talent.

15
Risks Related to our Business and Operations

We depend on outside suppliers and original equipment manufacturers who may be unable to meet our volume and quality
requirements, and we may be unable to obtain alternative sources.

We purchase certain components essential to our snowplows and sand and salt spreaders from outside suppliers,
including off-shore sources. We also have OEM partners that supply truck chassis used in our truck upfitting operations.
Most of our key supply arrangements can be discontinued at any time. A supplier may encounter delays in the production
and delivery of such products and components or may supply us with products and components that do not meet our quality,
quantity or cost requirements. In addition, as was the case in 2024, 2023, and 2022, an OEM may encounter difficulties and
may be unable to deliver truck chassis according to our production needs, including as a result of computer chip shortages,
labor strikes or otherwise, which may result in the deferral of sales to future periods. Additionally, a supplier may be forced
to discontinue operations. Any discontinuation or interruption in the availability of quality products, components or truck
chassis from one or more of our suppliers may result in increased production costs, delays in the delivery of our products and
lost end-user sales, which could have an adverse effect on our business and financial condition.

We have continued to increase the number of our off-shore suppliers. Our increased reliance on off-shore sourcing
may cause our business to be more susceptible to the impact of natural disasters, global health epidemics, war and other
geopolitical conflict, and other factors that may disrupt the transportation systems or shipping lines used by our suppliers, a
weakening of the dollar over an extended period of time and other uncontrollable factors such as changes in foreign regulation,
tariffs or economic conditions. In addition, reliance on off-shore suppliers may make it more difficult for us to respond to
sudden changes in demand because of the longer lead time to obtain components from off-shore sources. We may be unable
to mitigate this risk by stocking sufficient materials to satisfy any sudden or prolonged surges in demand for our products. If
we cannot satisfy demand for our products in a timely manner, our sales could suffer as distributors can cancel purchase
orders without penalty until shipment.

Security breaches and other disruptions could compromise our information and expose us to liability, which would cause
our business and reputation to suffer.

In the ordinary course of our business, we collect and store sensitive data, including our proprietary business
information and that of our customers, suppliers and business partners, as well as personally identifiable information of our
customers and employees, in our data centers and on our networks. The secure processing, maintenance and transmission of
this information is critical to our operations and business strategy. Despite our security measures, our information technology
and infrastructure may be vulnerable to malicious attacks or breached due to employee error, malfeasance or other disruptions,
including as a result of rollouts of new systems. In addition, we have portions of our workforce working remotely and a small
number of employees working at an office in China, which may heighten these risks. Any such breach could compromise our
networks and the information stored there could be accessed, publicly disclosed, lost or stolen. Any such access, disclosure
or other loss of information could result in legal claims or proceedings and/or regulatory penalties, disrupt our operations,
damage our reputation, and/or cause a loss of confidence in our products and services, which could adversely affect our
business.

We are heavily dependent on our senior management team. If we are unable to retain, attract, and motivate qualified
employees, it may adversely affect our business.

Our continued success depends on the retention, recruitment and continued contributions of key management,
finance, sales and marketing personnel, some of whom could be difficult to replace. Our success is largely dependent upon
our senior management team. The loss of any one or more of such persons could have an adverse effect on our business and
financial condition. Our ability to implement our business plan is dependent on our retaining, hiring, and training a large
number of qualified employees every year. Our results of operations could be adversely affected by increased costs due to
higher competition for employees, higher employee turnover, or increased employee benefit costs, which could be heightened
as a result of adjustments to workforce levels in response to varying levels of demand. Effective July 8, 2024, Robert
McCormick retired as our President and Chief Executive Officer. Effective July 8, 2024, James Janik was elected as our
Interim President and Chief Executive Officer.

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Our failure to maintain good relationships with our customers and distributors, the loss or consolidation of our distributor
base or the actions or inactions of our distributors could have an adverse effect on our results of operations and our ability
to generate cash flow.

We depend on a network of truck equipment distributors to sell, install and service our products and upfitted vehicles.
Nearly all of these sales and service relationships are at will, so almost all of our distributors could discontinue the sale and
service of our products and upfitted vehicles at any time, and those distributors that primarily sell our products and upfitted
vehicles may choose to sell competing products or vehicles at any time. Further, difficult economic or other circumstances
could cause any of our distributors to discontinue their businesses. Moreover, if our distributor base were to consolidate or if
any of our distributors were to discontinue their business, competition for the business of fewer distributors would intensify.
If we do not maintain good relationships with our distributors and customers, or if we do not provide product or upfit offerings
and pricing that meet the needs of our distributors and customers, we could lose a substantial amount of our distributor and
customer base. A loss of a substantial portion of our distributor and customer base could cause our sales to decline
significantly, which would have an adverse effect on our results of operations and ability to generate cash flow.

In addition, our distributors may not provide timely or adequate service to our end-users. If this occurs, our brand
identity and reputation may be damaged, which would have an adverse effect on our results of operations and ability to
generate cash flow.

Lack of available financing options for our end-users or distributors may adversely affect our sales volumes.

Our end-user base in our Work Truck Attachments segment is highly concentrated among professional snowplowers,
who comprise over 50% of our end-users, many of whom are individual landscapers who remove snow during the winter and
landscape during the rest of the year, rather than large, well-capitalized corporations. These end-users often depend upon
credit to purchase our Work Truck Attachments products. If credit is unavailable on favorable terms or at all, then these
end-users may not be able to purchase our Work Truck Attachments products from our distributors, which would in turn
reduce sales and adversely affect our results of operations and ability to generate cash flow.

In addition, because our distributors, like our end-users, rely on credit to purchase our products, if our distributors
are not able to obtain credit, or access credit on favorable terms, we may experience delays in payment or nonpayment for
delivered products. Further, if our distributors are unable to obtain credit or access credit on favorable terms, they could
experience financial difficulties or bankruptcy and cease purchases of our products altogether. Thus, if financing is
unavailable on favorable terms or at all, our results of operations and ability to generate cash flow would be adversely affected.

We do not sell our products under long-term purchase contracts, and sales of our products are significantly impacted by
factors outside of our control; therefore, our ability to estimate demand is limited.

We do not enter into long-term purchase contracts with our distributors and the purchase orders we receive may be
cancelled without penalty until shipment. Therefore, our ability to accurately predict future demand for our products is
limited. Nonetheless, we attempt to estimate demand for our products for purposes of planning our annual production levels
and our long-term product development and new product introductions. We base our estimates of demand on our own market
assessment, snowfall figures, quarterly field inventory surveys and regular communications with our distributors. Because
wide fluctuations in the level, timing and location of snowfall, economic conditions and other factors may occur, each of
which is out of our control, our estimates of demand may not be accurate. Underestimating demand could result in procuring
an insufficient amount of materials necessary for the production of our products, which may result in increased production
costs, delays in product delivery, missed sale opportunities and a decrease in customer satisfaction. Overestimating demand
could result in the procurement of excessive supplies, which could result in increased inventory and associated carrying costs.

We face competition from other companies in our industry, and if we are unable to compete effectively with these
companies, it could have an adverse effect on our sales and profitability. Price competition among our distributors and
customers could negatively affect our market share.

In our Work Truck Attachments segment, we primarily compete with regional manufacturers of snow and ice control
equipment for light trucks. While we are the most geographically diverse company in our industry, we may face increasing
competition in the markets in which we operate. Additionally, in our Work Truck Solutions segment, we compete with other
market leaders in the municipal snow and ice manufacturing and truck upfit industries. In saturated markets, price competition
may lead to a decrease in our market share or a compression of our margins, both of which would affect our profitability.
Moreover, current or future competitors may grow their market share and develop superior service and may have or may
develop greater financial resources, lower costs, superior technology or more favorable operating conditions than we
maintain. As a result, competitive pressures we face may cause price reductions for our products, which would affect our

17
profitability or result in decreased sales and operating income. Additionally, saturation of the markets in which we compete
or channel conflicts among our brands and shifts in consumer preferences may increase these competitive pressures or may
result in increased competition among our distributors and affect our sales and profitability. In addition, price competition
among the distributors that sell our products could lead to significant margin erosion among our distributors, which could in
turn result in compressed margins or loss of market share for us. Management believes that, after ourselves, the next largest
competitors in the market for snow and ice control equipment for light trucks are The Toro Company (the manufacturer of
the Boss brand of snow and ice control equipment) and Buyers Products Company, and that these companies represent our
primary competitors for light truck market share for our Work Truck Attachments segment. Management believes that, after
ourselves, the next largest competitors in the market for snow and ice control equipment for heavy trucks are Monroe and
Viking and that these companies represent our primary competitors for heavy truck market share for our Work Truck
Solutions segment. Management believes that other regional market leaders in the truck upfitting industry are Knapheide,
Reading, Palfleet and Autotruck, and that these companies represent our primary competitors for the upfit market share for
our Work Truck Solutions segment.

The statements regarding our industry, market positions and market share in this filing are based on our management’s
estimates and assumptions. While we believe such statements are reasonable, such statements have not been independently
verified.

Information contained in this Annual Report on Form 10-K concerning the snow and ice control equipment and
truck upfitting industries, our general expectations concerning these industries and our market positions and other market
share data regarding the industries are based on estimates our management prepared using end-user surveys, anecdotal data
from our distributors and distributors that carry our competitors’ products, our results of operations and management’s past
experience, and on assumptions made, based on our management’s knowledge of this industry, all of which we believe to be
reasonable. These estimates and assumptions are inherently subject to uncertainties, especially given the year-to-year
variability of snowfall and the difficulty of obtaining precise information about our competitors, and may prove to be
inaccurate. In addition, we have not independently verified the information from any third-party source and thus cannot
guarantee its accuracy or completeness, although management also believes such information to be reasonable. Our actual
operating results may vary significantly if our estimates and outlook concerning the industry, snowfall patterns, our market
positions or our market shares turn out to be incorrect.

We are subject to product liability claims, product quality issues, and other litigation from time to time that could adversely
affect our operating results or financial condition.

The manufacture, sale and usage of our products expose us to a risk of product liability claims. If our products are
defective or used incorrectly by our end-users, then injury may result, giving rise to product liability claims against us. If a
product liability claim or series of claims is brought against us for uninsured liabilities or in excess of our insurance coverage,
and it is ultimately determined that we are liable, our business and financial condition could suffer. Any losses that we may
suffer from any liability claims, and the effect that any product liability litigation may have upon the reputation and
marketability of our products, may divert management’s attention from other matters and may have a negative impact on our
business and operating results. Additionally, we could experience a material design or manufacturing failure in our products,
a quality system failure or other safety issues, or heightened regulatory scrutiny that could warrant a recall of some of our
products. A recall of some of our products could also result in increased product liability claims. Any of these issues could
also result in loss of market share, reduced sales, and higher warranty expense.

We may use artificial intelligence in our business and operations, and challenges with effectively managing its use could
harm our business and expose us to costly liability.

We may incorporate artificial intelligence technologies, including generative artificial intelligence and machine
learning, into our product development processes and operations. Our use of artificial intelligence technologies carries
inherent risks, and there can be no assurance that our use of artificial intelligence will enhance our products or achieve any
improvements in innovation or efficiency. In addition, we could be exposed to liability as a result of any misuse of artificial
intelligence and machine learning-technology by our personnel while carrying out Company responsibilities. We also face
risks of competitive disadvantage if our competitors more effectively use artificial intelligence to drive internal efficiencies
or create new or enhanced products. If we fail to effectively manage our use of artificial intelligence in our business and
operations, our business could be harmed or we could be exposed to costly liability, which in turn could adversely affect our
results of operations and financial condition.

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The process of implementing an ERP system at Dejana could adversely impact our ability to produce timely financial
statements or our internal control over financial reporting.

We are currently in the process of an enterprise resource planning ("ERP") implementation at our Dejana Truck &
Utility Equipment Company, LLC subsidiary, which will replace their current system. We may not be able to successfully
implement the ERP system without delays related to resource constraints or challenges with the design or testing phases of
the implementation. Inefficiencies in our financial reporting processes due to the conversion to a new ERP system could
adversely affect our ability to produce accurate financial statements on a timely basis until the new ERP system and processes
have matured. Additionally, the effectiveness of our internal control over financial reporting could be adversely affected if
the new ERP system is not successfully implemented.

Risks Related to Execution of Strategy

We may be unable to identify, complete or benefit from strategic transactions.

Our long-term growth strategy includes building value for our company through a variety of methods. These methods
may include acquisition of, investment in, or joint ventures involving, complementary businesses. We cannot assure that we
will be able to identify suitable parties for these transactions. If we are unable to identify suitable parties for strategic
transactions, we may not be able to capitalize on market opportunities with existing and new customers, which could inhibit
our ability to gain market share. Even if we identify suitable parties to participate in these transactions, we cannot assure that
we will be able to make them on commercially acceptable terms, if at all.

If in the future we acquire another company or its assets, it may be difficult to assimilate the acquired businesses,
products, services, technologies and personnel into our operations. These difficulties could disrupt our ongoing business,
distract our management and workforce, increase our expenses and adversely affect our operating results and ability to
compete and gain market share. Mergers and acquisitions are inherently risky and are subject to many factors outside our
control. No assurance can be given that any future acquisitions will be successful and will not materially adversely affect our
business, operating results, or financial condition. In addition, we may incur debt or be required to issue equity securities to
pay for future acquisitions or investments. The issuance of any equity securities could be dilutive to our stockholders. We
also may need to make further investments to support any acquired company and may have difficulty identifying and
acquiring appropriate resources. If we divest or otherwise exit certain portions of our business in connection with a strategic
transaction, we may be required to record additional expenses, and our estimates with respect to the useful life and ultimate
recoverability of our carrying basis of assets, including goodwill and purchased intangible assets, could change.

If we are unable to enforce, maintain or continue to build our intellectual property portfolio, or if others invalidate our
intellectual property rights, our competitive position may be harmed.

Our patents relate to snowplow mounts, assemblies, hydraulics, electronics and lighting systems, brooms, sand, salt
and fertilizer spreader assemblies, reel handlers and carriers and shelving systems. Patents are valid for the longer period of
17 years from issue date or 20 years from filing date. The duration of the patents we currently possess range between less
than one year and 17 years of remaining life. Our patent applications date from 2005 through 2022.

We rely on a combination of patents, trade secrets and trademarks to protect certain of the proprietary aspects of our
business and technology. We hold approximately 45 U.S. registered trademarks (including the trademarks WESTERN®,
FISHER®, DEJANA®, SNOWEX®, TURFEX®, SWEEPEX®, HENDERSON® and BRINEXTREME®) 13 Canadian
registered trademarks, 5 European trademarks, 7 Chinese trademarks, 56 U.S. issued patents, and 7 Canadian patents.
Although we work diligently to protect our intellectual property rights, monitoring the unauthorized use of our intellectual
property is difficult, and the steps we have taken may not prevent unauthorized use by others. In addition, in the event a third
party challenges the validity of our intellectual property rights, a court may determine that our intellectual property rights
may not be valid or enforceable. An adverse determination with respect to our intellectual property rights may harm our
business prospects and reputation. Third parties may design around our patents or may independently develop technology
similar to our trade secrets. The failure to adequately build, maintain and enforce our intellectual property portfolio could
impair the strength of our technology and our brands, and harm our competitive position. Although we have no reason to
believe that our intellectual property rights are vulnerable, previously undiscovered intellectual property could be used to
invalidate our rights.

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If we are unable to develop new products or improve upon our existing products on a timely basis, it could have an adverse
effect on our business and financial condition.

We believe that our future success depends, in part, on our ability to develop on a timely basis new technologically
advanced products or improve upon our existing products in innovative ways that meet or exceed our competitors’ product
and upfit offerings. Continuous product innovation, including through vertical integration efforts, ensures that our consumers
have access to the latest products and features when they consider buying snow and ice control equipment and truck upfits.
Maintaining our market position will require us to continue to invest in research and development and sales and marketing.
Product development requires significant financial, technological and other resources. We may be unsuccessful in making
the technological advances necessary to develop new products or improve our existing products to maintain our market
position. Industry standards, end-user expectations or other products may emerge that could render one or more of our
products less desirable or obsolete. If any of these events occur, it could cause decreases in sales, a failure to realize premium
pricing and an adverse effect on our business and financial condition.

Our dividend policy may limit our ability to pursue growth opportunities.

If we continue to pay dividends at the level contemplated by our dividend policy, as in effect on the date of this
filing, or if we increase the level of our dividend payments in the future, we may not retain a sufficient amount of cash to
finance growth opportunities, meet any large unanticipated liquidity requirements, execute repurchases under our stock
repurchase program or fund our operations in the event of a significant business downturn. In addition, because a significant
portion of cash available will be distributed to holders of our common stock under our dividend policy, our ability to pursue
any material expansion of our business, including through acquisitions, increased capital spending or other increases of our
expenditures, will depend more than it otherwise would on our ability to obtain third party financing. We cannot assure you
that such financing will be available to us at all, or at an acceptable cost. If we are unable to take timely advantage of growth
opportunities, our future financial condition and competitive position may be harmed, which in turn may adversely affect the
market price of our common stock.

Risks Related to Legal, Compliance and Regulatory Matters

We are subject to complex laws and regulations, including environmental and safety regulations that can adversely affect
the cost, manner or feasibility of doing business.

Our operations are subject to certain federal, state and local laws and regulations relating to, among other things,
climate change, the generation, storage, handling, emission, transportation, disposal and discharge of hazardous and
non-hazardous substances and materials into the environment, the manufacturing of motor vehicle accessories and employee
health and safety. We cannot be certain that existing and future laws and regulations and their interpretations will not harm
our business or financial condition. We currently make and may be required to make large and unanticipated capital
expenditures to comply with environmental and other regulations, such as:

●
Applicable motor vehicle safety standards established by the National Highway Traffic Safety Administration;

●
Emissions or other standards related to climate change as established by international, federal, state and local
regulatory bodies;

●
Reclamation and remediation and other environmental protection; and

●
Standards for workplace safety established by the Occupational Safety and Health Administration.

20
While we monitor our compliance with applicable laws and regulations and attempt to budget for anticipated costs
associated with compliance, we cannot predict the future cost of such compliance. In 2024, the amount expended for such
compliance was insignificant, but we could incur material expenses in the future in the event of future legislation changes or
unforeseen events, such as a workplace accident or environmental discharge, or if we otherwise discover we are in
non-compliance with an applicable regulation. In addition, under these laws and regulations, we could be liable for:

●
Product liability claims;

●
Personal injuries;

●
Investigation and remediation of environmental contamination and other governmental sanctions such as fines
and penalties; and

●
Other environmental damages.

Our operations could be significantly delayed or curtailed and our costs of operations could significantly increase as
a result of regulatory requirements, restrictions or claims. We are unable to predict the ultimate cost of compliance with these
requirements or their effect on our operations.

Provisions of Delaware law and our charter documents could delay or prevent an acquisition of us, even if the acquisition
would be beneficial to you.

Provisions in our certificate of incorporation and bylaws may have the effect of delaying or preventing a change of
control or changes in our management. These provisions include:

●
the absence of cumulative voting in the election of our directors, which means that the holders of a majority of
our common stock may elect all of the directors standing for election;

●
the ability of our Board of Directors to issue preferred stock with voting rights or with rights senior to those of
our common stock without any further vote or action by the holders of our common stock;

●
the division of our Board of Directors into three separate classes serving staggered three-year terms;

●
the ability of our stockholders to remove our directors is limited to cause and only by the vote of at least 662/3%
of the outstanding shares of our common stock;

●
the prohibition on our stockholders from acting by written consent and calling special meetings;

●
the requirement that our stockholders provide advance notice when nominating our directors or proposing
business to be considered by the stockholders at an annual meeting of stockholders; and

●
the requirement that our stockholders must obtain a 662/3% vote to amend or repeal certain provisions of our
certificate of incorporation.

We are also subject to Section 203 of the Delaware General Corporation Law, which, subject to certain exceptions,
prohibits us from engaging in any business combination with any interested stockholder, as defined in that section, for a
period of three years following the date on which that stockholder became an interested stockholder. This provision, together
with the provisions discussed above, could also make it more difficult for you and our other stockholders to elect directors
and take other corporate actions, and could limit the price that investors might be willing to pay in the future for shares of our
common stock.

21
Risks Related to Capital Structure

Our indebtedness could adversely affect our operations, including our ability to perform our obligations and generate
cash flow.

As of December 31, 2024, we had approximately $147.5 million of senior secured indebtedness, $0.0 million in
outstanding borrowings under our revolving credit facility and $149.5 million of borrowing availability under the revolving
credit facility. We may also be able to incur substantial indebtedness in the future, including senior indebtedness, which may
or may not be secured.

Our indebtedness could have important consequences, including the following:

●
We could have difficulty satisfying our debt obligations, and if we fail to comply with these requirements, an
event of default could result;

●
We may be required to dedicate a substantial portion of our cash flow from operations to required payments on
indebtedness, thereby reducing the cash flow available to pay dividends, execute repurchases under our stock
repurchase program or fund working capital, capital expenditures and other general corporate activities;

●
Covenants relating to our indebtedness may restrict our ability to make distributions to our stockholders or
execute repurchases under our stock repurchase program;

●
Covenants relating to our indebtedness may limit our ability to obtain additional financing for working capital,
capital expenditures and other general corporate activities, which may limit our flexibility in planning for, or
reacting to, changes in our business and the industry in which we operate;

●
We may be more vulnerable to general adverse economic and industry conditions;

●
We may be placed at a competitive disadvantage compared to our competitors with less debt; and

●
We may have difficulty repaying or refinancing our obligations under our senior credit facilities on their
respective maturity dates.

If any of these consequences occur, our financial condition, results of operations and ability to generate cash flow
could be adversely affected. This, in turn, could negatively affect the market price of our common stock, and we may need
to undertake alternative financing plans, such as refinancing or restructuring our debt, selling assets, reducing or delaying
capital investments or seeking to raise additional capital. We cannot assure you that any refinancing would be possible, that
any assets could be sold, or, if sold, of the timing of the sales and the amount of proceeds that may be realized from those
sales, or that additional financing could be obtained on acceptable terms, if at all.

Our variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase
significantly and could impose adverse consequences.

Certain of our borrowings, including our term loan and any revolving borrowings under our senior credit facilities,
are at variable rates of interest and expose us to interest rate risk. In addition, the interest rate on any revolving borrowings is
subject to an increase in the interest rate if the average daily availability under our revolving credit facility falls below a
certain threshold. If interest rates increase, our debt service obligations on the variable rate indebtedness would increase even
though the amount borrowed remained the same, and our net income and cash flows would correspondingly decrease.

22
Our senior credit facilities impose restrictions on us, which may also prevent us from capitalizing on business opportunities
and taking certain corporate actions. One of these facilities also includes minimum availability requirements, which if
unsatisfied, could result in liquidity events that may jeopardize our business.

Our senior credit facilities contain, and future debt instruments to which we may become subject may contain,
covenants that limit our ability to engage in activities that could otherwise benefit our company. Under the credit facilities,
these covenants include restrictions on our ability to:

●
incur, assume or permit to exist additional indebtedness or contingent obligations;

●
incur liens and engage in sale and leaseback transactions;

●
make loans and investments in excess of agreed upon amounts;

●
declare dividends, make payments or redeem or repurchase capital stock in excess of agreed upon amounts and
subject to certain other limitations;

●
engage in mergers, acquisitions and other business combinations;

●
prepay, redeem or purchase certain indebtedness or amend or alter the terms of our indebtedness;

●
sell assets;

●
make further negative pledges;

●
create restrictions on distributions by subsidiaries;

●
change our fiscal year;

●
engage in activities other than, among other things, incurring the debt under our new senior credit facilities and
the activities related thereto, holding our ownership interest in Douglas Dynamics, LLC, making restricted
payments, including dividends and repurchasing equity, permitted by our senior credit facilities and conducting
activities related to our status as a public company;

●
amend or waive rights under certain agreements;

●
transact with affiliates or our stockholders; and

●
alter the business that we conduct.

Our ability to comply with the covenants contained in our senior credit facilities or in the agreements governing our
future indebtedness, and our ability to avoid liquidity events, may be affected by events, or our future performance, which
are subject to factors beyond our control, including prevailing economic, financial, industry and weather conditions, such as
the level, timing and location of snowfall and general economic conditions in the snowbelt regions of North America. On
January 29, 2024, we amended our credit facility to provide greater financial flexibility by increasing the leverage ratio
covenant at December 31, 2023 through June 30, 2024. A failure to comply with these covenants could result in a default
under our senior credit facilities, which could prevent us from paying dividends, repurchasing equity, borrowing additional
amounts and using proceeds of our inventory and accounts receivable, and also permit the lenders to accelerate the payment
of such debt. If any of our debt is accelerated or if a liquidity event (or event of default) occurs that results in collateral
proceeds being applied to reduce such debt, we may not have sufficient funds available to repay such debt and our other
obligations, in which case, our business could be halted and such lenders could proceed against any collateral securing that
debt. Further, if the lenders accelerate the payment of the indebtedness under our senior credit facilities, our assets may not
be sufficient to repay in full the indebtedness under our senior credit facilities and our other indebtedness, if any. We cannot
assure you that these covenants will not adversely affect our ability to finance our future operations or capital needs to pursue
available business opportunities or react to changes in our business and the industry in which we operate.

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Item 1B. Unresolved Staff Comments

Not applicable.

Item 1C. Cybersecurity

The Company’s Board of Directors (the “Board”) recognizes the critical importance of maintaining the trust and
confidence of our customers, clients, business partners and employees. The Board is actively involved in oversight of the
Company’s risk management program, and cybersecurity represents an important component of the Company’s overall
approach to enterprise risk management (“ERM”). The Company’s cybersecurity policies, standards, processes, and practices
are fully integrated into the Company’s ERM program and are based on recognized frameworks established by the National
Institute of Standards and Technology, the International Organization for Standardization and other applicable industry
standards. In general, the Company seeks to address cybersecurity risks through a comprehensive, cross-functional approach
that is focused on preserving the confidentiality, security and availability of the information that the Company collects and
stores by identifying, preventing and mitigating cybersecurity threats and effectively responding to cybersecurity incidents
when they occur. Management's philosophy on cybersecurity is to be vigilant in protecting the Company and its constituents
through robust investments and employee awareness to aid in the prevention, detection and mitigation of cyber threats, while
recognizing that not all threats are preventable.

Risk Management and Strategy

As one of the critical elements of the Company’s overall ERM approach, the Company’s cybersecurity program is
focused on the following key areas:

Governance: As discussed in more detail under the heading “Governance,” the Board’s oversight of cybersecurity
risk management is supported by the Audit Committee of the Board (the “Audit Committee”), which regularly interacts with
executive leadership, the Company’s ERM function, and the Company’s Vice President of Information Technology.

Collaborative Approach: The Company has implemented a comprehensive, cross-functional approach to
identifying, preventing and mitigating cybersecurity threats and incidents, while also implementing controls and procedures
that provide for the prompt escalation of certain cybersecurity incidents so that decisions regarding the public disclosure and
reporting of such incidents can be made by management in a timely manner.

Technical Safeguards: The Company deploys technical safeguards that are designed to protect the Company’s
information systems from cybersecurity threats, including firewalls, intrusion prevention and detection systems, anti-malware
functionality and access controls, which are evaluated and improved through vulnerability assessments and cybersecurity
threat intelligence.

Incident Response and Recovery Planning: The Company has established and maintains incident response and
recovery plans that address the Company’s response to a cybersecurity incident, and such plans are tested and evaluated on a
regular basis.

Third-Party Risk Management: The Company maintains a comprehensive, risk-based approach to identifying and
overseeing cybersecurity risks presented by third parties, including vendors, service providers and other external users of the
Company’s systems, as well as the systems of third parties that could adversely impact our business in the event of a
cybersecurity incident affecting those third-party systems.

Education and Awareness: The Company provides regular, mandatory training for personnel regarding
cybersecurity threats as a means to equip the Company’s personnel with effective tools to address cybersecurity threats, and
to communicate the Company’s evolving information security policies, standards, processes and practices.

The Company engages in the periodic assessment and testing of the Company’s policies, standards, processes and
practices that are designed to address cybersecurity threats and incidents. These efforts include a wide range of activities,
including audits, assessments, tabletop exercises, threat modeling, vulnerability testing and other exercises focused on
evaluating the effectiveness of our cybersecurity measures and planning. The Company regularly engages third parties to
perform assessments on our cybersecurity measures, including information security maturity assessments, audits and
independent reviews of our information security control environment and operating effectiveness. The results of such
assessments, audits and reviews are reported to executive management, and the Company adjusts its cybersecurity policies,
standards, processes and practices as necessary based on the information provided by these assessments, audits and reviews.

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Governance

The Board, in coordination with the Audit Committee, oversees the Company’s ERM process, including the
management of risks arising from cybersecurity threats. The Board and the Audit Committee each receive regular
presentations and reports on cybersecurity risks, which address a wide range of topics including recent developments,
evolving standards, vulnerability assessments, third-party and independent reviews, the threat environment, technological
trends and information security considerations arising with respect to the Company’s peers and third parties. The Board and
the Audit Committee also receive prompt and timely information regarding any cybersecurity incident that meets established
reporting thresholds, as well as ongoing updates regarding any such incident until it has been addressed. On an annual basis,
the Board and the Audit Committee discuss the Company’s approach to cybersecurity risk management with the members of
senior leadership, which includes the Company’s Vice President of Information Technology.

The Vice President of Information Technology, in coordination with executive leadership including our Interim
Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), works collaboratively across the Company to
implement a program designed to protect the Company’s information systems from cybersecurity threats and to promptly
respond to any cybersecurity incidents in accordance with the Company’s incident response and recovery plans. To facilitate
the success of the Company’s cybersecurity risk management program, multidisciplinary teams throughout the Company are
deployed to address cybersecurity threats and to respond to cybersecurity incidents. Through ongoing communications with
these teams, the Vice President of Information Technology monitors the prevention, detection, mitigation and remediation of
cybersecurity threats and incidents in real time and reports such threats and incidents to the Audit Committee when
appropriate.

The Vice President of Information Technology has been with the Company for over 25 years in various roles in
information technology and information security. The Company’s Interim CEO and CFO each hold undergraduate and
graduate degrees in their respective fields, and each have over 25 years of experience managing risks at the Company and at
similar companies, including risks arising from cybersecurity threats.

Cybersecurity threats, including as a result of any previous cybersecurity incidents, have not materially affected or
are reasonably likely to affect the Company, including its business strategy, results of operations or financial condition.

Item 2. Properties

Our significant facilities by location, ownership, and function as of December 31, 2024 are as follows:

Location

Ownership
Products / Use
Milwaukee, Wisconsin ...............................
Leased
Corporate headquarters
Milwaukee, Wisconsin (1) ...........................
Leased
Work Truck Attachments
Albany, New York .....................................
Leased
Work Truck Solutions
Baltimore, Maryland (1) ..............................
Leased
Work Truck Solutions
Bucyrus, Ohio ............................................
Leased
Work Truck Solutions
Chalfont, Pennsylvania ..............................
Leased
Work Truck Solutions
Cinnaminson, New Jersey ..........................
Leased
Work Truck Solutions
Fulton, Missouri .........................................
Leased
Work Truck Solutions
Huntley, Illinois .........................................
Leased
Work Truck Solutions
Kansas City, Missouri ................................
Leased
Work Truck Solutions
Kenvil, New Jersey ....................................
Leased
Work Truck Solutions
Kings Park, New York (1) ...........................
Leased
Work Truck Solutions
Madison Heights, Michigan .......................
Leased
Work Truck Attachments
Manchester, Iowa .......................................
Leased
Work Truck Solutions
Manchester, Iowa .......................................
Leased
Work Truck Solutions
Queensbury, New York ..............................
Leased
Work Truck Solutions
Rockland, Maine ........................................
Owned
Work Truck Attachments
Rockland, Maine ........................................
Leased
Work Truck Attachments
Skowhegan, Maine .....................................
Leased
Work Truck Solutions
Smithfield, Rhode Island ............................
Leased
Work Truck Solutions
Watertown, New York ...............................
Leased
Work Truck Solutions
China ..........................................................
Leased
Sourcing Office

(1) – Two facilities.

25
Item 3. Legal Proceedings

In the ordinary course of business, we are engaged in various litigation primarily including product liability and
intellectual property disputes. However, management does not believe that any current litigation is material to our operations
or financial position. In addition, we are not currently party to any climate change or environmental-related claims or legal
matters.

Item 4. Mine Safety Disclosures

Not applicable.

Information about our Executive Officers

Effective July 8, 2024, Robert McCormick retired as the Company's President and Chief Executive Officer. Effective
July 8, 2024, James Janik was elected as the Company's Interim President and Chief Executive Officer. Linda R. Evans, the
Company’s Chief Human Resources Officer, retired effective January 2, 2025. Ms. Evans remained an executive officer of
the Company until December 31, 2024. Our executive officers as of February 25, 2025 were as follows:

Name
Age
Position
James Janik ....................................
68
Interim President and Chief Executive Officer
Sarah Lauber..................................
53
Executive Vice President, Chief Financial Officer & Secretary
Mark Van Genderen ......................
56
Chief Operating Officer and President, Work Truck Attachments

James Janik has been serving as our Interim President and Chief Executive Officer since July 2024, Chairman of
the Board since 2014 and as a director since 2004. Mr. Janik served as the Company’s Executive Chairman from May 2024
until July 2024 and, previously, from January 2019 until his initial retirement as an officer of the Company in April of 2020.
Mr. Janik previously served as the Company’s President and Chief Executive Officer from 2004 until January 2019. Mr.
Janik also served as President and Chief Executive Officer of Douglas Dynamics Incorporated, the entity that previously
operated the Company’s business, from 2000 to 2004. Mr. Janik was Director of Sales of the Company’s Western Products
division from 1992 to 1994, General Manager of the Western Products division from 1994 to 2000 and Vice President of
Marketing and Sales from 1998 to 2000. Prior to joining the Company, Mr. Janik was the Vice President of Marketing and
Sales of Sunlite Plastics Inc., a custom extruder of thermoplastic materials, for two years. During the 11 prior years, Mr. Janik
held a number of key marketing, sales and production management positions for John Deere Company. Mr. Janik has served
on the board of directors of Jason Industries L.L.C. since August 2020.

Sarah Lauber has been serving as our Executive Vice President, Chief Financial Officer and Secretary since March
2023. Prior to this role, she served as our Chief Financial Officer and Secretary from August 2017 until March 2023. Prior to
joining us, Ms. Lauber served as Senior Vice President and Chief Financial Officer of Jason Industries, Inc., a global industrial
manufacturing company, since January 2016 and as Jason Industries’ Chief Financial Officer since 2015. Prior to joining
Jason Industries, Ms. Lauber served as Senior Vice President, Financial Planning and Analysis at Regal Rexnord Corporation
(f/k/a Regal Beloit Corporation), a manufacturer of electric motors, electric motion controls, power generation and power
transmission products, from 2011 until 2015. Ms. Lauber previously was employed by A.O. Smith Corporation’s Electrical
Products Company (“EPC”) from 2002 until 2011 and held various roles, the latest of which was Chief Financial Officer
from 2006 until EPC was acquired by Regal Rexnord in 2011. Ms. Lauber is a member of the board of directors of The
Timken Company, where she serves on the audit and compensation committees of the board of directors.

Mark Van Genderen has been serving as our Chief Operating Officer and President, Work Truck Attachments
since September 2024. Prior to this role, he served as our President, Work Truck Attachments since January 2023, President,
Commercial Snow & Ice from September 2021 until January 2023 and as Vice President of Business Development from
November 2020 until September 2021. Prior to his time at Douglas Dynamics, Mr. Van Genderen spent 21 years in various
leadership roles at the Harley-Davidson Motor Company, manufacturer of premium motorcycles. While at Harley-Davidson,
he held a diverse range of responsibilities including leadership roles in manufacturing, product development, sales and
marketing, finance, and dealer development. More recently, he led Harley-Davidson’s expansion in Latin America, the
company’s parts and accessories product development function, and the riding gear and lifestyle apparel division, which
include the company’s eCommerce business.

Executive officers are elected by, and serve at the discretion of, the Board of Directors. There are no family
relationships between any of our directors or executive officers.

26
PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities

Our Common Stock has been traded on the New York Stock Exchange since the second quarter of 2010 under the
symbol “PLOW.”

At February 25, 2025, there were 57 registered record holders of our Common Stock.

In accordance with our dividend policy, dividends are declared and paid quarterly at the discretion of the board of
directors. Additionally, special dividends may be declared and paid at the discretion of the board of directors. We paid
quarterly dividends to the holders of our Common Stock in 2023 and 2024.

Item 12 of this Annual Report on Form 10-K contains certain information relating to the Company’s equity
compensation plans.

The following information in this Item 5 of this Annual Report on Form 10-K is not deemed to be “soliciting
material” or to be “filed” with the SEC or subject to Regulation 14A or 14C under the Securities Exchange Act of 1934, as
amended (the “Exchange Act”) or to the liabilities of Section 18 of the Exchange Act, and will not be deemed to be
incorporated by reference into any filing under the Securities Act of 1933, as amended (the “Securities Act”) or the Exchange
Act, except to the extent we specifically incorporate it by reference into such a filing.

The graph set forth below compares the cumulative total stockholder return on our common stock between January 1,
2020 and December 31, 2024, with the cumulative total return of The Dow Jones Industrial Average and Russell 2000 Index.
This graph assumes the investment of $100 on January 1, 2020 in our common stock, the Dow Jones Industrial Average and
Russell 2000 Index, and assumes the reinvestment of dividends. The Russell 2000 was chosen because we do not believe we
can reasonably identify an industry index or specific peer group that would offer a meaningful comparison.
The Russell 2000 represents a broad-based index of companies with similar market capitalization.

We did not sell any equity securities during 2024 in offerings that were not registered under the Securities Act.

27
Issuer Purchases of Equity Securities

On February 16, 2022, our Board of Directors authorized the purchase of up to $50.0 million in shares of common
stock at market value (the "2022 repurchase plan"). This authorization does not have an expiration date. Repurchases under
the program may be made in the open market, in privately negotiated transactions or otherwise, with the amount and timing
of repurchases depending on market conditions and corporate needs. We may also, from time to time, enter into Rule 10b5-
1 trading plans to facilitate repurchases of shares under this authorization. This program does not obligate us to acquire any
particular amount of shares and the program may be extended, modified, suspended or discontinued at any time at the
Company's discretion. Shares repurchased under the 2022 repurchase plan are retired.

Total share repurchases under the 2022 repurchase plan for the quarter ended December 31, 2024 were as follows:

Period

Total number
of shares
purchased

Average price
paid per share
Number of
shares
purchased as
part of the
publicly
announced
program

Approximate
dollar value of
shares still
available to be
purchased under
the program
(000's)

10/1/2024 - 10/31/2024 .............................
- $
-
- $
44,000
11/1/2024 - 11/30/2024 .............................
- $
-
- $
44,000
12/1/2024 - 12/31/2024 .............................
- $
-
- $
44,000
Total ..........................................................
- $
-
- $
44,000

Item 6. [Reserved]

This item is no longer required as the Company as applied the amendment to Regulations S-K Item 301 contained
in the Securities and Exchange Commission’s Release No. 33-10890.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations for the years ended
December 31, 2023 and 2024 should be read together with our audited consolidated financial statements and related notes
included elsewhere in this Annual Report on Form 10-K. For a discussion and analysis of the year ended December 31,
2023 compared to December 31, 2022, please refer to “Management’s Discussion and Analysis of Financial Condition and
Results of Operations” included in Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2023, filed
with the SEC on February 27, 2024. Some of the information contained in this discussion and analysis or set forth elsewhere
in this Annual Report on Form 10-K, including information with respect to our plans and strategies for our business, includes
forward-looking statements that involve risks and uncertainties. You should review the “Risk Factors” section of this Annual
Report on Form 10-K for a discussion of important factors that could cause actual results to differ materially from the results
described in, or implied by, the forward-looking statements contained in this Annual Report on Form 10-K.

Results of Operations

Operating Segments

We conduct business in two segments: Work Truck Attachments and Work Truck Solutions. Under this reporting
structure, our two reportable business segments are as follows:

Work Truck Attachments. The Work Truck Attachments segment includes our operations that manufacture
and sell snow and ice control attachments and other products sold under the FISHER®, WESTERN®, and SNOWEX®
brands, as well as our vertically integrated products. As described under “Seasonality and Year-To- Year Variability,”
the Work Truck Attachments segment is seasonal and, as a result, its results of operations can vary from quarter-to-
quarter and from year-to-year.

Work Truck Solutions. The Work Truck Solutions segment includes manufactured municipal snow and ice
control products under the HENDERSON® brand and the upfit of market leading attachments and storage solutions under
the HENDERSON® brand, and the DEJANA® brand and its related sub-brands.

28
See Note 16 to the Consolidated Financial Statements for information concerning individual segment performance
for the years ended December 31, 2024, December 31, 2023 and December 31, 2022, respectively.

Business Update

As a result of recent market volatility, supply chain disruptions, labor strikes, labor shortages, inflationary pressures
(including around materials, freight, labor and benefits), and other economic trends, our results of operations have been
impacted in the years ended December 31, 2024, 2023 and 2022, and may be significantly impacted in future years. See
below for further discussion of the impact to our financial statements.

We may have challenges in short-term liquidity that could impact our ability to fund working capital needs. We have
taken various steps to preserve liquidity, including reducing discretionary spending and deferring payments where appropriate
within existing contractual terms, while remaining committed to long term growth projects. In January 2024, we
implemented the 2024 Cost Savings Program, which is primarily in the form of restructuring charges for salaried headcount
reductions and impacted both the Work Truck Attachments segment and corporate functions. See Note 21 to the Consolidated
Financial Statements for additional information regarding the 2024 Cost Savings Program. In addition, as discussed under
the section "Liquidity and Capital Resources" below, in January 2023, we expanded the borrowing capacity of our revolving
credit facility, and in January 2024, we amended our Credit Agreement to increase the minimum required leverage ratio from
December 31, 2023 through June 30, 2024. As discussed in Note 6 and Note 8 to the Consolidated Financial Statements, in
September 2024, we executed a sale leaseback transaction for gross proceeds of $64.2 million, and, using a portion of the
proceeds, we paid down $42.0 million on our term loan. In consideration of these recent macroeconomic trends and the
various actions that we have taken to preserve our liquidity, cash on hand and cash we generated from operations, as well as
available credit under our senior credit facilities as amended during 2021, provided adequate and incremental funds
throughout 2024, and we expect will continue to provide us with adequate funds in the foreseeable future.

Overview

While our Work Truck Solutions operations are not as reliant on snowfall, snowfall is still the primary factor in
evaluating our business results due to its significant impact on the results of operations of our Work Truck Attachments
segment. We typically compare the snowfall level in a given period both to the snowfall level in the prior season and to those
snowfall levels we consider to be average. References to “average snowfall” levels below refer to the aggregate average
inches of snowfall recorded in 66 cities in 26 snow-belt states in the United States during the annual snow season, from
October 1 through March 31, from 1980 to 2024. During this period, snowfall averaged 2,978 inches, with the low in such
period being 1,794 inches and the high being 4,502 inches. Meanwhile, over the last 10 years, snowfall averaged 2,738 inches
for the snow periods ending March 31, 2015 through 2024.

During the six-month snow season ended March 31, 2024, snowfall was 1,836 inches, which was 38.4% lower than
averages from 1980 to 2024. During the six-month snow season ended March 31, 2023, we experienced snowfall that was
11.4% lower than averages from 1980 to 2023. During the six-month snow season ended March 31, 2022, we experienced
snowfall that was 13.3% lower than averages from 1980 to 2022. Snowfall was 32.9% below average during the snow season
ended March 31, 2024 when compared to the average over the last 10 years and was the sixth snow season in a row below
this average. Snowfall was 11.0% below average during the snow season ended March 31, 2023 when compared to the
average over the previous 10 years. Additionally, the timing and location of snowfall can have an impact on our financial
results. Specifically, in the snow season ended March 31, 2024, low snowfall in our core markets led to lower volumes, and
in the snow season ended March 31, 2023, major cities along the I-95 corridor on the East Coast did not see any measurable
snowfall. We believe the below-average snowfall in the years ended December 31, 2024 and 2023 negatively impacted our
business. In 2022 and 2023, we encountered chassis availability issues with certain of our OEM partners, which negatively
impacted our business.

29
The following table sets forth, for the periods presented, the consolidated statements of income of the Company and
its subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. In the table below and
throughout this “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” consolidated
statements of income data for the years ended December 31, 2022, 2023 and 2024 have been derived from our audited
consolidated financial statements. The information contained in the table below should be read in conjunction with our
consolidated financial statements and the related notes included elsewhere in this Annual Report on Form 10-K.

For the year ended December 31,

2022

2023

2024

(in thousands)

Net sales ............................................................................................. $
616,068 $
568,178 $
568,504
Cost of sales .......................................................................................
464,612
433,908
421,667
Gross profit .........................................................................................
151,456
134,270
146,837
Selling, general, and administrative expense ......................................
82,183
78,841
91,682
Impairment charges ............................................................................
-
-
1,224
Gain on sale leaseback transaction .....................................................
-
-
(42,298)
Intangibles amortization .....................................................................
10,520
10,520
7,520
Income from operations ......................................................................
58,753
44,909
88,709
Interest expense, net ...........................................................................
(11,253)
(15,675 )
(15,260)
Other income (expense), net ...............................................................
(139)
-
442
Income before taxes ...........................................................................
47,361
29,234
73,891
Income tax expense ............................................................................
8,752
5,511
17,740
Net income ......................................................................................... $
38,609 $
23,723 $
56,151

The following table sets forth, for the periods indicated, the percentage of certain items in our consolidated statement
of income data, relative to net sales:

For the year ended December 31,

2022

2023

2024

Net sales ............................................................................................
100.0%
100.0%
100.0%
Cost of sales ......................................................................................
75.4%
76.4%
74.2%
Gross profit ........................................................................................
24.6%
23.6%
25.8%
Selling, general, and administrative expense .....................................
13.4%
13.9%
16.1%
Impairment charges ...........................................................................
0.0%
0.0%
0.2%
Gain on sale leaseback transaction ....................................................
0.0%
0.0%
(7.4)%
Intangibles amortization ....................................................................
1.7%
1.8%
1.3%
Income from operations .....................................................................
9.5%
7.9%
15.6%
Interest expense, net ..........................................................................
(1.8)%
(2.8)%
(2.7)%
Other income (expense), net ..............................................................
(0.0)%
0.0%
0.1%
Income before taxes ..........................................................................
7.7%
5.1%
13.0%
Income tax expense ...........................................................................
1.4%
0.9%
3.1%
Net income ........................................................................................
6.3%
4.2%
9.9%

30
Year Ended December 31, 2024 Compared to Year Ended December 31, 2023

Net Sales. Net sales were $568.5 million for the year ended December 31, 2024 compared to $568.2 million in 2023,
an increase of $0.3 million, or 0.1%. Net sales increased for the year ended December 31, 2024 primarily due to higher
volumes at Work Truck Solutions, somewhat offset by low snowfall in our core markets leading to lower volumes at Work
Truck Attachments in 2024. See below for a discussion of net sales for each of our segments.

For the year ended December 31,

2022

2023

2024

Net sales

Work Truck Attachments ................................................................... $
382,296 $
291,723 $
256,010
Work Truck Solutions ........................................................................
233,772
276,455
312,494

$
616,068 $
568,178 $
568,504

Net sales at our Work Truck Attachment segment were $256.0 million for the year ended December 31, 2024
compared to $291.7 million in the year ended December 31, 2023, a decrease of $35.7 million primarily due to low snowfall
in our core markets, as well as the impact of multiple years of below average snowfall, leading to lower volumes in 2024.
The most recent snow season ended March 2024 was approximately 32.9% below the 10-year average.

Net sales at our Work Truck Solutions segment were $312.5 million for the year ended December 31, 2024 compared
to $276.5 million in the year ended December 31, 2023, an increase of $36.0 million due primarily as a result of higher
volumes on improved throughput, price increase realization, as well as higher sales of Company-purchased chassis.

Cost of Sales. Cost of sales was $421.7 million for the year ended December 31, 2024 compared to $433.9 million
in 2023, a decrease of $12.2 million, or 2.8%. The decrease in cost of sales for the year ended December 31, 2024 compared
to the prior year was driven by the lower volumes at Work Truck Attachments. Cost of sales as a percentage of net sales
decreased from 76.4% for the year ended December 31, 2023 to 74.2% for the year ended December 31, 2024. The
decrease in cost of sales as a percentage of sales in the year ended December 31, 2024 when compared to the year ended
December 31, 2023 was primarily due to lower spending in conjunction with our 2024 Cost Savings Program, as well as
improved throughput at Work Truck Solutions.

Gross Profit. Gross profit was $146.8 million for the year ended December 31, 2024 compared to $134.3 million in
2023, an increase of $12.5 million, or 9.3%, due to the increase in net sales described above under “—Net Sales.” As a
percentage of net sales, gross profit increased from 23.6% for the year ended December 31, 2023 to 25.8% for the
corresponding period in 2024, as a result of the factors discussed above under “—Cost of Sales.”

Selling, General and Administrative Expense. Selling, general and administrative expenses, including intangible
asset amortization, were $99.2 million for the year ended December 31, 2024 compared to $89.4 million for the year ended
December 31, 2023, an increase of $9.8 million, or 11.0%. The increase compared to the year ended December 31, 2023
was due to $5.2 million in transaction costs related to the sale leaseback transaction, higher stock based compensation of
$3.9 million and incentive-based compensation of $1.8 million resulting from the increase in operating performance,
$1.4 million in CEO transition costs, an increase in employee benefits costs of $1.0 million, and an increase in severance
costs of $0.9 million related to salaried headcount reductions at our Work Truck Attachments segment and our corporate
function as part of our 2024 Cost Savings Program. The increase was somewhat offset by lower intangibles amortization of
$3.0 million related to an asset becoming fully amortized when compared to the prior year, lower advertising expenses of
$0.8 million, as well as other cost savings related to our 2024 Cost Savings Program. As a percentage of net sales, selling,
general and administrative expenses, including intangibles amortization, increased from 15.7% for the year ended December
31, 2023 to 17.4% for the corresponding period in 2024.

31
Impairment Charges. Impairment charges were $1.2 million in the year ended December 31, 2024 compared to
$0.0 million in the prior year. The impairment charges in 2024 relate to certain internally developed software at our Work
Truck Attachments segment and represent the full capitalized value of the software.

Gain on Sale Leaseback Transaction. Gain on sale leaseback transaction was $42.3 million in the year
ended December 31, 2024 compared to $0.0 million in the prior year, see Note 6 to the Consolidated Financial Statements
for additional information on the sale leaseback transaction.

Interest Expense. Interest expense was $15.3 million for the year ended December 31, 2024 compared to
$15.7 million in the corresponding period in 2023. The decrease in interest expense for the year ended December 31, 2024
was primarily due to lower interest on our revolver of $0.9 million due to having lower revolver borrowings compared to the
prior year. In addition, the decrease was due to lower interest on our term loan of $0.5 million related to lower interest rates,
as well as lower debt as a result of a $42.0 million prepayment made in September 2024. See Note 8 to the Consolidated
Financial Statements for additional information. The decrease in interest expense was somewhat offset by an increase in
interest on our floor plan agreement, see Note 5 to the Consolidated Financial Statements for additional information regarding
the floor plan agreement.

Income Tax Expense. Our effective combined federal and state tax rate for 2024 was 24.0% compared to 18.9% for
2023. The effective tax rate for the year ended December 31, 2023 was impacted by a tax benefit related to the purchase of
investment tax credits included in the annual effective tax rate. In addition, the rate was lower in 2023 related to higher credits
that favorably impacted the rate.

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets
and liabilities for financial reporting purposes and the amounts used for income tax purposes. The largest item affecting the
deferred taxes is the difference between book and tax amortization of goodwill and other intangible amortization.

Net Income. Net income for the year ended December 31, 2024 was $56.2 million compared to net income of
$23.7 million for 2023, an increase of $32.5 million. This increase was driven by the factors described above.

32
Discussion of Critical Accounting Policies and Estimates

Our consolidated financial statements are prepared in accordance with GAAP. The preparation of these consolidated
financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities,
revenues, costs and expenses, and related disclosures. These estimates and assumptions are often based on judgments that we
believe to be reasonable under the circumstances at the time made, but all such estimates and assumptions are inherently
uncertain and unpredictable. Actual results may differ from those estimates and assumptions, and it is possible that other
professionals, applying their own judgment to the same facts and circumstances, could develop and support alternative
estimates and assumptions that would result in material changes to our operating results and financial condition. We evaluate
our estimates and assumptions on an ongoing basis. Our estimates are based on historical experience and various other
assumptions that we believe to be reasonable under the circumstances.

The most significant accounting estimates inherent in the preparation of our financial statements include estimates
used in revenue recognition, the accounting for our sale leaseback transaction, and the impairment assessment of indefinite
lived intangible assets and goodwill.

We believe the following are the critical accounting policies and estimates that affect our financial condition and
results of operations.

Sale Leaseback Transaction

We assess sale leaseback arrangements to determine whether a sale has occurred under Accounting Standards
Codification (“ASC”) Topic 606: Revenue from Contracts with Customers (“ASC 606”), as well as assess whether the
classification of the lease and/or the payment terms associated with the renewal options preclude sale accounting under ASC
842, Leases (“ASC 842”). These assessments involve a determination of whether or not control of the underlying property
has been transferred to the buyer. If we determine control of the underlying property has been transferred to the buyer, we
account for the arrangement as a sale and leaseback transaction. If we determine control of the underlying property has not
been transferred to the buyer, we account for the arrangement as a financing transaction.

The determination of the fair values of the properties related to our sale-leaseback arrangement requires subjectivity
and estimates, including the use of multiple valuation techniques and uncertain inputs, such as market price per square foot
and assumed capitalization rates or the replacement cost of the assets, where applicable. Where real estate valuation expertise
is required, we obtain independent third-party appraisals to determine the fair value of the underlying asset. While determining
fair value requires a variety of input assumptions and judgment, we believe our estimates of fair value are reasonable.

During the year ended December 31, 2024, we closed on a sale leaseback transaction with an unrelated third party.
Under this transaction, we sold seven properties with a combined net book value of $21.9 million for gross proceeds of $64.2
million, which was reduced by transaction costs of $5.5 million for net cash proceeds of approximately $58.7 million. The
properties in the sale leaseback transaction are comprised of three facilities located in Milwaukee, Wisconsin
and four additional facilities located in each of Huntley, Illinois; Manchester, Iowa; Rockland, Maine; and Madison Heights,
Michigan, totaling approximately 780,000 square feet of manufacturing and upfitting space. The lease agreement has an
initial term of 15 years, with two optional 10-year renewal options. We recognized a gain of $42.3 million on this transaction,
which is included in Gain on sale leaseback transaction in the Consolidated Statements of Income. Right-of-use assets and
lease liabilities recognized related to this sale leaseback transaction were $51.9 million and $51.9 million, respectively.

33
Revenue Recognition

Work Truck Attachments Segment Revenue Recognition

We recognize revenue upon shipment of equipment to the customer. Within the Work Truck Attachments segment,
we offer a variety of discounts and sales incentives to our distributors. The estimated liability for sales discounts and
allowances is recorded at the time of sale as a reduction of net sales using the expected value method. The liability is estimated
based on the costs of the program, the planned duration of the program and historical experience.

Work Truck Solutions Segment Revenue Recognition

The Work Truck Solutions segment primarily participates in the truck and vehicle upfitting industry in the United
States. Customers are billed separately for the truck chassis by the chassis manufacturer. We only record sales for the amount
of the upfit, excluding the truck chassis. Generally, we obtain the truck chassis from the truck chassis manufacturer through
either our floor plan agreement with a financial institution or bailment pool agreement with the truck chassis manufacturer.
Additionally, in some instances we upfit chassis which are owned by the end customer. For truck chassis acquired through
the floor plan agreement, we hold title to the vehicle from the time the chassis is received by us until the completion of the
up-fit. Under the bailment pool agreement, we do not take title to the truck chassis, but rather only hold the truck chassis on
consignment. We pay interest on both of these arrangements. We record revenue in the same manner net of the value of the
truck chassis in both our floor plan and bailment pool agreements. We do not set the price for the truck chassis, are not
responsible for the billing of the chassis and do not have inventory risk in either the bailment pool or floor plan agreements.
The Work Truck Solutions segment also has manufacturing operations of municipal snow and ice control equipment, where
revenue is recognized upon shipment of equipment to the customer.

Revenues from the sales of the Work Truck Solutions products are recognized net of the truck chassis with the
selling price to the customer recorded as sales and the manufacturing and up-fit cost of the product recorded as cost of sales.
In these cases, we act as an agent as we do not have inventory or pricing control over the truck chassis. Within the Work
Truck Solutions segment, we also sell certain third-party products for which we act as an agent. These sales do not meet the
criteria for gross sales recognition, and thus are recognized on a net basis at the time of sale. Under net sales recognition, the
cost paid to the third-party service provider is recorded as a reduction to sales, resulting in net sales being equal to the gross
profit on the transaction.

See Note 3 to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K
for a more detailed description of our revenue recognition policies.

Indefinite Lived Intangible Assets

We perform an annual impairment test for our indefinite lived intangible assets, and more frequently if an event or
circumstances indicate that an impairment loss has been incurred. We carry tradenames associated with our reporting units.
Conditions that would trigger an impairment assessment include, but are not limited to, a significant adverse change in legal
factors or business climate that could affect the value of an asset. The amount of impairment is determined by the amount the
carrying value of the intangible asset exceeds its fair value. If the fair value of the tradename is greater than the carrying
amount, there is no impairment. If the carrying amount is greater than the fair value, an impairment loss is recognized equal
to the difference. Annual impairment tests conducted by us on December 31, 2024, 2023 and 2022 resulted in no adjustment
to the carrying value of our indefinite lived intangible assets.

34
Our indefinite lived intangible assets could be impaired in future periods. A number of factors, many of which we
have no ability to control, could affect our financial condition, operating results and business prospects and could cause actual
results to differ from the estimates and assumptions we employed. These factors include:

●
a prolonged global economic crisis;

●
significant inflation or disruptions in the supply of chassis or component parts, as a result from computer chip
shortages, labor strikes or otherwise;

●
a decrease in the demand for our products;

●
the inability to develop new and enhanced products and services in a timely manner;

●
a significant adverse change in legal factors or in the business climate;

●
an adverse action or assessment by a regulator; and

●
successful efforts by our competitors to gain market share in our markets.

At December 31, 2024, our Dejana reporting unit had a tradename of $14.0 million and an estimated fair value of
$17.6 million. If we are unable to attain the financial projections used in calculating the fair value, or if there are significant
market conditions impacting the market approach, including the factors noted above, our Dejana tradename could be at risk
of impairment. If we experience delays by our supplier and OEM partners in the production and delivery of chassis for a
prolonged period of time, which could negatively affect our financial results, the Dejana tradename may be impaired. The
discount rate and royalty rate used in the calculation of the fair value are sensitive and based on our assumptions, and changes
to those assumptions could cause the Dejana tradename to be at risk of impairment. There were no indicators of impairment
subsequent to the December 31, 2024 impairment test.

Goodwill

We perform an annual impairment test for goodwill and more frequently if an event or circumstances indicate that
an impairment loss has been incurred. Conditions that would trigger an impairment assessment include, but are not limited
to, a significant adverse change in legal factors or business climate that could affect the value of an asset. The amount of
goodwill impairment is determined by the amount the carrying value of the reporting unit exceeds its fair value. We have
determined we have three reporting units, and all significant decisions are made on a company-wide basis by our chief
operating decision maker. The fair value of the reporting unit is estimated by using an income and market approach. The
estimated fair value is compared with our aggregate carrying value. If our fair value is greater than the carrying amount, there
is no impairment. If our carrying amount is greater than the fair value, an impairment loss is recognized equal to the difference.
Annual impairment tests conducted by us on December 31, 2024 and 2023 resulted in no adjustment to the carrying value of
our goodwill.

The Work Truck Attachments segment consists of one reporting unit: Commercial Snow & Ice. The impairment
tests performed as of December 31, 2023 and December 31, 2024 indicated no impairment for the Commercial Snow & Ice
reporting unit. The Work Truck Solutions consists of two reporting units: Municipal and Dejana. Each of the Municipal and
Dejana reporting units had $0 in goodwill at December 31, 2023 and December 31, 2024.

Liquidity and Capital Resources

Our principal sources of cash have been and we expect will continue to be cash from operations and borrowings
under our senior credit facilities.

Our primary uses of cash are to provide working capital, meet debt service requirements, finance capital
expenditures, pay dividends under our dividend policy and support our growth, including through potential acquisitions, and
for other general corporate purposes. For a description of the seasonality of our working capital rates see “—Seasonality and
Year-To-Year Variability.”

35
Our Board of Directors has adopted a dividend policy that reflects an intention to distribute to our stockholders a
regular quarterly cash dividend. The declaration and payment of these dividends to holders of our common stock is at the
discretion of our Board of Directors and depends upon many factors, including our financial condition and earnings, legal
requirements, taxes and other factors our Board of Directors may deem to be relevant. The terms of our indebtedness may
also restrict us from paying cash dividends on our common stock under certain circumstances. As a result of this dividend
policy, we may not have significant cash available to meet any large unanticipated liquidity requirements. As a result, we
may not retain a sufficient amount of cash to fund our operations or to finance unanticipated capital expenditures or growth
opportunities, including acquisitions. Our Board of Directors may, however, amend, revoke or suspend our dividend policy
at any time and for any reason.

On February 16, 2022, our Board of Directors authorized the purchase of up to $50.0 million in shares of common
stock at market value. This authorization does not have an expiration date. Repurchases under the program may be made in
the open market, in privately negotiated transactions or otherwise, with the amount and timing of repurchases depending on
market conditions and corporate needs. We may also, from time to time, enter into Rule 10b5-1 trading plans to facilitate
repurchases of its shares under this authorization. This program does not obligate us to acquire any particular amount of
shares and the program may be extended, modified, suspended or discontinued at any time at our discretion. We made
$0.0 million in share repurchases during the year ended December 31, 2024. We made $0.0 million in share repurchases
during the year ended December 31, 2023.

As of December 31, 2024, we had liquidity comprised of approximately $5.1 million in cash and cash equivalents
and borrowing availability of approximately $149.5 million under our revolving credit facility. We have taken various steps
to preserve liquidity, including reducing discretionary spending and deferring payments where appropriate within existing
contractual terms, while remaining committed to long-term growth projects. In January 2024, we implemented the 2024 Cost
Savings Program, which is primarily in the form of restructuring charges for salaried headcount reductions and impacted both
the Work Truck Attachments segment and corporate functions. In addition, as discussed in Note 6 and Note 8 to the
Consolidated Financial Statements, in September 2024, we executed a sale leaseback transaction for gross proceeds of $64.2
million, and, using a portion of the proceeds, we paid down $42.0 million on our term loan. In consideration of the
macroeconomic factors facing the Company and the various actions we have taken to preserve our liquidity, we expect that
cash on hand, cash generated from operations, as well as available credit under our senior credit facilities will provide
adequate funds for the purposes described above for both 12 months from the date of this report, as well as beyond 12 months
from the date of this report.

On June 9, 2021, Douglas Dynamics, Inc. (the “Company”), as guarantor, and its wholly-owned subsidiaries,
Douglas Dynamics, L.L.C. (“DDI LLC” or the “Term Loan Borrower”), Fisher, LLC (“Fisher”), Trynex International LLC
(“Trynex”), Henderson Enterprises Group, Inc. (“Enterprises”), Henderson Products, Inc. (“Products”), and Dejana Truck &
Utility Equipment Company, LLC (“Dejana”, together with DDI LLC, Fisher, Trynex, Enterprises and Products, the
“Revolving Loan Borrowers”, and together with DDI LLC in its capacity as the Term Loan Borrower, the “Borrowers”), as
borrowers, entered into a Credit Agreement (following such time as it was amended by the Amendment No. 1 (as defined
below), the “Credit Agreement”) with the banks and financial institutions listed in the Credit Agreement, as lenders,
JPMorgan Chase Bank, N.A., as administrative agent, J.P. Morgan Chase Bank, N.A. and CIBC Bank USA, as joint lead
arrangers and joint bookrunners, CIBC Bank USA, as syndication agent, and Bank of America, N.A. and Citizens Bank,
N.A., as co-documentation agents.

The Credit Agreement provides for a senior secured term loan to the Term Loan Borrower in the amount of $225.0
million and a senior secured revolving credit facility available to the Revolving Loan Borrowers in the amount of $100.0
million, of which $10.0 million will be available in the form of letters of credit and $15.0 million will be available for the
issuance of short-term swingline loans. The Credit Agreement also allows the Revolving Loan Borrowers to request increases
to the revolving commitments and/or incremental term loans in an aggregate amount not in excess of $175.0 million (the
“Revolving Commitment Increase Option”), subject to specified terms and conditions. The final maturity date of the Credit
Agreement is June 9, 2026.

On January 5, 2023, the Company entered into that certain Amendment No. 1 to Credit Agreement and Revolving
Credit Commitment Increase Supplement (“Amendment No. 1”) by and among the Company, the Borrowers, the financial
institutions listed in Amendment No. 1 as lenders, and JPMorgan Chase Bank, N.A., as administrative agent, which amended
the Credit Agreement and pursuant to which, among other things, (i) the Revolving Loan Borrowers exercised a portion of
the Revolving Commitment Increase Option and increased the revolving commitment under the Credit Agreement by $50.0
million for a total of $150.0 million in the aggregate and (ii) the London Interbank Offered Rate pricing option under the
Credit Agreement was replaced with a Term SOFR Rate pricing option. On July 11, 2023, the Company entered into
Amendment No. 2 to the Credit Agreement, which allows the Company to take out loans of up to $1.0 million against its
corporate-owned life insurance policies.

36
On January 29, 2024, the Company entered into Amendment No. 3 to the Credit Agreement, which modified the
minimum required Leverage Ratio (as defined in the Credit Agreement) of the Company, which is measured as of the last
day of each Reference Period (as defined in the Credit Agreement), from 3.50 to 1.00 for each Reference Period to (i) 3.50
to 1.00 for each Reference Period ending on or prior to September 30, 2023, (ii) 4.25 to 1.00 for the Reference Period ending
on December 31, 2023, (iii) 4.00 to 1.00 for each Reference Period ending on March 31, 2024 and June 30, 2024, and (iv)
3.50 to 1.00 for each Reference Period ending on September 30, 2024 and thereafter.

Pursuant to Amendment No. 1, the Credit Agreement provides that the senior secured term loan facility will bear
interest at (i) the Term SOFR Rate for the applicable interest period plus (ii) a margin ranging from 1.375% to 2.00%,
depending on DDI LLC’s Leverage Ratio. The Credit Agreement provides that the Revolving Loan Borrowers have the
option to select whether the senior secured revolving credit facility borrowings will bear interest at either (i)(a) the Term
SOFR Rate for the applicable interest period plus (b) 0.10% plus (c) a margin ranging from 1.375% to 2.00%, depending on
DDI LLC’s Leverage Ratio, or (ii) a margin ranging from 0.375% to 1.00% per annum, depending on DDI LLC’s Leverage
Ratio, plus the greatest of (which if the following would be less than 1.00%, such rate shall be deemed to be 1.00%) (a) the
Prime Rate (as defined in the Credit Agreement) in effect on such day, (b) the NYFRB Rate (as defined in the Credit
Agreement) plus 0.50% and (c) the Term SOFR Rate for a one month interest plus 0.10% (the “Adjusted Term SOFR Rate”).
If the Adjusted Term SOFR Rate for the applicable interest period is less than zero, such rate shall be deemed to be zero for
purposes of calculating the foregoing interest rates in the Credit Agreement.

Cash Flow Analysis

Set forth below is summary cash flow information for each of the years ended December 31, 2022, 2023 and 2024.

Year ended December 31,

Cash Flows (in thousands)

2022

2023

2024

Net cash provided by operating activities ................................... $
40,030 $
12,469 $
41,131
Net cash provided by (used in) investing activities .....................
(12,047)
(10,521 )
56,792
Net cash provided by (used in) financing activities ....................
(44,277)
1,538
(116,960)

Increase (Decrease) in cash ......................................................... $
(16,294) $
3,486 $
(19,037)

Sources and Uses of Cash

During the three-year periods described above, net cash provided by operating activities was used for funding capital
investment, paying dividends, paying interest on our senior credit facilities, and funding working capital requirements during
our pre-season shipping period.

The following table shows our cash and cash equivalents and inventories at December 31, 2022, 2023 and 2024.

December 31,

2022

2023

2024

(in thousands)

Cash and cash equivalents .................................................................. $
20,670 $
24,156 $
5,119
Accounts receivable, net .....................................................................
86,765
83,760
87,407
Inventories ..........................................................................................
136,501
140,390
137,034

Year Ended December 31, 2024 Compared to Year Ended December 31, 2023

We had cash and cash equivalents of $5.1 million at December 31, 2024 compared to cash and cash equivalents of
$24.2 million at December 31, 2023. The table below sets forth a summary of the significant sources and uses of cash for the
periods presented.

Year ended December 31,

Cash Flows (in thousands)

2023

2024

Change

Net cash provided by operating activities ............................. $
12,469 $
41,131 $
28,662
229.9%
Net cash provided by (used in) investing activities ...............
(10,521)
56,792
67,313
639.8%
Net cash provided by (used in) financing activities ..............
1,538
(116,960)
(118,498)
(7704.7%)

Increase (Decrease) in cash ................................................... $
3,486 $
(19,037) $
(22,523)
(646.1%)

37
Net cash provided by operating activities increased $28.7 million from the year ended December 31, 2023 to the
year ended December 31, 2024. The increase in cash provided by operating activities was due to $45.3 million in
favorable working capital changes and changes in operating assets and liabilities in the year ended December 31, 2024,
somewhat
offset
by a
$16.6 million
decrease in
net
income adjusted
for
reconciling
items.
The
largest
driver positively impacting working capital was a decrease in cash used in accounts payable related to the timing of supplier
payments, as well as a decrease in income tax receivable, an increase in accrued wages, benefits and incentives, and a decrease
in cash used for inventory related reduced inventory levels in 2024.

Net cash provided by investing activities increased $67.3 million for the year ended December 31, 2024, compared
to the corresponding period in 2023 due to gross proceeds on the sale leaseback transaction of $64.2 million, as well as a
decrease in capital expenditures.

Net cash used in financing activities increased $118.5 million for the year ended December 31, 2024 as compared
to the corresponding period in 2023. The increase in cash used was primarily due to having $0.0 million in revolver
borrowings outstanding at December 31, 2024, compared to $47.0 million outstanding at December 31, 2023. See Note 8 to
the Consolidated Financial Statements for additional information. In addition, the increase in cash used in financing activities
is related to a $42.0 million voluntary pre-payment of debt amortization principal payments in 2024 using a portion of
the proceeds from the sale leaseback transaction, in comparison to a $10.0 million repayment of long-term debt related to a
voluntary pre-payment of debt amortization principal payments in 2023, see Note 8 to the Consolidated Financial Statements
for additional information.

Non-GAAP Financial Measures

This Annual Report on Form 10-K contains financial information calculated other than in accordance with U.S.
generally accepted accounting principles (“GAAP”).

These non-GAAP measures include:

●
Free cash flow; and

●
Adjusted EBITDA; and

●
Adjusted net income and earnings per share.

These non-GAAP disclosures should not be construed as an alternative to the reported results determined in
accordance with GAAP.

38
Net cash provided by operating activities was $41.1 million in the year ended December 31, 2024 as compared to
$12.5 million in the year ended December 31, 2023. Free cash flow (as defined below) for the year ended December 31, 2024
was $33.3 million compared to $1.9 million in 2023, an increase in free cash flow of $31.4 million, or 1652.6%. The
increase in free cash flow is primarily a result of an increase in cash provided by operating activities of $28.7 million and a
decrease in capital expenditures of $2.7 million, as discussed above under “Liquidity and Capital Resources.” Free cash flow
for the year ended December 31, 2023 was $1.9 million compared to $28.0 million in 2022, a decrease in free cash flow of
$26.1 million, or 93.2%. The decrease in free cash flow is primarily a result of a decrease in cash provided by operating
activities of $27.6 million and a decrease in capital expenditures of $1.5 million

Free cash flow is a non-GAAP financial measure, which we define as net cash provided by operating activities less
capital expenditures. Free cash flow should be evaluated in addition to, and not considered a substitute for, other financial
measures such as net income and cash flow provided by operations. We believe that free cash flow provides investors with a
useful tool to evaluate our ability to generate additional cash flow from our business operations.

The following table reconciles net cash provided by operating activities, a GAAP measure, to free cash flow, a
non-GAAP measure.

For the year ended December 31,

2022

2023

2024

(in thousands)

Net cash provided by operating activities ........................................... $
40,030 $
12,469 $
41,131
Acquisition of property and equipment ..............................................
(12,047)
(10,521 )
(7,810)
Free cash flow .................................................................................... $
27,983 $
1,948 $
33,321

Adjusted EBITDA represents net income (loss) before interest, taxes, depreciation and amortization, as further
adjusted for certain charges consisting of unrelated legal and consulting fees, stock based compensation, severance,
restructuring charges, loss on disposal of fixed assets related to facility relocations, certain non-cash purchase accounting
expenses, impairment charges, CEO transition costs, insurance proceeds, gain on sale leaseback transaction and related costs,
expenses related to debt modifications, loss on extinguishment of debt, and in 2020 through 2022, incremental costs related
to the COVID-19 pandemic. Such COVID-19 related costs included increased expenses directly related to the pandemic, and
did not include either production related overhead inefficiencies or lost or deferred sales. We believe these costs were out of
the ordinary, unrelated to our business and not representative of our results. We use, and we believe our investors benefit
from the presentation of Adjusted EBITDA in evaluating our operating performance because it provides us and our investors
with additional tools to compare our operating performance on a consistent basis by removing the impact of certain items
that management believes do not directly reflect our core operations. In addition, we believe that Adjusted EBITDA is useful
to investors and other external users of our consolidated financial statements in evaluating our operating performance as
compared to that of other companies, because it allows them to measure a company’s operating performance without regard
to items such as interest expense, taxes, depreciation and amortization, which can vary substantially from company to
company depending upon accounting methods and book value of assets and liabilities, capital structure and the method by
which assets were acquired. Our management also uses Adjusted EBITDA for planning purposes, including the preparation
of our annual operating budget and financial projections. Management also uses Adjusted EBITDA to evaluate our ability to
make certain payments, including dividends, in compliance with our senior credit facilities, which is determined based on a
calculation of “Consolidated Adjusted EBITDA” that is substantially similar to Adjusted EBITDA.

Adjusted EBITDA has limitations as an analytical tool. As a result, you should not consider it in isolation, or as a
substitute for net income, operating income, cash flow from operating activities or any other measure of financial performance
or liquidity presented in accordance with GAAP. Some of these limitations are:

●
Adjusted EBITDA does not reflect our cash expenditures or future requirements for capital expenditures or
contractual commitments;

●
Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs;

●
Adjusted EBITDA does not reflect the interest expense, or the cash requirements necessary to service interest
or principal payments, on our indebtedness;

●
Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will
often have to be replaced in the future, and Adjusted EBITDA does not reflect any cash requirements for such
replacements;

●
Other companies, including other companies in our industry, may calculate Adjusted EBITDA differently than
we do, limiting its usefulness as a comparative measure; and

●
Adjusted EBITDA does not reflect tax obligations whether current or deferred.

Adjusted EBITDA for the year ended December 31, 2024 was $79.3 million compared to $68.1 million in 2023, an
increase of $11.2 million, or 16.4%. Adjusted EBITDA for the year ended December 31, 2023 was $68.1 million compared
to $86.8 million in 2022, a decrease of $18.7 million, or 21.5%. In addition to the specific changes resulting from the
adjustments, the changes to Adjusted EBITDA for the periods discussed resulted from factors discussed above under “—
Results of Operations.”

The following table presents a reconciliation of net income (loss), the most comparable GAAP financial measure,
to Adjusted EBITDA, for each of the periods indicated.

For the year ended December 31,

2020

2021

2022

2023

2024

(in thousands)

Net income (loss) ................................................. $
(86,553) $
30,691 $
38,609 $
23,723 $
56,151

Interest expense—net ........................................
20,238
11,839
11,253
15,675
15,260
Income tax expense (benefit) ............................
(12,276)
3,897
8,752
5,511
17,740
Depreciation expense ........................................
8,806
9,634
10,418
11,142
10,370
Amortization .....................................................
10,931
10,682
10,520
10,520
7,520
EBITDA ...............................................................
(58,854)
66,743
79,552
66,571
107,041
Purchase accounting (1) ....................................
(2,017)
-
-
-
-
Stock based compensation ................................
2,830
5,794
6,730
953
4,860
Restructuring and severance costs ....................
-
-
-
-
1,997
Impairment charges (2) .....................................
127,872
1,211
-
-
1,224
Gain on sale leaseback transaction ...................
-
-
-
-
(42,298)
Sale leaseback transaction fees .........................
-
-
-
-
5,257
Debt modification expense ...............................
3,542
-
-
-
-
Loss on extinguishment of debt ........................
-
4,936
-
-
-
COVID-19 (3) ...................................................
1,391
82
48
-
-
Other charges (4) ..............................................
128
770
450
598
1,268
Adjusted EBITDA ................................................ $
74,892 $
79,536 $
86,780 $
68,122 $
79,349

(1) Reflects $17 in reversal of earnout compensation related to Henderson, and $2,000 in reversal of earnout compensation
related to Dejana, in the year ended December 31, 2020.

(2) Reflects impairment charges taken on certain internally developed software in the year ended December 31,
2024. Reflects impairment charges on operating lease right of use assets in the year ended December 31, 2021. Reflects
goodwill impairment charges in the year ended December 31, 2020.

(3) Reflects incremental costs incurred related to the COVID-19 pandemic for the periods presented. Such COVID-19 related
costs include increased expenses directly related to the pandemic, and do not include either production related overhead
inefficiencies or lost or deferred sales.

(4) Reflects expenses and accrual reversals for one time, unrelated legal, and consulting fees, insurance proceeds, CEO
transition costs, and loss on disposal of fixed assets related to facility relocation for the periods presented.

40
The following table presents Adjusted EBITDA by segment for the years ended December 31, 2023 and 2024.

For the year ended
December 31,

2023

2024

Adjusted EBITDA

Work Truck Attachments ................................................................................................ $
50,563 $
48,455
Work Truck Solutions .....................................................................................................
17,559
30,894

$
68,122 $
79,349

Adjusted EBITDA at our Work Truck Attachment segment was $48.5 million for the year ended December 31, 2024
compared to $50.6 million in the year ended December 31, 2023, a decrease of $2.1 million primarily due to low snowfall in
our core markets, as well as the impact of multiple years of below average snowfall, leading to lower volumes in 2024. The
most recent snow season ended March 2024 was approximately 32.9% below the 10-year average.

Adjusted EBITDA at our Work Truck Solutions segment was $30.9 million for the year ended December 31, 2024
compared to $17.6 million in the year ended December 31, 2023, an increase of $13.3 million due to improved volumes
and price increase realization, as well as improved efficiencies.

Adjusted Net Income and Adjusted Earnings Per Share (calculated on a diluted basis) represents net income (loss)
and earnings (loss) per share (as defined by GAAP), excluding the impact of stock based compensation, severance,
restructuring charges, loss on disposal of fixed assets related to facility relocations, non-cash purchase accounting
adjustments, certain charges related to unrelated legal fees and consulting fees, CEO transition costs, insurance proceeds,
gain on sale leaseback transaction and related transaction costs, expenses related to debt modifications, loss on extinguishment
of debt, incremental costs incurred in 2020 through 2022 related to the COVID-19 pandemic, and adjustments on derivatives
not classified as hedges, net of their income tax impact. Such COVID-19 related costs included increased expenses directly
related to the pandemic, and did not include either production related overhead inefficiencies or lost or deferred sales. We
believe these costs were out of the ordinary, unrelated to our business and not representative of our results. Adjustments on
derivatives not classified as hedges are non-cash and are related to overall financial market conditions; therefore, management
believes such costs are unrelated to our business and are not representative of our results. Management believes that Adjusted
Net Income and Adjusted Earnings Per Share are useful in assessing our financial performance by eliminating expenses and
income that are not reflective of the underlying business performance. We believe that the presentation of Adjusted Net
Income for the periods presented allows investors to make meaningful comparisons of our operating performance between
periods and to view our business from the same perspective as our management. Because the excluded items are not
predictable or consistent, management does not consider them when evaluating our performance or when making decisions
regarding allocation of resources.

For the year ended December 31,

2020

2021

2022

2023

2024

(in thousands, except share and per share amounts)

Net income (loss) (GAAP) ................................. $
(86,553) $
30,691 $
38,609 $
23,723 $
56,151
Adjustments:

- Purchase accounting (1) ...............................
(2,017)
-
-
-
-
- Stock based compensation ............................
2,830
5,794
6,730
953
4,860
- Restructuring and severance costs ................
-
-
-
-
1,997
- Impairment charges (2) .................................
127,872
1,211
-
-
1,224
- Gain on sale leaseback transaction ...............
-
-
-
-
(42,298 )
- Sale leaseback transaction fees .....................
-
-
-
-
5,257
- Debt modification expense ...........................
3,542
-
-
-
-
- Loss on extinguishment of debt ....................
-
4,936
-
-
-
- COVID-19 (3) ..............................................
1,391
82
48
-
-
- Adjustments on derivative not classified
as hedge (4) .................................................
2,854
(1,192)
(688)
(688)
(287 )
- Other charges (5) ..........................................
128
770
450
598
1,268
Tax effect on adjustments ...............................
(22,200)
(2,900)
(1,635)
(216)
6,995

Adjusted net income (non-GAAP) ..................... $
27,847 $
39,392 $
43,514 $
24,370 $
35,167

Weighted average common shares
outstanding assuming dilution ........................ 22,872,032 22,964,732 22,916,824 22,962,591 23,509,976

Adjusted earnings per common share -
dilutive (non-GAAP) ...................................... $
1.18 $
1.67 $
1.84 $
1.01 $
1.47

GAAP diluted earnings (loss) per share ............. $
(3.81) $
1.29 $
1.63 $
0.98 $
2.36
Adjustments net of income taxes:

- Purchase accounting (1) ...............................
(0.07)
-
-
-
-
- Stock based compensation ............................
0.09
0.20
0.21
0.03
0.16
- Restructuring and severance costs ................
-
-
-
-
0.06
- Impairment charges (2) .................................
4.72
0.04
-
-
0.04
- Gain on sale leaseback transaction ...............
-
-
-
-
(1.35 )
- Sale leaseback transaction fees .....................
-
-
-
-
0.17
- Debt modification expense ...........................
0.10
-
-
-
-
- Loss on extinguishment of debt ....................
-
0.16
-
-
-
- COVID-19 (3) ..............................................
0.05
-
-
-
-
- Adjustments on derivative not classified
as hedge (4) .................................................
0.09
(0.04)
(0.02)
(0.02)
(0.01 )
- Other charges (5) ..........................................
0.01
0.02
0.02
0.02
0.04

Adjusted earnings per common share -
dilutive (non-GAAP) ...................................... $
1.18 $
1.67 $
1.84 $
1.01 $
1.47

(1) Reflects $17 in reversal of earnout compensation related to Henderson, and $2,000 in reversal of earnout compensation
related to Dejana in the year ended December 31, 2020.

(2) Reflects impairment charges taken on certain internally developed software in the year ended December 31, 2024.
Reflects impairment charges on operating lease right of use assets in the year ended December 31, 2021. Reflects
goodwill impairment charges in the year ended December 31, 2020.

(4) Reflects non-cash mark-to-market and amortization adjustments on an interest rate swap not classified as a hedge for the
periods presented.

(5) Reflects expenses and accrual reversals for one time, unrelated legal, and consulting fees, insurance proceeds, CEO
transition costs, and loss on disposal of fixed assets related to facility relocation for the periods presented.

42
Future Obligations and Commitments

Contractual Obligations

We are subject to certain contractual obligations, including long-term debt and related interest. We have net
unrecognized tax benefits of $1.5 million as of December 31, 2024. However, we cannot make a reasonably reliable estimate
of the period of potential cash settlement of the underlying liabilities; therefore, we have not included unrecognized tax
benefits in calculating the obligations set forth in the following table of significant contractual obligations as of December
31, 2024.

(Dollars in thousands)

Total

Less than
1 year
1 - 3 years 3 - 5 years
More than
5 years

Long-term debt (1) ............................ $
147,526 $
- $
147,526 $
- $
-
Operating leases - third parties (2) ....
110,804
12,159
19,777
15,004
63,864
Interest on long-term debt (3) ............
14,389
9,593
4,796
-
-

Total contracted cash obligations ...... $
272,719 $
21,752 $
172,099 $
15,004 $
63,864

(1) Long-term debt obligation is presented net of discount of $0.2 million at December 31, 2024.

(2) Relates to real estate and equipment operating leases with third parties, including five operating leases for Work Truck
Attachments manufacturing locations, seven operating leases for Henderson manufacturing and upfit and service center
locations, and eleven operating leases for Dejana locations.

(3) Assumes all debt will remain outstanding until maturity. Interest payments were calculated using interest rates in effect
as of December 31, 2024.

Senior Credit Facilities

See Note 8 to the Audited Consolidated Financial Statements included elsewhere in this Annual Report on Form
10-K for a description of our senior credit facilities and other debt.

Deductibility of Intangible and Goodwill Expense

We possess a favorable tax structure where annual tax-deductible intangible and goodwill amortization expense may
be utilized in the event we have sufficient taxable income to utilize such benefit. As we have previously acquired businesses
possessing significant intangible assets and goodwill, we have created a favorable tax structure where income tax expense is
greater than book amortization expense. We expect the deductibility of intangible assets and goodwill amortization expense
to exceed book by approximately $5.7 million in the year ended December 31, 2025 if we have the taxable income to utilize
such benefit.

43
Impact of Inflation

Inflation in materials, freight and labor had a material impact on our profitability in 2023 and 2024, and we expect
ongoing inflationary pressures may impact our profitability in 2025. While we anticipate being able to fully cover this
inflation by raising prices, there may be a timing difference of when we incur the increased costs and when we realize the
higher prices in our backlog. In 2024 and in previous years, we experienced significant increases in steel costs, but were able
or expect to be able to mitigate the effects of these increases through both temporary and permanent steel surcharges; we
expect, but cannot be certain, that we will be able to do the same going forward. See “Risk Factors— The price of steel, a
commodity necessary to manufacture our products, is highly variable. If the price of steel increases, our gross margins could
decline”.

Seasonality and Year-To-Year Variability

While our Work Truck Solutions segment has limited seasonality and variability, our Work Truck Attachments
segment is seasonal and also varies from year-to-year. Consequently, our Work Truck Attachments segment results of
operations and financial condition vary from quarter-to-quarter and from year-to-year as well. In addition, because of this
seasonality and variability, our Work Truck Attachments segment results of operations for any quarter may not be indicative
of results of operations that may be achieved for a subsequent quarter or the full year, and may not be similar to results of
operations experienced in prior years.

Sales of our Work Truck Attachments segment products are significantly impacted by the level, timing and location
of snowfall, with sales in any given year and region most heavily influenced by snowfall levels in the prior snow season
(which we consider to begin in October and end in March) in that region. This is due to the fact that end-user demand for our
Work Truck Attachments products is driven primarily by the condition of their snow and ice control equipment, and in the
case of professional snowplowers, by their financial ability to purchase new or replacement snow and ice control equipment,
both of which are significantly affected by snowfall levels. Heavy snowfall during a given winter causes usage of our Work
Truck Attachments products to increase, resulting in greater wear and tear to our products and a shortening of their life cycles,
thereby creating a need for replacement snow and ice control equipment and related parts and accessories. In addition, when
there is a heavy snowfall in a given winter, the increased income our professional snowplowers generate from their
professional snowplow activities provides them with increased purchasing power to purchase replacement snow and ice
control equipment prior to the following winter. To a lesser extent, sales of our Work Truck Attachments products are
influenced by the timing of snowfall in a given winter. Because an early snowfall can be viewed as a sign of a heavy upcoming
snow season, our Work Truck Attachments segment’s end-users may respond to an early snowfall by purchasing replacement
snow and ice control equipment during the current season rather than delaying purchases until after the season is over when
most purchases are typically made by end-users.

We attempt to manage the seasonal impact of snowfall on our Work Truck Attachments segment revenues in part
through our pre-season sales program, which involves actively soliciting and encouraging pre-season distributor orders in the
second and third quarters by offering our distributors a combination of pricing, payment and freight incentives during this
period. These pre-season sales incentives encourage our distributors to re-stock their inventory during the second and third
quarters in anticipation of the peak fourth quarter retail sales period by offering favorable pre-season pricing and payment
deferral until the fourth quarter. As a result, we tend to generate our greatest volume of sales (an average of over two-thirds
over the last ten years) during the second and third quarters, providing us with manufacturing visibility for the remainder of
the year. By contrast, our revenue and operating results tend to be lowest during the first quarter as management believes our
end-users prefer to wait until the beginning of a snow season to purchase new equipment and as our distributors sell off
inventory and wait for our pre-season sales incentive period to re-stock inventory. Fourth quarter sales vary from year-to-year
as they are primarily driven by the level, timing and location of snowfall during the quarter. This is because typically most
of our fourth quarter sales and shipments consist of re-orders by distributors seeking to restock inventory to meet immediate
customer needs caused by snowfall during the winter months.

Our Work Truck Attachments segment revenue and operating results tend to be lowest during the first quarter, during
which period we typically experience negative earnings as the snow season draws to a close. Our Work Truck Attachments
segment first quarter revenue has varied from approximately $19.1 million to approximately $45.8 million between 2019 and
2024. During the last five-year period, net income (loss) during the first quarter has varied from net income of approximately
$1.5 million to a net loss of approximately $13.4 million, with an average net loss of $6.6 million.

44
While our Work Truck Attachments monthly working capital has averaged approximately $54.4 million from 2022
to 2024, because of the seasonality of our sales, we experience seasonality in our working capital needs as well. In the first
quarter we require capital as we are generally required to build our inventory in anticipation of our second and third quarter
sales seasons. During the second and third quarters, our working capital requirements rise as our accounts receivables increase
as a result of the sale and shipment of products ordered through our pre-season sales program and we continue to build
inventory. Working capital requirements peak towards the end of the third quarter (reaching an average peak of approximately
$63.0 million over the prior three years) and then begin to decline through the fourth quarter through a reduction in accounts
receivables (as it is in the fourth quarter that we receive a majority of the payments for previously shipped products).

We also attempt to manage the impact of seasonality and year-to-year variability on our business costs through the
effective management of our assets. See “Business—Our Business Strategy—Aggressive Asset Management and Profit
Focus.” Our asset management and profit focus strategies include:

●
the employment of a highly variable cost structure facilitated by a core group of workers that we supplement
with a temporary workforce as sales volumes dictate, which allows us to adjust costs on an as-needed basis in
response to changing demand;

●
our enterprise-wide lean concept, which allows us to adjust production levels up or down to meet demand;

●
the pre-season order program described above, which incentivizes distributors to place orders prior to the retail
selling season; and

●
a vertically integrated business model.

These asset management and profit focus strategies, among other management tools, allow us to adjust fixed
overhead and selling, general and administrative expenditures to account for the year-to-year variability of our sales volumes.
Management currently estimates that consolidated annual fixed overhead expenses generally range from approximately
$65.0 million in low sales volume years to approximately $80.0 million in high sales volume years. Further, management
currently estimates that consolidated annual sales, general and administrative expenses other than amortization generally
approximate $90.0 million, but can be reduced to approximately $80.0 million to maximize cash flow in low sales volume
years, and can increase to approximately $100.0 million to maintain customer service and responsiveness in high sales volume
years.

Additionally, although modest, our annual capital expenditure requirements, which are normally budgeted around
2-3% of net sales, can be temporarily reduced by up to approximately 40% in response to actual or anticipated decreases in
sales volumes. If we are unsuccessful in our asset management initiatives, the seasonality and year-to-year variability effects
on our business may be compounded and in turn our results of operations and financial condition may suffer.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk

We do not use financial instruments for speculative trading purposes, and do not hold any derivative financial
instruments that could expose us to significant market risk. Our primary market risk exposures are changes in interest rates
and steel price fluctuations.

Interest Rate Risk

We are exposed to market risk primarily from changes in interest rates. Our borrowings, including our term loan and
any revolving borrowings under our senior credit facilities, are at variable rates of interest and expose us to interest rate risk.
In addition, the interest rate on any revolving borrowings is subject to an increase in the interest rate based on our average
daily availability under our revolving credit facility.

45
As of December 31, 2024, we had outstanding borrowings under our term loan of $147.5 million. A hypothetical
interest rate change of 1%, 1.5% and 2% on our term loan would have changed interest incurred for the year ended December
31, 2024 by $0.5 million, $0.7 million and $0.8 million, respectively.

We are party to interest rate swap agreements to reduce our exposure to interest rate volatility. On June 9, 2021, in
conjunction with entering into our Credit Agreement, we re-designated our swap. As a result, the swap will be recorded at
fair value with changes recorded in Accumulated other comprehensive income. The amortization from Accumulated other
comprehensive income into earnings from the previous de-designation has been adjusted as of June 9, 2021 to include the de-
recognition of previously recognized mark-to-market gains and the amortization of the off-market component as of the re-
designation date, and will continue to be recognized through the life of the swap. On May 19, 2022, we entered into an
interest rate swap agreement to further reduce our exposure to interest rate volatility. The interest rate swap has a notional
amount of $125.0 million, effective for the period May 31, 2024 through June 9, 2026. We may have counterparty credit risk
resulting from the interest rate swap, which we monitor on an on-going basis. The risk lies with two global financial
institutions. Under the interest rate swap agreement, we will either receive or make payments on a monthly basis based on
the differential between 2.718% and SOFR. The interest rate swap is accounted for as a cash flow hedge. See Note 8 to
our Consolidated Financial Statements for additional details on our interest rate swap agreements.

The interest rate swaps' positive fair value at December 31, 2024 was $2.3 million, of which $1.7 million and
$0.6 million are included in Prepaid and other current assets and Other long-term assets on the Consolidated Balance Sheet,
respectively.

As of December 31, 2024, we had $0.0 million in outstanding borrowings under our revolving credit facility. A
hypothetical interest rate change of 1%, 1.5% and 2% on our revolving credit facility would have changed interest incurred
for the year ended December 31, 2024 by $0.5 million, $0.8 million and $1.0 million, respectively.

Commodity Price Risk

In the normal course of business, we are exposed to market risk related to our purchase of steel, the primary
commodity upon which our manufacturing depends. While steel is typically available from numerous suppliers, the price of
steel is a commodity subject to fluctuations that apply across broad spectrums of the steel market. If the price of steel
increases, including as a result of tariffs, our variable costs could also increase. While historically we have successfully
mitigated these increased costs through the implementation of either permanent price increases and/or temporary invoice
surcharges, there may be timing differences between when we realize the price increases and incur the increased costs, and
in the future we may not be able to successfully mitigate these costs, which could cause our gross margins to decline. If our
costs for steel were to increase by $1.00 in a period in which we were not able to pass any of this increase onto our customers
and distributors, our gross margins would decline by $1.00 in that period.

On December 17, 2024, we entered into a steel hedging agreement to reduce its exposure to commodity price swings.
The steel hedging instrument has a notional quantity of 3,000 short tons and is effective for the period August 1,
2025 through December 31, 2025, which we expect to be slightly less than half of our exposure during the effective
period. Under the steel hedge agreement, we will make fixed payments of $819 per short ton for the Steel Hot Rolled Coil
(HRC) commodity. The steel hedging instrument is accounted for as a cash flow hedge. The steel hedging
instrument's negative fair value at December 31, 2024 was $0.1 million, which is included in Accrued expenses and other
current liabilities on the Consolidated Balance Sheet.

Item 8. Financial Statements and Supplementary Data

The financial statements are included in this report beginning on page F-2.

Item 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosures

None

46
Item 9A. Controls and Procedures

Disclosure Controls and Procedures

Our management, with the participation of our Interim Chief Executive Officer and Chief Financial Officer, carried
out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (the “Evaluation”)
as of the last day of the period covered by this report.

Based upon the Evaluation, our Interim Chief Executive Officer and Chief Financial Officer concluded that our
disclosure controls and procedures were effective as of December 31, 2024. Disclosure controls and procedures are defined
by Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”) as controls and other
procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit
under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by the SEC’s
rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure
that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated
and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to
allow timely decisions regarding required disclosures.

It should be noted that the design of any system of controls is based in part upon certain assumptions about the
likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all
potential future conditions, regardless of how remote.

Management’s Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting.
Our internal control system was designed to provide reasonable assurance to our management and Board of Directors
regarding the preparation and fair presentation of our published financial statements.

All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems
determined to be effective can provide only reasonable assurance with respect to financial statement preparation and
presentation.

Our management, with the participation of our Interim Chief Executive Officer and Chief Financial Officer,
evaluated the effectiveness of our internal control over financial reporting as of December 31, 2024. In making this
assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway
Commission (“COSO”) in Internal Control—Integrated Framework (2013 framework). Based on its assessment,
management believes that, as of December 31, 2024, our internal control over financial reporting was effective based on
those criteria.

Deloitte & Touche LLP (PCAOB ID No. 34), an independent registered public accounting firm, has audited the
Consolidated Financial Statements included in this Annual Report on Form 10-K and, as part of its audit, has issued an
attestation report, included herein, on the effectiveness of our internal control over financial reporting at December 31, 2024.

Changes in Internal Control Over Financial Reporting

During the last fiscal quarter of the period covered by this report, there were no changes in our internal controls over
financial reporting that have materially affected, or are reasonably likely to materially affect such controls.

Item 9B. Other Information

Rule 10b5-1 Trading Plans

During the three months ended December 31, 2024, no director or officer of the Company adopted or terminated a
"Rule 10b5-1 trading arrangement," or "non-Rule 10b5-1 trading arrangement," as each term is defined in Item 408(a) of
Regulation S-K.

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Not applicable.

47
PART III

Item 10. Directors, Executive Officers and Corporate Governance

The information included under the captions “Election of Directors”, “Corporate Governance”, and "Delinquent
Section 16(a) Reports" in the Company’s definitive proxy statement, which is expected to be filed pursuant to Regulation 14A
within 120 days following the end of the fiscal year covered by this report (the “Proxy Statement”), is hereby incorporated
by reference. The information required by Item 10 with respect to our Executive Officers is included in Part I of this Annual
Report on Form 10-K.

We have adopted a Code of Business Conduct and Ethics that applies to our directors, principal executive officer,
principal financial officer and principal accounting officer, as well as all of our employees. We have posted a copy of the
Code of Business Conduct and Ethics on our website at www.douglasdynamics.com. The Code of Business Conduct and
Ethics is also available in print to any stockholder who requests it in writing from the Corporate Secretary at 11270 W. Park
Place Suite 300, Milwaukee, WI 53224. We intend to post on our website any amendments to, or waivers (with respect to
our principal executive officer, principal financial officer and controller) from, the Code of Business Conduct and Ethics
within four business days of any such amendment or waiver. We are not including the information contained on our website
as part of, or incorporating it by reference into, this report.

Item 11. Executive Compensation

The information required in Item 11 is incorporated by reference to the information in the Proxy Statement under
the captions “Corporate Governance—Compensation Committee Interlocks and Insider Participation,” “Compensation
Discussion and Analysis”, “Executive Compensation,” “Director Compensation” and “Compensation Committee Report.”

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters

The information required in Item 12 is incorporated by reference to the information in the Proxy Statement under
the captions “Ownership of Certain Beneficial Owners and Management—Significant Stockholders” and “—Executive
Officers and Directors.”

Securities Authorized for Issuance under Equity Compensation Plans

The following table sets forth information with respect to compensation plans under which equity securities of the
Company are authorized for issuance as of December 31, 2024.

Equity Compensation Plan Information
Plan Category

Number of
securities to be
issued upon
exercise of
outstanding
options,
warrants and
rights

Weighted -
average exercise
price of
outstanding
options,
warrants and
rights

Number of
securities
remaining
available for
future issuance
under equity
compensation
plans
(excluding
securities
reflected in
column) (1) (2)
Equity Compensation plans approved by security holders:

2010 Stock Incentive Plan: .........................................................
99,998 $
-
-
2024 Stock Incentive Plan: .........................................................
- $
-
882,091
Equity compensation plans not approved by security holders ....
- $
-
-
Total ...........................................................................................
99,998 $
-
882,091

(1) Excludes 144,330 shares of restricted stock previously granted under the 2024 Stock Incentive Plan. Excludes
372,495 shares of restricted stock previously granted under the Amended and Restated 2010 Stock Incentive Plan.

(2) Calculated excluding the 99,998 securities shown as to be issued upon exercise of outstanding options, warrants and
rights under the 2010 Stock Incentive Plan in column (a), which are subject to performance share unit awards and have
no exercise price.

48
Item 13. Certain Relationships and Related Transactions, and Director Independence

The information required in Item 13 is incorporated by reference to the information in the Proxy Statement under
the caption “Corporate Governance.”

Item 14. Principal Accounting Fees and Services

The information required in Item 14 is incorporated by reference to the information in the Proxy Statement under
the caption “Ratification of Appointment of Independent Registered Public Accounting Firm.”

PART IV

Item 15. Exhibits and Financial Statement Schedules

(a) Documents filed as part of this report:

(1) Consolidated Financial Statements:

See “Index to Consolidated Financial Statements” on page F-1, the Report of Independent Registered
Public Accounting Firm on page F-2 through F-4 and the Consolidated Financial Statements beginning on page F-5,
all of which are incorporated herein by reference.

(2) Financial Statement Schedules:

All schedules have been omitted because the information required in these schedules is included in the
Notes to the Consolidated Financial Statements.

(3) Exhibits:

See “Exhibit Index” of this Form 10-K, beginning on the following page.

Item 16. Form 10-K Summary

Not applicable

49
Exhibit Index

Exhibit
Number
Title
2.1
Asset Purchase Agreement, dated May 6, 2013 by and between Acquisition Tango LLC, TrynEx, Inc. and
shareholders of TrynEx, Inc. named therein [Incorporated by reference to Exhibit 2.1 to Douglas Dynamics, Inc.’s
Current Report on Form 8-K filed May 6, 2013 (File No. 001-34728)].
2.2
First Amendment, dated August 6, 2013, to the Asset Purchase Agreement dated May 6, 2013 by and between
TrynEx International LLC, Apex International, Inc. and shareholders of Apex International, Inc. named therein
[Incorporated by reference to Exhibit 2.1 to Douglas Dynamics, Inc.’s Current Report on Form 8-K filed August 5,
2013 (File No. 001-34728)].
2.3
Merger Agreement, dated November 24, 2014, among Douglas Dynamics, Inc., DDIZ Acquisition, Inc., Henderson
Enterprises Group, Inc. and the stockholder representative named therein [Incorporated by reference to Exhibit 2.1 to
Douglas Dynamics, Inc.’s Current Report on Form 8-K filed November 25, 2014 (File No. 001-34728)].
2.4
Asset Purchase Agreement, dated June 15, 2016, among Acquisition Delta LLC, Peter Paul Dejana Family Trust
Dated 12/31/98, Dejana Truck & Utility Equipment Company, Inc. and Andrew Dejana (as Appointed Agent)
[Incorporated by reference to Exhibit 2.1 to Douglas Dynamics, Inc.’s Current Report on Form 8-K filed on June 20,
2016 (File No. 001-34728)].
2.5
First Amendment, dated February 27, 2017, to the Asset Purchase Agreement, dated June 15, 2016, among
Acquisition Delta LLC, Peter Paul Dejana Family Trust Dated 12/31/98, Dejana Truck & Utility Equipment
Company, Inc. and Andrew Dejana (as Appointed Agent) [Incorporated by reference to Exhibit 2.1 to Douglas
Dynamics, Inc.’s Current Report on Form 8-K filed on March 1, 2017 (File No. 001-34728)].
2.6
Second Amendment, dated September 20, 2017, to the Asset Purchase Agreement, dated June 15, 2016 and amended
on February 27, 2017, among Dejana Truck & Utility Equipment Company, LLC (formerly known as Acquisition
Delta LLC), Peter Paul Dejana Family Trust 12/31/98, Peteco Kings Park Inc. (formerly known as Dejana Truck &
Utility Equipment Company, Inc.) and Andrew Dejana, as appointed agent [Incorporated by reference to Exhibit 2.1
to Douglas Dynamics, Inc.’s Current Report on Form 8-K filed on September 26, 2017 (File No. 001-34728)].
3.1
Fourth Amended and Restated Certificate of Incorporation of Douglas Dynamics, Inc. [Incorporated by reference to
Exhibit 3.3 to Douglas Dynamics, Inc.’s Registration Statement on Form S-1 (Registration No. 333-164590)].
3.2
Fourth Amended and Restated Bylaws of Douglas Dynamics, Inc. [Incorporated by reference to Exhibit 3.2 to
Douglas Dynamics, Inc.’s Current Report on Form 8-K filed on January 4, 2019 (File No. 001-34728)].
4.1
Description of Registrant’s Securities [Incorporated by reference to Exhibit 4.1 to Douglas Dynamics, Inc.'s Annual
Report on Form 10-K for the period ending December 31, 2021 (File No. 001-34728)].
10.1
Credit Agreement, dated as of June 9, 2021, among Douglas Dynamics, L.L.C., Fisher, LLC, Trynex International
LLC, Henderson Enterprises Group, Inc., Henderson Products, Inc., and Dejana Truck & Utility Equipment
Company, LLC, Douglas Dynamics, Inc., the banks and financial institutions listed therein, as lenders, JPMorgan
Chase Bank, N.A., as administrative agent, J.P. Morgan Chase Bank, N.A. and CIBC Bank USA, as joint lead
arrangers and joint bookrunners, CIBC Bank USA, as syndication agent, and Bank of America, N.A. and Citizens
Bank, N.A., as co-documentation agents [Incorporated by reference to Exhibit 10.1 to Douglas Dynamics, Inc.’s
Current Report on Form 8-K dated June 9, 2021 (File No. 001-34728)].
10.2
Amendment No. 1 to Credit Agreement and Revolving Credit Commitment Increase Supplement, dated as of January
5, 2023, among Douglas Dynamics, L.L.C., Fisher, LLC, Trynex International LLC, Henderson Enterprises Group,
Inc., Henderson Products, Inc., and Dejana Truck & Utility Equipment Company, LLC, Douglas Dynamics, Inc., the
banks and financial institutions listed therein, as lenders, and JPMorgan Chase Bank, N.A., as administrative agent
(which includes the marked Credit Agreement as Exhibit A thereto) [Incorporated by reference to Exhibit 10.1 to
Douglas Dynamics, Inc.'s Current Report on Form 8-K filed on January 6, 2023 (file No. 001-34728)].
10.3
Amendment No. 2 to Credit Agreement, dated as of July 11, 2023, among Douglas Dynamics, L.L.C., Fisher, LLC,
Trynex International LLC, Henderson Enterprises Group, Inc., Henderson Products, Inc., and Dejana Truck & Utility
Equipment Company, LLC, Douglas Dynamics, Inc., the banks and financial institutions listed therein, as lenders,
and JP Morgan Chase Bank, N.A., as administrative agent (which includes the marked Credit Agreement as Exhibit
A thereto) [Incorporated by reference to Exhibit 10.1 to Douglas Dynamics, Inc.’s Quarterly Report on Form 10-
Q for the quarterly period ended June 30, 2023 (File No. 001-34728)].
10.4
Amendment No. 3 to Credit Agreement and Revolving Credit Commitment Increase Supplement, dated as of January
29, 2024, among Douglas Dynamics, Inc., Douglas Dynamics, L.L.C., Fisher, L.L.C., Trynex International LLC,
Henderson Enterprises Group, Inc., Henderson Products, Inc., Dejana Truck & Utility Equipment Company, LLC,
the banks and financial institutions listed therein, as lenders, and JP Morgan Chase Bank, N.A., as administrative
agent [Incorporated by reference to Exhibit 10.1 to Douglas Dynamics, Inc.'s Current Report on Form 8-K filed on
January 30, 2024 (file No. 001-34728)].
10.5#
Amended and Restated Employment Agreement between Sarah Lauber and Douglas Dynamics, LLC, effective
October 31, 2022 [Incorporated by reference to Exhibit 10.2 to Douglas Dynamics, Inc.’s Quarterly Report on Form
10-Q for the quarterly period ended September 30, 2022 (File No. 001-34728)].

50
Exhibit
Number

Title
10.6# Form of Amended and Restated Deferred Stock Unit Agreement [Incorporated by reference to Exhibit 10.18 to
Douglas Dynamics, Inc.’s Registration Statement on Form S-1/A filed on March 8, 2010 (Registration
No. 333-164590)].
10.7# Douglas Dynamics, Inc. Annual Incentive Plan [Incorporated by reference to Exhibit 10.1 to Douglas Dynamics,
Inc.’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on May 10, 2016 (File No.
001-34728)].
10.8# Douglas Dynamics, Inc. Amended and Restated 2010 Stock Incentive Plan [Incorporated by reference to Appendix A
to Douglas Dynamics, Inc.’s definitive proxy statement filed with the Securities and Exchange Commission on March
27, 2020 (File No. 001-34728)].
10.9# Form of Restricted Stock Agreement under Douglas Dynamics, Inc. 2010 Stock Incentive Plan [Incorporated by
reference to Exhibit 10.33 to Douglas Dynamics, Inc.’s Registration Statement on Form S-1 (Registration
No. 333-164590)].
10.10# Alternative Form of Restricted Stock Agreement under Douglas Dynamics, Inc. 2010 Stock Incentive Plan
[Incorporated by reference to Exhibit 10.34 to Douglas Dynamics, Inc.’s Registration Statement on Form S-1
(Registration No. 333-164590)].
10.11# Form of Restricted Stock Units Agreement under Douglas Dynamics, Inc. 2010 Stock Incentive Plan [Incorporated by
reference to Exhibit 10.35 to Douglas Dynamics, Inc.’s Registration Statement on Form S-1 (Registration
No. 333-164590)].
10.12# Form of Nonqualified Stock Option Agreement under Douglas Dynamics, Inc. 2010 Stock Incentive Plan
[Incorporated by reference to Exhibit 10.36 to Douglas Dynamics, Inc.’s Registration Statement on Form S-1
(Registration No. 333-164590)].
10.13# Form of Incentive Stock Option Agreement under 2010 Stock Incentive Plan [Incorporated by reference to
Exhibit 10.37 to Douglas Dynamics, Inc.’s Registration Statement on Form S-1 (Registration No. 333- 164590)].
10.14# Form of Restricted Stock Grant Notice and Standard Terms and Conditions under the Douglas Dynamics, Inc. 2010
Stock Incentive Plan [Incorporated by reference to Exhibit 10.1 to Douglas Dynamics, Inc.’s Current Report on
Form 8-K filed December 30, 2010 (File No. 001-34728)].
10.15# Form of Restricted Stock Unit Grant Notice and Standard Terms and Conditions under the Douglas Dynamics, Inc.
2010 Stock Incentive Plan [Incorporated by reference to Exhibit 10.2 to Douglas Dynamics, Inc.’s Current Report on
Form 8-K filed December 30, 2010 (File No. 001-34728)].
10.16# Form of Nonemployee Director Restricted Stock Unit Grant Notice and Standard Terms and Conditions under the
Douglas Dynamics, Inc. 2010 Stock Incentive Plan [Incorporated by reference to Exhibit 10.3 to Douglas
Dynamics, Inc.’s Current Report on Form 8-K filed December 30, 2010 (File No. 001-34728)].
10.17# Form of Nonemployee Director Restricted Stock Unit Grant Notice and Standard Terms and Conditions under
Douglas Dynamics, Inc. 2010 Stock Incentive Plan, effective in 2021[Incorporated by reference to Exhibit 10.1 to
Douglas Dynamics, Inc.’s Quarterly Report on Form 10-Q for the Quarterly period Ended June 30, 2021 (File
No. 001-34728)].
10.18# Form of Director and Officer Indemnification Agreement [Incorporated by reference to Exhibit 10.27 to Douglas
Dynamics, Inc.’s Registration Statement on Form S-1/A filed on March 8, 2010 (Registration No. 333-164590)].
10.19# Douglas Dynamics Nonqualified Deferred Compensation Plan [Incorporated by reference to Exhibit 10.34 to Douglas
Dynamics, Inc.’s Annual Report on Form 10-K for the period ending December 31, 2011 (File No. 001-34728)].
10.20# Form of Restricted Stock Unit Agreement under Douglas Dynamics, Inc. 2010 Stock Incentive Plan. [Incorporated by
reference to Exhibit 10.36 to Douglas Dynamics, Inc.’s Annual Report on Form 10-K for the period ending
December 31, 2012 (File No. 001-34728)].
10.21# Form of Performance Share Unit Agreement under Douglas Dynamics, Inc. 2010 Stock Incentive Plan. [Incorporated
by reference to Exhibit 10.37 to Douglas Dynamics, Inc.’s Annual Report on Form 10-K for the period ending
December 31, 2012 (File No. 001-34728)].
10.22# Form of Nonemployee Director Restricted Stock Unit Grant Notice and Standard Terms and Conditions under
Douglas Dynamics, Inc. 2010 Stock Incentive Plan. [Incorporated by reference to Exhibit 10.4 to Douglas
Dynamics, Inc.’s Quarterly Report on Form 10-Q for the Quarterly Period Ended March 31, 2013 (File
No. 001-34728)].

51
Exhibit
Number

Title
10.23# Form of Grant Notice for Performance Share Units under the Douglas Dynamics, Inc. 2010 Stock Incentive Plan,
effective February 19, 2018 [Incorporated by reference to Exhibit 10.41 to Douglas Dynamics, Inc.’s Annual Report
on Form 10-K for the period ending December 31, 2018].
10.24# Form of Grant Notice for Restricted Stock Units under the Douglas Dynamics, Inc. 2010 Stock Incentive Plan,
effective February 19, 2018 [Incorporated by reference to Exhibit 10.42 to Douglas Dynamics, Inc.’s Annual Report
on Form 10-K for the period ending December 31, 2018].
10.25# Amended and Restated Employment Agreement between James L. Janik and Douglas Dynamics, LLC, effective
February 22, 2019 [Incorporated by reference to Exhibit 10.47 to Douglas Dynamics, Inc.’s Annual Report on Form
10-K for the period ending December 31, 2018 (File No. 001-34728)].
10.26# Form of Nonemployee Director Restricted Stock Unit Grant Notice and Standard Terms and Conditions under the
Douglas Dynamics, Inc. 2010 Stock Incentive Plan, effective February 19, 2019 [Incorporated by reference to
Exhibit 10.49 to Douglas Dynamics, Inc.’s Annual Report on Form 10-K for the period ending December 31, 2018
(File No. 001-34728)].
10.27# Amended and Restated Employment Agreement between Linda Evans and Douglas Dynamics, LLC, effective
October 31, 2022 [Incorporated by reference to Exhibit 10.3 to Douglas Dynamics, Inc.’s Quarterly Report on Form
10-Q for the quarterly period ended September 30, 2022 (File No. 001-34728)].
10.28# Employment Agreement between Mark Van Genderen and Douglas Dynamics, LLC, effective January 6, 2023
[Incorporated by reference to Exhibit 10.29 to Douglas Dynamics, Inc.’s Annual Report on Form 10-K for the period
ended December 31, 2022 (File No. 001-34728)].
10.29# Amended and Restated Employment Agreement between Robert McCormick and Douglas Dynamics, LLC, effective
October 31, 2022 [Incorporated by reference to Exhibit 10.29 to Douglas Dynamics, Inc's Annual Report on Form
10-K for the period ended December 31, 2023 (File No. 001-34728)].
10.30# Douglas Dynamics, Inc. 2024 Stock Incentive Plan [Incorporated by reference to Exhibit 10.1 to Douglas Dynamics,
Inc.'s Current Report on Form 8-K filed April 26, 2024 (File No. 001-34728)]
10.31# Form of Restricted Stock Unit Grant Notice and Standard Terms and Conditions under the Douglas Dynamics, Inc.
2024 Stock Incentive Plan [Incorporate by reference to Exhibit 10.2 to Douglas Dynamics, Inc.'s Quarterly Report on
Form 10-Q for the quarterly period ended March 31, 2024 (File No. 001-34728)].
10.32# Form of Performance Share Unit Notice and Standard Terms and Conditions under the Douglas Dynamics, Inc. 2024
Stock Incentive Plan [Incorporate by reference to Exhibit 10.3 to Douglas Dynamics, Inc.'s Quarterly Report on
Form 10-Q for the quarterly period ended March 31, 2024 (File No. 001-34728)].
10.33# Form of Nonemployee Director Restricted Stock Unit Grant Notice and Standard Terms and Conditions under the
Douglas Dynamics, Inc. 2024 Stock Incentive Plan [Incorporate by reference to Exhibit 10.4 to Douglas Dynamics,
Inc.'s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2024 (File No. 001-34728)].
10.34# Retirement and Transition Agreement, dated May 16, 2024, between Douglas Dynamics, LLC and Robert
McCormick [Incorporated by reference to Exhibit 10.1 to Douglas Dynamics, Inc.'s Current Report on Form 8-K
filed May 17, 2024 (File No. 001-34728)].
10.35# Consulting Agreement between Douglas Dynamics, LLC and Glenco International LLC (the consulting entity of
Robert McCormick), effective as of July 9, 2024 [Incorporated by reference to Exhibit 10.2 to Douglas Dynamics,
Inc.'s Current Report on Form 8-K filed May 17, 2024 (File No. 001-34728)].
10.36# Letter Agreement, dated May 16, 2024, amongst Douglas Dynamics, Inc., Douglas Dynamics, LLC and James L.
Janik [Incorporated by reference to Exhibit 10.3 to Douglas Dynamics, Inc.'s Current Report on Form 8-K filed May
17, 2024 (File No. 001-34728)].
10.37# Restricted Stock Unit Grant Notice and Standard Terms and Conditions for grant to James L. Janik, dated May 16,
2024, under the Douglas Dynamics, Inc. 2024 Stock Incentive Plan [Incorporated by reference to Exhibit 10.4
to Douglas Dynamics, Inc.'s Current Report on Form 8-K filed May 17, 2024 (File No. 001-34728)].
10.38# Restricted Stock Unit Grant Notice and Standard Terms and Conditions for grant to Sarah Lauber, dated May 16,
2024, under the Douglas Dynamics, Inc. 2024 Stock Incentive Plan [Incorporated by reference to Exhibit 10.5
to Douglas Dynamics, Inc.'s Current Report on Form 8-K filed May 17, 2024 (File No. 001-34728)].
10.39# Agreement of Purchase and Sale, dated September 10, 2024, among Douglas Dynamics, L.L.C., Henderson
Products, Inc., Trynex International LLC and AGNL Blizzard, L.L.C. [Incorporated by reference to Exhibit 10.1 to
Douglas Dynamics, Inc.'s Current Report on Form 8-K filed September 12, 2024 (File No. 001-34728)].
10.40# Lease Agreement, dated September 10, 2024, between Douglas Dynamics, L.L.C. and AGNL Blizzard,
L.L.C. [Incorporated by reference to Exhibit 10.2 to Douglas Dynamics, Inc.'s Current Report on Form 8-K filed
September 12, 2024 (File No. 001-34728)].
10.41# Separation Agreement, dated December 18, 2024, among Douglas Dynamics, Inc., Douglas Dynamics, LLC and
Linda R. Evans [Incorporated by reference to Exhibit 10.1 to Douglas Dynamics, Inc.’s Current Report on Form 8-K
filed December 20, 2024 (File No. 001-34728)].

52
Exhibit
Number

Title
19.1* Douglas Dynamics, Inc. Insider Trading Policy
21.1* Subsidiaries of Douglas Dynamics, Inc.
23.1* Consent of Deloitte & Touche LLP.
31.1* Certification of the Company’s Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2* Certification of the Company’s Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1* Certification of the Company’s Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
97.1 Compensation Recovery Policy, effective October 2, 2023 [Incorporated by reference to Exhibit 97.1 to Douglas
Dynamics, Inc's Annual Report on Form 10-K for the period ended December 31, 2024 (File No. 001-34728)].
99.1 Proxy Statement for the 2025 Annual Meeting of Stockholders [To be filed with the Securities and Exchange
Commission under Regulation 14A within 120 days after December 31, 2024; except to the extent specifically
incorporated by reference, the Proxy Statement for the 2025 Annual Meeting of Stockholders shall not be deemed to
be filed with the Securities and Exchange Commission as part of this Annual Report on Form 10-K]

101.INS* Inline XBRL Instance Document
101.SCH* Inline XBRL Taxonomy Extension Schema
101.CAL* Inline XBRL Taxonomy Extension Calculation Linkbase
101.DEF* Inline XBRL Taxonomy Extension Definition Linkbase
101.LAB* Inline XBRL Taxonomy Extension Label Linkbase
101.PRE* Inline XBRL Taxonomy Extension Presentation Linkbase
104* Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101)

#
A management contract or compensatory plan or arrangement.

*
Filed herewith.

53
Signature

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on this 25th day of
February, 2025.

DOUGLAS DYNAMICS, INC.

By: /s/ JAMES L. JANIK

James L. Janik
Interim President and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the
following persons on behalf of the Registrant and in the capacities indicated on February 25, 2025.

/s/ JAMES L. JANIK
Interim President and Chief Executive Officer
James L. Janik
(Principal Executive Officer) and Chairman

/s/ SARAH LAUBER
Executive Vice President, Chief Financial Officer &
Secretary
Sarah Lauber
(Principal Financial Officer)

/s/ JON J. SISULAK
Vice President, Corporate Controller and Treasurer
Jon J. Sisulak
(Controller)

/s/ JOHER AKOLAWALA
Director
Joher Akolawala

/s/ LISA R. BACUS
Director
Lisa R. Bacus

/s/ MARGARET S. DANO
Director
Margaret S. Dano

/s/ KENNETH W. KRUEGER
Director
Kenneth W. Krueger

/s/ DONALD W. STURDIVANT
Director
Donald W. Sturdivant

F-1
Index to Consolidated Financial Statements

Page
Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm ............................................................................................
F-2
Consolidated Balance Sheets ...........................................................................................................................................
F-6
Consolidated Statements of Income .................................................................................................................................
F-7
Consolidated Statements of Comprehensive Income .......................................................................................................
F-8
Consolidated Statements of Changes in Shareholders’ Equity ........................................................................................
F-9
Consolidated Statements of Cash Flows .......................................................................................................................... F-10
Notes to Consolidated Financial Statements .................................................................................................................... F-11

F-2
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the shareholders and the Board of Directors of Douglas Dynamics, Inc.

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of Douglas Dynamics, Inc. and subsidiaries (the
"Company") as of December 31, 2024 and 2023, the related consolidated statements of income and comprehensive income,
changes in shareholders' equity, and cash flows, for each of the three years in the period ended December 31, 2024, and the
related notes (collectively referred to as the "financial statements"). We also have audited the Company’s internal control
over financial reporting as of December 31, 2024, based on criteria established in Internal Control — Integrated
Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the
Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years
in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of
America. Also, in our opinion, the Company maintained, in all material respects, effective internal control over financial
reporting as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework (2013)
issued by COSO.

Basis for Opinions

The Company’s management is responsible for these financial statements, for maintaining effective internal control over
financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the
accompanying Management's Report on Internal Control Over Financial Reporting. Our responsibility is to express an
opinion on these financial statements and an opinion on the Company’s internal control over financial reporting based on
our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United
States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal
securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement,
whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material
respects.

Our audits of the financial statements included performing procedures to assess the risks of material misstatement of the
financial statements, whether due to error or fraud, and performing procedures to respond to those risks. Such procedures
included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits
also included evaluating the accounting principles used and significant estimates made by management, as well as
evaluating the overall presentation of the financial statements. Our audit of internal control over financial reporting
included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness
exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our
audits also included performing such other procedures as we considered necessary in the circumstances. We believe that
our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and
procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the
transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded
as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and
that receipts and expenditures of the company are being made only in accordance with authorizations of management and
directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

F-3
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current-period audit of the financial statements
that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or
disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex
judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements,
taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the
critical audit matters or on the accounts or disclosures to which they relate.

Indefinite Lived Intangible Tradename– Dejana– Refer to Notes 2 and 7 to the Financial Statements

Critical Audit Matter Description

The Company tests the Dejana indefinite lived intangible tradename for impairment annually or whenever events or
changes in circumstances indicate the carrying value may not be recoverable by comparing the fair value of the indefinite
lived tradename to its carrying value. The Company determines the fair value of the indefinite lived tradename using the
relief from royalty method. The significant assumptions used in the determination of the fair value include revenue
attributable to the asset, royalty rate and the discount rate, reflecting the risks inherent in the future cash flow stream.
Changes in these assumptions could have significant impacts on the fair value of the indefinite lived intangible amount, and
the amount of an impairment charge, if any. The Dejana indefinite lived intangible balance was $14 million as of December
31, 2024. The fair value of the Dejana indefinite lived intangible tradename exceeded the carrying value as of the
measurement date and, therefore, no impairment was recognized.

The significant estimates and assumptions management makes to estimate the fair value and the sensitivity of Dejana
operations to the near-term business disruption from supply chain constraints and chassis availability required a high degree
of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to forecasts of future revenue growth, and the selection of royalty and discount rates for the
Dejana indefinite lived tradename included the following, among others:

●
We tested the effectiveness of internal controls over the indefinite lived intangible tradename, including those
related to management’s revenue growth assumptions as well as the selection of the royalty and discount rates.

●
We evaluated management’s ability to accurately forecast revenue by performing a retrospective review of prior
forecasts compared to actual results.

F-4

●
We evaluated the reasonableness of management’s forecasts, including the impact of near-term business disruption
from supply chain constraints and rising costs, by comparing the forecasts to (1) historical results, (2) internal
communications to management and the Board of Directors, and (3) forecasted information included in analyst
and industry reports of the Company.

●
With the assistance of our fair value specialists, we evaluated the fair value methodology, the royalty rate and the
discount rate, including testing the underlying source information and the mathematical accuracy of the
calculations. Specific to the discount rate, we considered the inputs and calculations, and we developed a range of
independent estimates and compared those to the discount rate selected by management. Specific to the royalty
rate, we considered the external information used in developing management’s estimate, and we developed a range
of independent estimates which we compared to the royalty rate selected by management.

Sale Leaseback Transaction – Refer to Notes 2 and 6 to the Financial Statements

Critical Audit Matter Description

As described in Note 6 to the Company’s consolidated financial statements, the Company entered into a sale leaseback
transaction involving seven properties with an unrelated third party during the year ended December 31, 2024. The
Company determined that the transaction qualified as sale leaseback transaction in accordance with Accounting Standards
Codification (“ASC”) Topic 842, Leases.

We identified management’s evaluation of whether the sale leaseback transaction transferred control, was recognized
timely, and at fair value, as a critical audit matter. Management applies judgment in assessing relevant lease terms,
provisions, and other conditions, including repurchase rights, included in the Company’s sale and leaseback agreement to
determine whether or not the control of the real estate property has transferred from the Company, the timing of the
transaction, and the determination of fair value. Auditing these assessments made by management involved challenging
auditor judgment due to the extent of specialized skills or knowledge required.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the sale leaseback transaction included the following, among others:

●
We tested the effectiveness of controls over the accounting for sale leaseback transactions, including controls over
(a) management’s determination of fair value of the property and (b) the application of ASC 606 to determine
whether a sale has occurred and ASC 842 to determine the classification of the lease.

●
Assessed management’s application of ASC Topic 842 and evaluated relevant lease terms, provisions and other
conditions included in the Company’s sale leaseback agreement to assess the appropriateness of the conclusion
that a transfer of control has occurred.

F-5

●
Evaluated whether the Company appropriately accounted for the sale by recognizing the transaction price for the
sale of the properties at the time control is transferred to the third party, derecognizing the carrying amount of the
assets, and accounting for the lease in accordance with ASC Topic 842.

●
Utilized professionals with specialized skills and knowledge in valuation to assist with assessing whether the fair
value of the properties was appropriately recorded for the sale leaseback.

●
Recalculated the operating lease right-of-use asset and liability based on the terms of the agreement and calculated
incremental borrowing rate.

/s/ DELOITTE & TOUCHE LLP

Milwaukee, Wisconsin
February 25, 2025

We have served as the Company's auditor since 2017.

F-6
DOUGLAS DYNAMICS, INC.
CONSOLIDATED BALANCE SHEETS
(Dollars In Thousands, Except Per Share Data)

December 31, December 31,

2024

2023

Assets

Current assets:

Cash and cash equivalents ........................................................................................... $
5,119 $
24,156
Accounts receivable, net ..............................................................................................
87,407
83,760
Inventories ...................................................................................................................
137,034
140,390
Inventories - truck chassis floor plan ...........................................................................
2,612
2,217
Refundable income taxes paid .....................................................................................
-
4,817
Prepaid and other current assets ...................................................................................
6,053
6,898
Total current assets ..........................................................................................................
238,225
262,238
Property, plant and equipment, net ..................................................................................
41,311
67,340
Goodwill ..........................................................................................................................
113,134
113,134
Other intangible assets, net ..............................................................................................
113,550
121,070
Operating leases - right of use asset ................................................................................
70,801
18,008
Non-qualified benefit plan assets ....................................................................................
10,482
9,195
Other long-term assets .....................................................................................................
2,480
2,433
Total assets ...................................................................................................................... $
589,983 $
593,418

Liabilities and shareholders' equity

Current liabilities:

Accounts payable ......................................................................................................... $
32,319 $
31,374
Accrued expenses and other current liabilities ............................................................
26,182
25,817
Floor plan obligations ..................................................................................................
2,612
2,217
Operating lease liability - current ................................................................................
7,394
5,347
Income tax payable ......................................................................................................
1,685
-
Short-term borrowings .................................................................................................
-
47,000
Current portion of long-term debt ................................................................................
-
6,762
Total current liabilities ....................................................................................................
70,192
118,517
Retiree benefits and deferred compensation ....................................................................
13,616
13,922
Deferred income taxes .....................................................................................................
24,574
27,903
Long-term debt, less current portion ...............................................................................
146,679
181,491
Operating lease liability - noncurrent ..............................................................................
64,785
13,887
Other long-term liabilities ...............................................................................................
5,922
6,133
Commitments and contingencies (Note 15)

Shareholders' equity:

Common Stock, par value $0.01, 200,000,000 shares authorized, 23,094,047 and
22,983,965 shares issued and outstanding at December 31, 2024 and December
31, 2023, respectively ..............................................................................................
231
230
Additional paid-in capital ............................................................................................
170,092
165,233
Retained earnings .........................................................................................................
88,420
59,746
Accumulated other comprehensive income, net of tax ................................................
5,472
6,356
Total shareholders' equity ................................................................................................
264,215
231,565
Total liabilities and shareholders' equity ......................................................................... $
589,983 $
593,418

See accompanying Notes to Consolidated Financial Statements

F-7
DOUGLAS DYNAMICS, INC.
CONSOLIDATED STATEMENTS OF INCOME
(In Thousands, Except Per Share Data)

Years ended December 31,

2024

2023

2022

Net sales ............................................................................................. $
568,504 $
568,178 $
616,068
Cost of sales .......................................................................................
421,667
433,908
464,612
Gross profit .........................................................................................
146,837
134,270
151,456
Selling, general, and administrative expense ......................................
91,682
78,841
82,183
Impairment charges ............................................................................
1,224
-
-
Gain on sale leaseback transaction .....................................................
(42,298)
-
-
Intangibles amortization .....................................................................
7,520
10,520
10,520
Income from operations ......................................................................
88,709
44,909
58,753
Interest expense, net ...........................................................................
(15,260)
(15,675 )
(11,253)
Other income (expense), net ...............................................................
442
-
(139)
Income before taxes ...........................................................................
73,891
29,234
47,361
Income tax expense ............................................................................
17,740
5,511
8,752
Net income ......................................................................................... $
56,151 $
23,723 $
38,609
Earnings per common share:

Basic ............................................................................................... $
2.39 $
1.01 $
1.65
Diluted ............................................................................................ $
2.36 $
0.98 $
1.63
Cash dividends declared and paid per share ....................................... $
1.18 $
1.18 $
1.16

See accompanying Notes to Consolidated Financial Statements

F-8
DOUGLAS DYNAMICS, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In Thousands)

Years ended December 31,

2024

2023

2022

Net income ......................................................................................... $
56,151 $
23,723 $
38,609
Other comprehensive income:

Adjustment for pension and postretirement benefit liability,
net of tax of ($211) in 2024, ($1) in 2023 and ($176) in 2022 ....
651
3
541
Adjustment for interest rate swap, net of tax of $485 in 2024,
$910 in 2023 and ($3,140) in 2022 .............................................
(1,495)
(2,775 )
9,640
Adjustment for steel hedging instrument, net of tax of $14 in
2024, $0 in 2023 and $0 in 2022 .................................................
(40)
-
-
Total other comprehensive income, net of tax ...................................
(884)
(2,772 )
10,181
Comprehensive income ...................................................................... $
55,267 $
20,951 $
48,790

See accompanying Notes to Consolidated Financial Statements

F-9
DOUGLAS DYNAMICS, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
(Dollars In Thousands)

Accumulated

Additional

Other

Common Stock

Paid-in
Retained Comprehensive

Shares
Dollars
Capital Earnings Income (Loss)
Total

Balance at December 31, 2021 ....................... 22,980,951 $
230 $
163,552 $ 51,881 $
(1,053 ) $ 214,610
Net income ..............................................
—
—
—
38,609
—
38,609
Dividends paid ........................................
—
—
— (27,026 )
— (27,026 )
Adjustment for pension and
postretirement benefit liability, net of
tax of ($176) ........................................
—
—
—
—
541
541
Adjustment for interest rate swap, net of
tax of ($3,140) .....................................
—
—
—
—
9,640
9,640
Repurchase of common stock .................
(171,088 )
(2 )
(5,999 )
—
—
(6,001 )
Stock based compensation ......................
76,930
1
6,728
—
—
6,729
Balance at December 31, 2022 ....................... 22,886,793 $
229 $
164,281 $ 63,464 $
9,128 $ 237,102
Net income ..............................................
—
—
—
23,723
—
23,723
Dividends paid ........................................
—
—
— (27,441 )
— (27,441 )
Adjustment for pension and
postretirement benefit liability, net of
tax of ($1) ............................................
—
—
—
—
3
3
Adjustment for interest rate swap, net of
tax of $910 ..........................................
—
—
—
—
(2,775 )
(2,775 )
Stock based compensation ......................
97,172
1
952
—
—
953
Balance at December 31, 2023 ....................... 22,983,965 $
230 $
165,233 $ 59,746 $
6,356 $ 231,565
Net income ..............................................
—
—
—
56,151
—
56,151
Dividends paid ........................................
—
—
— (27,477 )
— (27,477 )
Adjustment for pension and
postretirement benefit liability, net of
tax of ($211) ........................................
—
—
—
—
651
651
Adjustment for interest rate swap, net of
tax of $485 ..........................................
—
—
—
—
(1,495 )
(1,495 )
Adjustment for steel hedging instrument,
net of tax of $14 .................................
—
—
—
—
(40)
(40 )
Stock based compensation ......................
110,082
1
4,859
—
—
4,860
Balance at December 31, 2024 ....................... 23,094,047 $
231 $
170,092 $ 88,420 $
5,472 $ 264,215

See accompanying Notes to Consolidated Financial Statements

F-10
DOUGLAS DYNAMICS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)

Years ended December 31,

2024

2023

2022

Operating activities

Net income ......................................................................................... $
56,151 $
23,723 $
38,609
Adjustments to reconcile net income to net cash provided by
operating activities:

Depreciation and amortization ........................................................
17,890
21,662
20,938
Amortization of deferred financing costs and debt discount ...........
703
588
491
Loss (gain) on disposal of fixed assets ...........................................
347
(56 )
111
Gain on sale leaseback transaction .....................................................
(42,298)
-
-
Stock based compensation ..............................................................
4,860
953
6,730
Adjustments on derivatives not designated as hedges ....................
(287)
(688 )
(688)
Provision (credit) for losses on accounts receivable .......................
702
320
(1,476)
Deferred income taxes ....................................................................
(3,042)
7,561
(3,268)
Impairment charges ........................................................................
1,224
-
-
Non-cash lease expense ..................................................................
6,319
5,097
1,030
Changes in operating assets and liabilities, net of acquisitions:

Accounts receivable ........................................................................
(4,348)
2,684
(14,253)
Inventories ......................................................................................
3,356
(3,888 )
(32,483)
Prepaid assets, refundable income taxes and other assets ...............
2,185
(14,010 )
3,422
Accounts payable ............................................................................
991
(17,123 )
21,522
Accrued expenses and other current liabilities ...............................
2,052
(8,154 )
1,321
Benefit obligations, long-term liabilities and other .........................
(5,674)
(6,200 )
(1,976)
Net cash provided by operating activities ...........................................
41,131
12,469
40,030
Investing activities

Capital expenditures ...........................................................................
(7,810)
(10,521 )
(12,047)
Proceeds from sale leaseback transaction ...........................................
64,150
-
-
Proceeds from insurance recoveries ...................................................
452
-
-
Net cash provided by (used in) investing activities ............................
56,792
(10,521 )
(12,047)
Financing activities

Repurchase of common stock .............................................................
-
-
(6,001)
Proceeds from (payments on) life insurance policy loans ..................
(204)
750
-
Payments of financing costs ...............................................................
(279)
(334 )
-
Dividends paid....................................................................................
(27,477)
(27,441 )
(27,026)
Net revolver borrowings .....................................................................
(47,000)
47,000
-
Repayment of long-term debt .............................................................
(42,000)
(18,437 )
(11,250)
Net cash provided by (used in) financing activities ............................
(116,960)
1,538
(44,277)
Change in cash and cash equivalents ..................................................
(19,037)
3,486
(16,294)
Cash and cash equivalents at beginning of year .................................
24,156
20,670
36,964
Cash and cash equivalents at end of year ........................................... $
5,119 $
24,156 $
20,670
Non-cash operating and financing activities

Truck chassis inventory acquired through floor plan obligations ... $
5,637 $
7,875 $
4,725
Supplemental disclosure of cash flow information ............................

Income taxes paid ............................................................................... $
13,600 $
14,512 $
7,025
Interest paid ........................................................................................ $
18,942 $
18,184 $
11,662

See accompanying Notes to Consolidated Financial Statements

F-11
Douglas Dynamics, Inc.
Notes to Consolidated Financial Statements
Years ended December 31, 2024, 2023 and 2022
(Dollars in Thousands Except Per Share Data)

1. Description of business and basis of presentation

Douglas Dynamics, Inc. (the “Company,”) is a premier manufacturer and upfitter of commercial vehicle attachments
and equipment. The Company’s portfolio includes snow and ice management attachments sold under the FISHER®,
HENDERSON®, SNOWEX® and WESTERN® brands, turf care equipment under the TURFEX® brand, and industrial
maintenance equipment under the SWEEPEX® brand. The Company’s portfolio also includes the upfit of market leading
attachments and storage solutions under the HENDERSON® brand, and the DEJANA® brand and its related sub-brands. The
Company is headquartered in Milwaukee, WI and currently owns one facility in Rockland, ME. The Company also leases
twenty-two manufacturing and upfit and service facilities located in Iowa, Maine, Maryland, Michigan, Missouri, New
Jersey, New York, Ohio, Pennsylvania, Rhode Island, and Wisconsin. Additionally, the Company operates a sourcing office
in China.

The Company conducts business in two segments: Work Truck Attachments and Work Truck Solutions. Financial
information regarding these segments is in Note 16 to the Consolidated Financial Statements.

Recently adopted accounting standards

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update
("ASU") 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures,” which requires that
entities disclose significant segment expenses and enhances disclosure around segment reporting. The standard is effective
for annual periods beginning after December 15, 2023. The Company adopted this standard in fiscal 2024 - see Note 16 to
the Consolidated Financial Statements.

2. Summary of Significant Accounting Policies

Principles of consolidation

The accompanying consolidated financial statements include the accounts of Douglas Dynamics, Inc. and its direct
wholly-owned subsidiary, Douglas Dynamics, L.L.C., and its wholly-owned subsidiaries, Douglas Dynamics Finance
Company (an inactive subsidiary), Fisher, LLC, Henderson Enterprises Group, Inc., Henderson Products, Inc. and Dejana
Truck & Utility Equipment Company, LLC (hereinafter collectively referred to as the “Company”). All intercompany
balances and transactions have been eliminated in consolidation.

Use of estimates

The preparation of the financial statements in conformity with U.S. generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses
during the reporting periods. Accordingly, actual results could differ from those estimates.

Cash and cash equivalents

The Company considers all highly liquid investments purchased with an original maturity of three months or less to
be cash equivalents. Cash equivalents are carried at cost, which approximates fair value.

Douglas Dynamics, Inc.
Notes to Consolidated Financial Statements (Continued)
Years ended December 31, 2024, 2023 and 2022
(Dollars in Thousands Except Per Share Data)

F-12
Accounts receivable and allowance for credit losses

The Company carries its accounts receivable at their face amount less an allowance for credit losses. The majority
of the Company’s accounts receivable are due from distributors of truck equipment and dealers of completed upfit trucks.
Credit is extended based on an evaluation of a customer’s financial condition. A receivable is considered past due if payments
have not been received within agreed upon invoice terms. Accounts receivable are written off after all collection efforts have
been exhausted. The Company takes a security interest in the inventory as collateral for the receivable but often does not have
a priority security interest. The Company has short-term accounts receivable at its Work Truck Attachments and Work Truck
Solutions segments subject to evaluation for expected credit losses. Expected credit losses are estimated based on the loss-
rate and probability of default methods. On a periodic basis, the Company evaluates its accounts receivable and establishes
the allowance for credit losses based on specific customer circumstances, past events including collections and write-off
history, current conditions, and reasonable forecasts about the future. As of December 31, 2024, the Company had an
allowance for credit losses on its trade accounts receivable of $1,768 and $604 at its Work Truck Attachments and Work
Truck Solutions segments, respectively. As of December 31, 2023, the Company had an allowance for credit losses on its
trade accounts receivable of $1,400 and $246 at its Work Truck Attachments and Work Truck Solutions segments,
respectively.

Douglas Dynamics, Inc.
Notes to Consolidated Financial Statements (Continued)
Years ended December 31, 2024, 2023 and 2022
(Dollars in Thousands Except Per Share Data)

F-13
The following table rolls forward the activity related to credit losses for trade accounts receivable at each segment,
and on a consolidated basis for the years ended December 31, 2024 and 2023:

Balance at
Additions
(reductions)

Balance at

December 31,
charged to

Changes to December 31,

2023

earnings

Writeoffs reserve, net
2024

Year Ended December 31, 2024

Work Truck Attachments ................ $
1,400 $
404 $
(41 ) $
5 $
1,768
Work Truck Solutions .....................
246
298
-
60
604
Total ................................................ $
1,646 $
702 $
(41 ) $
65 $
2,372

Balance at
Additions
(reductions)

Balance at

December 31,
charged to

Changes to December 31,

2022

earnings

Writeoffs reserve, net
2023

Year Ended December 31, 2023

Work Truck Attachments ................ $
1,000 $
400 $
- $
- $
1,400
Work Truck Solutions .....................
366
(80 )
(46 )
6
246
Total ................................................ $
1,366 $
320 $
(46 ) $
6 $
1,646

Financing program

The Company is party to a financing program in which certain distributors may elect to finance their purchases from
the Company through a third party financing company. The Company provides the third party financing company recourse
against the Company regarding the collectability of the receivable under the program due to the fact that if the third party
financing company is unable to collect from the distributor the amounts due in respect of the product financed, the Company
would be obligated to repurchase any remaining inventory related to the product financed, which is considered a right of
return, and reimburse any legal fees incurred by the financing company. During the years ended December 31, 2024, 2023
and 2022, distributors financed purchases of $6,303, $9,022 and $15,782 through this financing program, respectively. At
both December 31, 2024 and December 31, 2023, there were no uncollectible outstanding receivables related to sales financed
under the financing program. The amount owed by distributors to the third party financing company under this program at
December 31, 2024 and 2023 was $8,910 and $13,748, respectively. The Company was not required to repurchase any
repossessed inventory for the years ended December 31, 2024, 2023 and 2022.

In the past, minimal losses have been incurred under this agreement. However, an adverse change in distributor retail
sales could cause this situation to change and thereby require the Company to repurchase repossessed units. Any repossessed
units are inspected to ensure they are current, unused product and are restocked and resold.

Interest Rate Swap

The Company is a counterparty to interest rate swap agreements to hedge against the potential impact on earnings
from increases in market interest rates. On June 13, 2019, the Company entered into an interest rate swap agreement to reduce
its exposure to interest rate volatility. The interest rate swap has a notional amount of $175,000 effective for the period May
31, 2019 through May 31, 2024. The Company may have counterparty credit risk resulting from the interest rate swap, which
it monitors on an on-going basis. The risk lies with one global financial institution. Under the interest rate swap agreement,
the Company will either receive or make payments on a monthly basis based on the differential between 2.424% and SOFR.
From June 13, 2019 through March 18, 2020, the interest rate swap was accounted for as a cash flow hedge. During the first
quarter of 2020, the swap was determined to be ineffective. As a result, the swap was dedesignated on March 19, 2020, and
the remaining losses included in Accumulated other comprehensive income on the Consolidated Balance Sheets would be
amortized into interest expense on a straight line basis through the life of the swap. The amount amortized from Accumulated
other comprehensive income into earnings during the years ended December 31, 2024 and 2023 was ($485) and ($1,163),
respectively. A mark-to-market adjustment of $198 and $476 was recorded as Interest expense in the Consolidated Statements
of Income for the years ended December 31, 2024 and 2023, respectively, related to the swap.

Douglas Dynamics, Inc.
Notes to Consolidated Financial Statements (Continued)
Years ended December 31, 2024, 2023 and 2022
(Dollars in Thousands Except Per Share Data)

F-14
On June 9, 2021, in conjunction with entering into the Credit Agreement described below, the Company re-
designated its swap. As a result, the swap will be recorded at fair value with changes recorded in Accumulated other
comprehensive income. The amortization from Accumulated other comprehensive income into earnings from the previous
dedesignation has been adjusted as of June 9, 2021 to include the de-recognition of previously recognized mark-to-market
gains and the amortization of the off-market component as of the re-designation date, and will continue to be recognized
through the life of the swap. As of December 31, 2024, the amount in Accumulated other comprehensive income has been
fully amortized into earnings.

On May 19, 2022, the Company entered into an interest rate swap agreement to further reduce its exposure to interest
rate volatility. The interest rate swap has a notional amount of $125,000 effective for the period May 31, 2024 through June
9, 2026. The Company may have counterparty credit risk resulting from the interest rate swap, which it monitors on an on-
going basis. The risk lies with two global financial institutions. Under the interest rate swap agreement, the Company will
either receive or make payments on a monthly basis based on the differential between 2.718% and SOFR. The interest rate
swap is accounted for as a cash flow hedge.

The fair value of the interest rate swaps, net of tax, is $1,732 and $2,984 at December 31, 2024 and December 31,
2023, respectively, of which $1,836 and $3,331 is included in Accumulated other comprehensive income on the balance sheet
as of December 31, 2024 and 2023, respectively. This fair value was determined using Level 2 inputs as defined in Accounting
Standards Codification Topic (“ASC”) 820 - Fair Value Measurements and Disclosures.

Steel Hedging Instrument

On December 17, 2024, the Company entered into a steel hedging agreement to reduce its exposure to commodity
price volatility. The steel hedging instrument has a notional quantity of 3,000 short tons and is effective for the period August
1, 2025 through December 31, 2025, which the Company expects to be slightly less than half of its exposure during the
effective period. Under the steel hedge agreement, the Company will make fixed payments of $819 per short ton for the Steel
Hot Rolled Coil (HRC) commodity. The steel hedging instrument is accounted for as a cash flow hedge.

The fair value of the steel hedging instrument, net of tax, is $40 at December 31, 2024, of which $40 is included in
Accumulated other comprehensive income on the balance sheet as of December 31, 2024. This fair value was determined
using Level 2 inputs as defined in ASC 820 - Fair Value Measurements and Disclosures.

Inventories

Inventories are stated at the lower of cost or market. Market is determined based on estimated realizable values.
Inventory costs are primarily determined by the first-in, first-out (FIFO) method. The Company periodically reviews its
inventory for slow moving, damaged and discontinued items and provides reserves to reduce such items identified to their
recoverable amounts.

The Company records inventories to include truck chassis inventory financed through a floor plan financing
agreement as discussed in Note 8. The Company takes title to truck chassis upon receipt of the inventory through its floor
plan agreement and performs upfitting service installations to the truck chassis inventory during the installation period. The
floor plan obligation is then assumed by the dealer customer upon delivery. At December 31, 2024 and 2023, the Company
had $2,612 and $2,217 of chassis inventory and related floor plan financing obligation, respectively. The Company
recognizes revenue associated with upfitting and service installations net of the truck chassis.

The Company receives, on consignment, truck chassis on which it performs upfitting service installations under
“bailment pool” arrangements with major truck manufacturers. The Company never receives title to the truck chassis. The
aggregate value of all bailment pool chassis on hand as of December 31, 2024 and 2023 was $17,489 and $20,293,
respectively. The Company is responsible to the manufacturer for interest on chassis held for upfitting. The Company
recognizes revenue associated with upfitting and service installations net of the truck chassis.

Douglas Dynamics, Inc.
Notes to Consolidated Financial Statements (Continued)
Years ended December 31, 2024, 2023 and 2022
(Dollars in Thousands Except Per Share Data)

F-15
Leases

As of December 31, 2024, twenty-two of the Company’s offices, manufacturing facilities and upfit and distribution
centers were subject to a lease agreement. See Note 6 for additional information on the Company’s leases.

During the year ended December 31, 2024, the Company closed on a sale leaseback transaction with an
unrelated third party. Under this transaction, the Company sold seven properties with a combined net book value of
$21,852 for gross proceeds of $64,150, which was reduced by transaction costs of $5,494 for net cash proceeds of
approximately $58,656. The properties in the sale leaseback transaction are comprised of three facilities located in
Milwaukee, Wisconsin and four additional facilities located in each of Huntley, Illinois; Manchester, Iowa; Rockland, Maine;
and Madison Heights, Michigan, totaling approximately 780,000 square feet of manufacturing and upfitting space. The lease
agreement has an initial term of 15 years, with two optional 10-year renewal options. See Note 6 for additional information
on the sale leaseback transaction.

Property, plant and equipment

Property, plant and equipment are recorded at cost, less accumulated depreciation. Depreciation is computed using
straight-line methods over the estimated useful lives for financial statement purposes and an accelerated method for income
tax reporting purposes. The estimated useful lives of the assets are as follows:

Years

Land improvements and buildings ..................................................................................................................
15 - 40

Leasehold improvements .................................................................................................................................
12

Machinery and equipment ...............................................................................................................................
3 - 20

Furniture and fixtures ......................................................................................................................................
3 - 12

Mobile equipment and other ............................................................................................................................
3 - 10

Depreciation expense was $10,370, $11,142, and $10,418 for the years ended December 31, 2024, 2023 and 2022,
respectively. The estimated useful lives of leasehold improvements is the shorter of the remainder of the lease term and twelve
years.

Expenditures for renewals and improvements that significantly add to the productive capacity or extend the useful
life of an asset are capitalized. Expenditures for maintenance and repairs are charged to operations when incurred. Repairs
and maintenance expenses amounted to $7,060, $6,925 and $6,750 for the years ended December 31, 2024, 2023 and 2022,
respectively. When assets are sold or retired, the cost of the asset and the related accumulated depreciation are eliminated
from the accounts and any gain or loss is recognized in results of operations.

Impairment of long-lived assets

Long-lived assets are reviewed for potential impairment when events or changes in circumstances indicate that the
carrying amount of the asset may not be recoverable. Recoverability of assets to be held and used is measured by comparison
of the carrying value of such assets to the undiscounted future cash flows expected to be generated by the assets. If the
carrying value of an asset exceeds its estimated undiscounted future cash flows, an impairment provision is recognized to the
extent that the carrying amount of the asset exceeds its fair value. Assets to be disposed of are reported at the lower of the
carrying amount or the fair value of the asset, less costs of disposition. Management of the Company considers such factors
as current results, trends and future prospects, current market value, and other economic and regulatory factors in performing
these analyses. During the year ended December 31, 2024, and in conjunction with the Company's 2024 Cost Savings
Program, impairment charges of $1,224 were recorded in the Consolidated Statements of Income related to certain internally
developed software at the Company's Work Truck Attachments segment representing the full capitalized value of the
software. See Note 21 for additional information.

Douglas Dynamics, Inc.
Notes to Consolidated Financial Statements (Continued)
Years ended December 31, 2024, 2023 and 2022
(Dollars in Thousands Except Per Share Data)

F-16
Goodwill and other intangible assets

Goodwill and indefinite lived intangible assets are tested for impairment annually as of December 31, or sooner if
impairment indicators arise. The fair value of indefinite lived intangible assets is estimated based upon an income and market
approach. In reviewing goodwill for impairment, potential impairment is identified by comparing the estimated fair value of
the reporting units to its carrying value. The Company has determined it has three reporting units. When the fair value is less
than the carrying value of the net assets of the reporting unit, including goodwill, an impairment loss would be recognized.

The Work Truck Attachments segment consists of one reporting unit: Commercial Snow & Ice. The annual
impairment tests performed as of December 31, 2024 and December 31, 2023 indicated no impairment for the Commercial
Snow & Ice reporting unit, which had goodwill of $113,134 at both December 31, 2024 and 2023. The Work Truck Solutions
consists of two reporting units: Municipal and Dejana. Each of the Municipal and Dejana reporting units had $0 in goodwill
at December 31, 2023 and December 31, 2024.

Intangible assets with estimable useful lives are amortized over their respective estimated useful lives and are
reviewed for potential impairment when events or circumstances indicate that the carrying amount of the asset may not be
recoverable. The Company amortizes its distribution network intangibles over periods ranging from 15 to 20 years,
trademarks over 7 to 25 years, patents over 7 to 20 years, customer relationships over 15 to 19.5 years and noncompete
agreements over 4 to 5 years. There were no indicators of impairment during the years ended December 31, 2024 or 2023.
The Company had gross intangible assets and accumulated amortization of $273,755 and $160,205, respectively, for the year
ended December 31, 2024, of which $177,765 and $111,945 relate to the Work Truck Attachments segment, and $95,990 and
$48,260 relate to the Work Truck Solutions segment, respectively. The Company had gross intangible assets and accumulated
amortization of $273,755 and $152,685, respectively for the year ended December 31, 2023, of which $177,765 and
$109,551 relate to the Work Truck Attachments segment, and $95,990 and $43,134 relate to the Work Truck Solutions
segment, respectively.

At December 31, 2024, the Company’s Dejana reporting unit had tradenames of $14,000 and an estimated fair value
of $17,600. If the Company is unable to attain the financial projections used in calculating the fair value, or if there are
significant market conditions impacting the market approach, the Company’s Dejana tradenames could be at risk of
impairment. If the Company experiences delays by its supplier and OEM partners in the production and delivery of chassis
for a prolonged period of time, which could negatively affect the Company’s financial results, the Dejana tradenames may
be impaired. The discount rate and royalty rate used in the calculation of the fair value are sensitive and based on the
Company’s assumptions, and changes to those assumptions could cause the Dejana tradenames to be at risk of impairment.
There were no indicators of impairment subsequent to the December 31, 2024 impairment test.

Income taxes

Deferred income taxes are accounted for under the asset and liability method whereby deferred tax assets and
liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying
amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using
enacted tax rates. Deferred income tax provisions or benefits are based on the change in the deferred tax assets and liabilities
from period to period. Deferred income tax assets are reduced by a valuation allowance if it is more likely than not that some
portion of the deferred income tax asset will not be realized. Additionally, when applicable, the Company would classify
interest and penalties related to uncertain tax positions in income tax expense.

Douglas Dynamics, Inc.
Notes to Consolidated Financial Statements (Continued)
Years ended December 31, 2024, 2023 and 2022
(Dollars in Thousands Except Per Share Data)

F-17
Deferred financing costs

The costs of obtaining financing are capitalized and amortized over the term of the related financing on a basis that
approximates the effective interest method. The changes in deferred financing costs are as follows:

Balance at December 31, 2021 ...................................................................................................................... $
1,680
Amortization of deferred financing costs ......................................................................................................
(379 )
Balance at December 31, 2022 ......................................................................................................................
1,301
Deferred financing costs capitalized on new debt .........................................................................................
334
Amortization of deferred financing costs ......................................................................................................
(475 )
Balance at December 31, 2023 ......................................................................................................................
1,160
Deferred financing costs capitalized on new debt .........................................................................................
278
Amortization of deferred financing costs ......................................................................................................
(591 )
Balance at December 31, 2024 ...................................................................................................................... $
847

Fair value

Fair value is the price at which an asset could be exchanged in a current transaction between knowledgeable, willing
parties. A liability’s fair value is defined as the amount that would be paid to transfer the liability to a new obligor, not the
amount that would be paid to settle the liability with the creditor. Fair value measurements are categorized into one of three
levels based on the lowest level of significant input used: Level 1 (unadjusted quoted prices in active markets); Level 2
(observable market inputs available at the measurement date, other than quoted prices included in Level 1); and Level 3
(unobservable inputs that cannot be corroborated by observable market data).

Douglas Dynamics, Inc.
Notes to Consolidated Financial Statements (Continued)
Years ended December 31, 2024, 2023 and 2022
(Dollars in Thousands Except Per Share Data)

F-18
The following table presents financial assets and liabilities measured at fair value on a recurring basis and discloses
the fair value of long-term debt:

Fair Value at
December 31,
2024

Fair Value at
December 31,
2023

Assets:

Non-qualified benefit plan assets (a) ........................................................................... $
10,482 $
9,195
Interest rate swaps (b) ..................................................................................................
2,340
4,033

Total Assets ..................................................................................................................... $
12,822 $
13,228

Liabilities:

Long-term debt (c) .......................................................................................................
147,526
189,413
Steel hedging instrument (d) ........................................................................................
54
-

Total Liabilities ............................................................................................................... $
147,580 $
189,413

(a) Included in Non-qualified benefit plan assets is the cash surrender value of insurance policies on various individuals
that are associated with the Company. The carrying amounts of these insurance policies approximates their fair value.
The Company had outstanding loans of $546 and $750 against these Non-qualified benefit plan assets as of December
31, 2024 and December 31, 2023, respectively, included in Other long-term liabilities on the Consolidated Balance
Sheets.

(b) Valuation models are calibrated to initial trade price. Subsequent valuations are based on observable inputs to the
valuation model (e.g., interest rates and credit spreads). Model inputs are changed only when corroborated by market
data. A credit risk adjustment is made on each swap using observable market credit spreads. Thus, inputs used to
determine fair value of the interest rate swap are Level 2 inputs. Interest rate swaps of $1,712 and $628 at December
31, 2024 are included in Prepaid and other current assets and Other long-term assets, respectively. Interest rate swaps
of $3,174 and $859 at December 31, 2023 are included in Prepaid and other current assets and Other long-term assets,
respectively.

(c) The fair value of the Company’s long-term debt, including current maturities, approximates its carrying
value. Long-term debt is recorded at carrying amount, net of discount and deferred debt issuance costs, as disclosed
on the face of the balance sheet.

(d) Valuation models are calibrated to initial trade price. Subsequent valuations are based on observable inputs to the
valuation model (e.g., market prices). Model inputs are changed only when corroborated by market data. Thus, inputs
used to determine fair value of the interest rate swap are Level 2 inputs. Steel hedging instruments of $54 at December
31, 2024 are included in Accrued expenses and other current liabilities.

Concentration of credit risk

The Company’s cash is deposited with multiple financial institutions. At times, deposits in these institutions exceed
the amount of insurance provided on such deposits. The Company has not experienced any losses in such accounts and
believes that it is not exposed to any significant risk on these balances.

No distributor represented more than 10% of the Company’s net sales or accounts receivable during the years ended
December 31, 2024, 2023 and 2022.

Douglas Dynamics, Inc.
Notes to Consolidated Financial Statements (Continued)
Years ended December 31, 2024, 2023 and 2022
(Dollars in Thousands Except Per Share Data)

F-19
Revenue recognition

The Company applies the guidance codified in Accounting Standards Codification 606, Revenue from Contracts
with Customers (“Topic 606”). Revenue is recognized when or as the Company satisfies a performance obligation. See Note 3
for a more detailed description of revenue recognition policies.

Cost of sales

Cost of sales includes all costs associated with the manufacture of the Company’s products, including raw materials,
purchased parts, freight, plant operating expenses, property insurance and taxes, and plant depreciation. All payroll costs and
employee benefits for the hourly workforce, manufacturing management, and engineering costs are included in cost of sales.

Related party transactions

There were no material related party transactions during 2022, 2023 or 2024.

Warranty cost recognition

The Company accrues for estimated warranty costs as revenue is recognized. All warranties are assurance-type
warranties. See Note 10 for further details.

Defined benefit plan

The Company has a noncontributory, defined benefit postretirement benefit plan covering certain employees.
Management reviews underlying assumptions on an annual basis. Refer to Note 12 for additional information.

Advertising expenses

Advertising expenses include costs for the production of marketing media, literature, website content and displays.
The Company participates in trade shows and advertises on billboards. Advertising expenses amounted to $4,033, $4,823 and
$4,699 for the years ended December 31, 2024, 2023 and 2022, respectively. All costs associated with the Company’s
advertising programs are expensed as incurred.

Research and development expenses

Research and development expenses include costs to develop new technologies to enhance existing products and to
expand the range of product offerings. Research and development expenses amounted to $8,397, $10,081 and $12,159 for
the years ended December 31, 2024, 2023 and 2022, respectively.

Douglas Dynamics, Inc.
Notes to Consolidated Financial Statements (Continued)
Years ended December 31, 2024, 2023 and 2022
(Dollars in Thousands Except Per Share Data)

F-20
Shipping and handling costs

Generally, shipping and handling costs are paid directly by the customer to the shipping agent. Those shipping and
handling costs billed by the Company are recorded as a component of sales with the corresponding costs included in cost of
sales.

Share-based payments

The Company applies the guidance codified in ASC 718, Compensation—Stock Compensation. This standard
requires the measurement of the cost of employee services received in exchange for an award of equity instruments based on
the fair value of the award at the grant date and recognition of the compensation expense over the period during which an
employee is required to provide service in exchange for the award (generally the vesting period).

Accumulated other comprehensive income

Accumulated other comprehensive income is defined as the change in equity (net assets) of a business enterprise
during a period from transactions and other events and circumstances from non-owner resources and is comprised of net
income and “other comprehensive income”. The Company’s other comprehensive income is comprised of the adjustments
for postretirement benefit liabilities as well as the impact of its interest rate swaps and other hedging instruments. See Note
19 for the components of accumulated other comprehensive income.

Segment reporting

The Company operates through two operating segments for which separate financial information is available, and
for which operating results are evaluated regularly by the Company's chief operating decision maker in determining resource
allocation and assessing performance. The Company’s two current reportable business segments are described below.

Work Truck Attachments. The Work Truck Attachments segment includes the Company's operations that manufacture
and sell snow and ice control attachments and other products sold under the FISHER®, WESTERN® and SNOWEX®
brands, as well as the Company's vertically integrated products.

Work Truck Solutions. The Work Truck Solutions segment includes manufactured municipal snow and ice control
products under the HENDERSON® brand and the up-fit of market leading attachments and storage solutions under the
HENDERSON® brand, and the DEJANA® brand and its related sub-brands.

Segment performance is evaluated based on segment net sales and Adjusted EBITDA. See Note 16 for financial
information regarding these segments. Sales are primarily within the United States and substantially all assets are located
within the United States.

Douglas Dynamics, Inc.
Notes to Consolidated Financial Statements (Continued)
Years ended December 31, 2024, 2023 and 2022
(Dollars in Thousands Except Per Share Data)

F-21
3. Revenue Recognition

Revenue Streams

The following is a description of principal activities from which the Company generates revenue. Revenues are
recognized when control of the promised goods or services are transferred to the customer, in an amount that reflects the
consideration that the Company expects to be entitled to in exchange for those goods or services. The Company generates all
of its revenue from contracts with customers. Additionally, contract amounts represent the full amount of the transaction price
as agreed upon with the customer at the time of order, resulting in a single performance obligation in most cases. In the case
of a single order containing multiple upfits, the transaction price may represent multiple performance obligations.

Work Truck Attachments

The Company recognizes revenue upon shipment of equipment to the customer. Within the Work Truck Attachments
segment, the Company offers a variety of discounts and sales incentives to its distributors, which are accounted for as variable
consideration. The estimated liability for sales discounts and allowances is calculated using the expected value method and
recorded at the time of sale as a reduction of net sales. The liability is estimated based on the costs of the program, the planned
duration of the program, expected market conditions and historical experience.

The Work Truck Attachments segment has two revenue streams, as identified below.

Independent Dealer Sales – Revenues from sales to independent dealers are recognized when the dealer customer
obtains control of the Company’s product, which occurs at a point in time, typically upon shipment. In these instances, each
product is considered a separate performance obligation, and revenue is recognized upon shipment of the goods. Any shipping
and handling activities performed by the Company after the transfer of control to the customer (e.g., when control transfers
upon shipment) are considered fulfillment activities, and accordingly, the costs are accrued for when the related revenue is
recognized.

Parts & Accessory Sales – The Company’s equipment is used in harsh conditions and parts frequently wear out.
These parts drive recurring revenues through parts and accessory sales. The process for recording parts and accessory sales
is consistent with the independent dealer sales noted above.

Work Truck Solutions

The Work Truck Solutions segment primarily participates in the truck and vehicle upfitting industry in the United
States. Customers are billed separately for the truck chassis by the chassis manufacturer. The Company only records sales
for the amount of the upfit, excluding the truck chassis. Generally, the Company obtains the truck chassis from the truck
chassis manufacturer through either its floor plan agreement with a financial institution or bailment pool agreement with the
truck chassis manufacturer. Additionally, in some instances the Company upfits chassis which are owned by the end
customer. For truck chassis acquired through the floor plan agreement, the Company holds title to the vehicle from the time
the chassis is received by the Company until the completion of the up-fit. Under the bailment pool agreement, the Company
does not take title to the truck chassis, but rather only holds the truck chassis on consignment. The Company pays interest on
both of these arrangements. The Company records revenue in the same manner net of the value of the truck chassis in both
the Company’s floor plan and bailment pool agreements. The Company does not set the price for the truck chassis, is not
responsible for the billing of the chassis and does not have inventory risk in either the bailment pool or floor plan agreements.
The Work Truck Solutions segment also has manufacturing operations of municipal snow and ice control equipment, where
revenue is recognized upon shipment of equipment to the customer.

Revenues from the sales of the Work Truck Solutions products are recognized net of the truck chassis with the
selling price to the customer recorded as sales and the manufacturing and up-fit cost of the product recorded as cost of sales.
In these cases, the Company acts as an agent as it does not have inventory or pricing control over the truck chassis. Within
the Work Truck Solutions segment, the Company also sells certain third-party products for which it acts as an agent. These
sales do not meet the criteria for gross sales recognition, and thus are recognized on a net basis at the time of sale. Under net
sales recognition, the cost paid to the third-party service provider is recorded as a reduction to sales, resulting in net sales
being equal to the gross profit on the transaction.

Douglas Dynamics, Inc.
Notes to Consolidated Financial Statements (Continued)
Years ended December 31, 2024, 2023 and 2022
(Dollars in Thousands Except Per Share Data)

F-22
The Work Truck Solutions segment has four revenue streams, as identified below.

State and Local Bids – The Company records revenue of separately sold snow and ice equipment upon shipment
and fully upfit vehicles upon delivery. The state and local bid process does not obligate the entity to buy any products from
the Company, but merely allows the entity to purchase products in the future typically for a fixed period of time. The entity
commits to actually purchasing products from the Company when it issues purchase orders off of a previously awarded bid,
which lists out actual quantities of equipment being ordered and the delivery terms. On upfit transactions, the Company is
providing a significant service by assembling and integrating the individual products onto the customer’s truck. Each
individual product and installation activity is highly interdependent and highly interrelated, and therefore the Company
considers the manufacture and upfit of a truck a single performance obligation. Any shipping and handling activities
performed by the Company after the transfer of control to the customer (e.g., when control transfers upon shipment) are
considered fulfillment activities, and accordingly, the costs are accrued for when the related revenue is recognized. For non-
customer owned vehicles, revenue is recognized at a point in time upon delivery of the truck to the customer. For customer-
owned vehicles, per Topic 606, revenue is recognized over time based on a cost input method as the Company's performance
enhances an asset the customer controls while the asset is enhanced. The Company accumulates costs incurred on partially
completed customer-owned upfits based on estimated margin and completion.

Fleet Upfit Sales – The Company enters into contracts with certain fleet customers. Fleet agreements can create
enforceable rights without the issuance of a purchase order. Typically, these agreements outline the terms of sale, payment
terms, standard pricing, and the rights of the customer and seller. These agreements also obligate the customer to purchase a
specified quantity of products. Fleet sales are performed on both customer owned vehicles as well as non-customer owned
vehicles. For non-customer owned vehicles, revenue is recognized at a point in time upon delivery of the truck to the
customer. For customer-owned vehicles, per Topic 606, revenue is recognized over time based on a cost input method as the
Company's performance enhances an asset the customer controls while the asset is enhanced. The Company accumulates
costs incurred on partially completed customer-owned upfits based on estimated margin and completion.

Dealer Upfit Sales – The Company upfits work trucks for independent dealer customers. Dealer upfit revenue is
recorded upon delivery. The customer does not own the vehicles during the upfit process, and as such revenue is recorded at
a point in time upon delivery to the customer.

Over the Counter / Parts & Accessory Sales – Work Truck Solutions part and accessory sales are recorded as revenue
upon shipment. Additionally, customers can purchase parts at any of the Company’s showrooms. In these instances, each
product is considered a separate performance obligation, and revenue is recognized upon shipment of the goods or customer
pick up.

Douglas Dynamics, Inc.
Notes to Consolidated Financial Statements (Continued)
Years ended December 31, 2024, 2023 and 2022
(Dollars in Thousands Except Per Share Data)

F-23
Disaggregation of Revenue

The following table provides information about disaggregated revenue by customer type and timing of revenue
recognition, and includes a reconciliation of the disaggregated revenue with reportable segments.

Revenue by customer type was as follows:

Year Ended December 31, 2024

Work Truck
Attachments
Work Truck
Solutions
Total Revenue
Independent dealer ............................................................................. $
256,010 $
148,409 $
404,419
Government ........................................................................................
-
90,494
90,494
Fleet ....................................................................................................
-
65,892
65,892
Other ...................................................................................................
-
7,699
7,699
Total revenue ...................................................................................... $
256,010 $
312,494 $
568,504

Year Ended December 31, 2023

Work Truck
Attachments
Work Truck
Solutions
Total Revenue
Independent dealer ............................................................................. $
291,723 $
137,134 $
428,857
Government ........................................................................................
-
73,165
73,165
Fleet ....................................................................................................
-
58,562
58,562
Other ...................................................................................................
-
7,594
7,594
Total revenue ...................................................................................... $
291,723 $
276,455 $
568,178

Year Ended December 31, 2022

Work Truck
Attachments
Work Truck
Solutions
Total Revenue
Independent dealer ............................................................................. $
382,296 $
119,900 $
502,196
Government ........................................................................................
-
56,319
56,319
Fleet ....................................................................................................
-
49,094
49,094
Other ...................................................................................................
-
8,459
8,459
Total revenue ...................................................................................... $
382,296 $
233,772 $
616,068

Revenue by timing of revenue recognition was as follows:

Year Ended December 31, 2024

Work Truck
Attachments
Work Truck
Solutions
Total Revenue
Point in time ....................................................................................... $
256,010 $
196,380 $
452,390
Over time ............................................................................................
-
116,114
116,114
Total revenue ...................................................................................... $
256,010 $
312,494 $
568,504

Year Ended December 31, 2023

Work Truck
Attachments
Work Truck
Solutions
Total Revenue
Point in time ....................................................................................... $
291,723 $
178,956 $
470,679
Over time ............................................................................................
-
97,499
97,499
Total revenue ...................................................................................... $
291,723 $
276,455 $
568,178

Year Ended December 31, 2022

Work Truck
Attachments
Work Truck
Solutions
Total Revenue
Point in time ....................................................................................... $
382,296 $
145,022 $
527,318
Over time ............................................................................................
-
88,750
88,750
Total revenue ...................................................................................... $
382,296 $
233,772 $
616,068

Douglas Dynamics, Inc.
Notes to Consolidated Financial Statements (Continued)
Years ended December 31, 2024, 2023 and 2022
(Dollars in Thousands Except Per Share Data)

F-24
Contract Balances

The following table shows the changes in the Company’s contract liabilities during the years ended December 31,
2024 and 2023:

Year Ended December 31, 2024

Balance at
Beginning of
Period

Additions Deductions
Balance at
End of Period
Contract liabilities ........................................................ $
4,009 $
20,205 $
(19,151) $
5,063

Year Ended December 31, 2023

Balance at
Beginning of
Period

Additions Deductions
Balance at
End of Period
Contract liabilities ........................................................ $
4,531 $
21,856 $
(22,378) $
4,009

The Company receives payments from customers based upon contractual billing schedules. Contract assets include
amounts related to the Company's contractual right to consideration for completed performance obligations not yet invoiced.
There were no contract assets as of December 31, 2024 or 2023. Contract liabilities include payments received in advance of
performance under the contract, variable freight allowances which are refunded to the customer, and rebates paid to
distributors under the Company’s municipal rebate program, and are realized with the associated revenue recognized under
the contract.

The Company recognized all of the amount that was included in contract liabilities at the beginning of the period as
revenue in the years ended December 31, 2024 and 2023.

Practical Expedients and Exemptions

As allowed under Topic 606, the Company adopted the following practical expedients and exemptions:

●
The Company generally expenses sales commissions when incurred because the amortization period would have
been less than one year. The Company records these costs within selling, general and administrative expenses.

●
The Company does not disclose the value of unsatisfied performance obligations for (i) contracts with an original
expected length of one year or less and (ii) contracts for which the Company recognizes revenue at the amount to
which it has the right to invoice for services performed.

●
The Company excludes from the transaction price all sales taxes that are assessed by a governmental authority.

●
The Company does not adjust the promised amount of consideration for the effects of a significant financing
component, as it expects at contract inception that the period between the transfer to a promised good or service to
a customer and the customer’s payment for the good or service will be one year or less.

●
The Company accounts for shipping and handling activities that occur after control of the related good transfers as
fulfillment activities instead of assessing such activities as performance obligations.

Douglas Dynamics, Inc.
Notes to Consolidated Financial Statements (Continued)
Years ended December 31, 2024, 2023 and 2022
(Dollars in Thousands Except Per Share Data)

F-25
4. Inventories

Inventories consist of the following:

December 31,

2024

2023

Finished goods................................................................................................................. $
67,897 $
79,509
Work-in-process ..............................................................................................................
13,337
14,384
Truck chassis inventory ...................................................................................................
10,146
1,929
Raw material and supplies ...............................................................................................
45,654
44,568

$
137,034 $
140,390

The inventories in the table above do not include truck chassis inventory financed through a floor plan financing
agreement as discussed in Note 8. The Company takes title to truck chassis upon receipt of the inventory through its floor
plan agreement and performs upfitting service installations to the truck chassis inventory during the installation period. The
floor plan obligation is then assumed by the dealer customer upon delivery. At December 31, 2024 and 2023, the Company
had $2,612 and $2,217 of chassis inventory and related floor plan financing obligation, respectively. The Company
recognizes revenue associated with upfitting and service installations net of the truck chassis.

Douglas Dynamics, Inc.
Notes to Consolidated Financial Statements (Continued)
Years ended December 31, 2024, 2023 and 2022
(Dollars in Thousands Except Per Share Data)

F-26
Unlike the floor plan agreement, the Company does not record inventory related to truck chassis acquired through
the bailment pool agreement as these truck chassis are held on consignment. Like the revenue recognized on floor plan
arrangement, revenue recognized for upfitting services on chassis acquired through the bailment agreement, are also
recognized net of the truck chassis.

5. Property, plant and equipment

During the year ended December 31, 2024, the Company closed on a sale leaseback transaction with an
unrelated third party. Under this transaction, the Company sold seven properties with a combined net book value of
$21,852, see Note 6 for additional information. Property, plant and equipment are summarized as follows:

December 31,

2024

2023

Land................................................................................................................................. $
162 $
3,969
Land improvements .........................................................................................................
140
5,589
Leasehold improvements .................................................................................................
7,028
6,582
Buildings .........................................................................................................................
2,958
36,719
Machinery and equipment ...............................................................................................
82,332
79,065
Furniture and fixtures ......................................................................................................
27,214
25,920
Mobile equipment and other ............................................................................................
5,601
5,287
Construction-in-process...................................................................................................
4,737
5,125
Total property, plant and equipment ...............................................................................
130,172
168,256
Less accumulated depreciation ........................................................................................
(88,861)
(100,916 )
Net property, plant and equipment .................................................................................. $
41,311 $
67,340

Douglas Dynamics, Inc.
Notes to Consolidated Financial Statements (Continued)
Years ended December 31, 2024, 2023 and 2022
(Dollars in Thousands Except Per Share Data)

F-27
6. Leases

The Company has operating leases for manufacturing, upfit and office facilities, land and parking lots, warehousing
space and certain equipment. The leases have remaining lease terms of less than one year to 15 years, some of which include
options to extend the leases for up to 20 years. Such renewal options were not included in the determination of the lease term
unless deemed reasonably certain of exercise. The discount rate used in measuring the lease liabilities is based on the
Company’s interest rate on its secured Term Loan Credit Agreement, adjusted as necessary based on the lease term and the
Company's credit spread. Certain of the Company’s leases contain escalating rental payments based on an index. The
Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

During the year ended December 31, 2024, the Company closed on a sale leaseback transaction with an
unrelated third party. Under this transaction, the Company sold seven properties with a combined net book value of
$21,852 for gross proceeds of $64,150, which was reduced by transaction costs of $5,494 for net cash proceeds of
approximately $58,656. The properties in the sale leaseback transaction are comprised of three facilities located in
Milwaukee, Wisconsin and four additional facilities located in each of Huntley, Illinois; Manchester, Iowa; Rockland, Maine;
and Madison Heights, Michigan, totaling approximately 780,000 square feet of manufacturing and upfitting space. The lease
agreement has an initial term of 15 years, with two optional 10-year renewal options. The Company recognized a gain of
$42,298 on this transaction, which is included in Gain on sale leaseback transaction in the Consolidated Statements of Income.
Right-of-use assets and lease liabilities recognized related to this sale leaseback transaction were $51,879 and $51,879,
respectively.

As allowed under ASC 842, the Company has adopted the following practical expedients:

●
Short-term lease practical expedient

o
Allows the Company not to apply the recognition requirements in ASC 842 to short-term leases for all
asset classes. Short term leases are leases that, at commencement date, have a term of 12 months or
less and do not include an option to purchase the underlying asset that the lessee is reasonably certain
to exercise.

●
Separating lease components practical expedient

o
Allows the Company not to separate lease components from nonlease components for all asset classes
and instead account for each separate lease and the nonlease components associated with that lease
component as a single lease component.

Lease Expense

The components of lease expense, which are included in Cost of sales and Selling, general and administrative
expenses on the Consolidated Statements of Income, were as follows:

Year Ended Year Ended Year Ended

December 31,
2024

December 31,
2023

December 31,
2022

Operating lease expense ..................................................................... $
8,604 $
5,966 $
5,555
Short term lease cost .......................................................................... $
621 $
401 $
395
Total lease cost ................................................................................... $
9,225 $
6,367 $
5,950

Douglas Dynamics, Inc.
Notes to Consolidated Financial Statements (Continued)
Years ended December 31, 2024, 2023 and 2022
(Dollars in Thousands Except Per Share Data)

F-28
Cash Flow

Supplemental cash flow information related to leases is as follows:

Year Ended Year Ended Year Ended

December 31,
2024

December 31,
2023

December 31,
2022

Cash paid for amounts included in the measurement of operating
lease liabilities ................................................................................ $
8,349 $
6,195 $
5,753
Non-cash lease expense - right-of-use assets ..................................... $
6,319 $
5,097 $
4,745
Right-of-use assets obtained in exchange for operating lease
obligations ...................................................................................... $
59,112 $
5,853 $
3,768

Balance Sheet

Supplemental balance sheet information related to leases is as follows:

December 31,
2024

December 31,
2023

Operating Leases

Operating lease right-of-use assets .................................................................................. $
70,801 $
18,008

Other current liabilities ....................................................................................................
7,394
5,347
Operating lease liabilities ................................................................................................
64,785
13,887
Total operating lease liabilities .................................................................................... $
72,179 $
19,234

Weighted Average Remaining Lease Term (in months)

Operating leases ...........................................................................................................
151
53

Weighted Average Discount Rate

Operating leases ...........................................................................................................
7.05%
5.36%

Lease Maturities

Maturities of leases were as follows:

Year ending December 31,

Operating
Leases

2025 ............................................................................................................................................................... $
12,159
2026 ...............................................................................................................................................................
10,788
2027 ...............................................................................................................................................................
8,989
2028 ...............................................................................................................................................................
7,902
2029 ...............................................................................................................................................................
7,102
Thereafter ......................................................................................................................................................
63,864
Total Lease Payments ..........................................................................................................................
110,804
Less: imputed interest ....................................................................................................................................
(38,625)
Total ...................................................................................................................................................... $
72,179

Douglas Dynamics, Inc.
Notes to Consolidated Financial Statements (Continued)
Years ended December 31, 2024, 2023 and 2022
(Dollars in Thousands Except Per Share Data)

F-29
7. Other Intangible Assets

The following is a summary of the Company’s other intangible assets:

Gross

Less

Net

Carrying
Accumulated
Carrying

Amount
Amortization
Amount

December 31, 2024

Indefinite lived intangibles:

Trademark and tradenames ............................................................. $
77,600 $
- $
77,600
Amortizable intangibles:

Dealer network................................................................................
80,000
80,000
-
Customer relationships ...................................................................
80,920
47,876
33,044
Patents .............................................................................................
21,136
19,506
1,630
Noncompete agreements .................................................................
8,640
8,640
-
Trademarks .....................................................................................
5,459
4,183
1,276
Amortizable intangibles, net ...............................................................
196,155
160,205
35,950
Total ................................................................................................... $
273,755 $
160,205 $
113,550

Gross

Less

Net

Carrying
Accumulated
Carrying

Amount
Amortization
Amount

December 31, 2023

Indefinite lived intangibles:

Trademark and tradenames ............................................................. $
77,600 $
- $
77,600
Amortizable intangibles:

Dealer network................................................................................
80,000
79,000
1,000
Customer relationships ...................................................................
80,920
42,707
38,213
Patents .............................................................................................
21,136
18,249
2,887
Noncompete agreements .................................................................
8,640
8,640
-
Trademarks .....................................................................................
5,459
4,089
1,370
Amortizable intangibles, net ...............................................................
196,155
152,685
43,470
Total ................................................................................................... $
273,755 $
152,685 $
121,070

Douglas Dynamics, Inc.
Notes to Consolidated Financial Statements (Continued)
Years ended December 31, 2024, 2023 and 2022
(Dollars in Thousands Except Per Share Data)

F-30
Amortization expense for intangible assets was $7,520, $10,520 and $10,520 for the years ended December 31,
2024, 2023 and 2022, respectively. Estimated amortization expense for the next five years is as follows:

The weighted average remaining life for intangible assets is 6.4 years at December 31, 2024.

8. Long-Term Debt

Long-term debt is summarized below:

December 31,

2024

2023

Term Loan, net of debt discount of $162 and $274 at December 31, 2024 and
December 31, 2023, respectively ................................................................................. $
147,526 $
189,413
Less current maturities ....................................................................................................
-
6,762
Long term debt before deferred financing costs ..............................................................
147,526
182,651
Deferred financing costs, net ...........................................................................................
847
1,160
Long term debt, net ......................................................................................................... $
146,679 $
181,491

The scheduled maturities on long term debt at December 31, 2024, are as follows:

$
147,526

On January 5, 2023, the Company entered into Amendment No. 1 to Credit Agreement and Revolving Credit
Commitment Increase Supplement (“Amendment No. 1”) by and among the Company, the Borrowers, the financial
institutions listed in Amendment No. 1 as lenders, and JPMorgan Chase Bank, N.A., as administrative agent, which amended
the Credit Agreement, dated as of June 9, 2021 (as amended by Amendment No. 1, the “Credit Agreement”), and pursuant
to which, among other things, (i) the Revolving Loan Borrowers exercised a portion of the Revolving Commitment Increase
Option (as defined below) and increased the revolving commitment under the Credit Agreement by $50,000 for a total of
$150,000 in the aggregate and (ii) the London Interbank Offered Rate pricing option under the Credit Agreement was replaced
with a Term SOFR Rate pricing option. Deferred financing costs of $334 are being amortized over the term of the loan.
On July 11, 2023, the Company entered into Amendment No. 2 to the Credit Agreement, which allows the Company to take
out loans of up to $1,000 against its corporate-owned life insurance policies as included in Non-qualified benefit plan assets
on the Condensed Consolidated Balance Sheets. Pursuant to Amendment No. 2, the Company had outstanding loans of
$546 and $750 against its corporate-owned life insurance policies as of December 31, 2024 and 2023, respectively, included
in Other long-term liabilities on the Consolidated Balance Sheets. On January 29, 2024, the Company entered into
Amendment No. 3 to the Credit Agreement, which modifies the minimum required Leverage Ratio (as defined in the Credit
Agreement) of the Company, which is measured as of the last day of each Reference Period (as defined in the Credit
Agreement), from 3.50 to 1.00 for each Reference Period to (i) 3.50 to 1.00 for each Reference Period ending on or prior to
September 30, 2023, (ii) 4.25 to 1.00 for the Reference Period ending on December 31, 2023, (iii) 4.00 to 1.00 for each
Reference Period ending on March 31, 2024 and June 30, 2024, and (iv) 3.50 to 1.00 for each Reference Period ending on
September 30, 2024 and thereafter.

Douglas Dynamics, Inc.
Notes to Consolidated Financial Statements (Continued)
Years ended December 31, 2024, 2023 and 2022
(Dollars in Thousands Except Per Share Data)

F-31
The Company is required to pay a fee for unused amounts under the senior secured revolving facility in an amount
ranging from 0.150% to 0.300% of the average daily unused portion of the senior secured revolving credit facility, depending
on Douglas Dynamics, L.L.C.'s ("DDI LLC") Leverage Ratio (as defined in the Credit Agreement). The Credit Agreement
provides that the senior secured term loan facility will bear interest at (i) the Term SOFR Rate for the applicable interest
period plus (ii) a margin ranging from 1.375% to 2.00%, depending on the DDI LLC’s Leverage Ratio. The Credit Agreement
provides that the Revolving Loan Borrowers have the option to select whether the senior secured revolving credit facility
borrowings will bear interest at either (i)(a) the Term SOFR Rate for the applicable interest period plus (b) 0.10% plus (c) a
margin ranging from 1.375% to 2.00%, depending on DDI LLC’s Leverage Ratio, or (ii) a margin ranging from 0.375%
to 1.00% per annum, depending on DDI LLC’s Leverage Ratio, plus the greatest of (which if the following would be less
than 1.00%, such rate shall be deemed to be 1.00%) (a) the Prime Rate (as defined in the Credit Agreement) in effect on such
day, (b) the NYFRB Rate (as defined in the Credit Agreement) plus 0.50% and (c) the Term SOFR Rate for a one month
interest plus 0.10% (the “Adjusted Term SOFR Rate”). If the Adjusted Term SOFR Rate for the applicable interest period is
less than zero, such rate shall be deemed to be zero for purposes of calculating the foregoing interest rates in the Credit
Agreement.

Following Amendment No. 1, the Credit Agreement provides for a senior secured term loan in the amount of
$225,000 and a senior secured revolving credit facility in the amount of $150,000, of which $10,000 will be available in the
form of letters of credit and $15,000 will be available for the issuance of short-term swingline loans. The Credit Agreement
also allows the Company to request increases to the revolving commitments and/or incremental term loans in an aggregate
amount not in excess of $175,000 (the "Revolving Commitment Increase Option"), subject to specified terms and conditions.
The final maturity date of the Credit Agreement is June 9, 2026. The Company applied the proceeds of the senior secured
term loan facility under the Credit Agreement to refinance its existing senior secured term loan and revolving credit facilities
and for the payment of transaction consideration and expenses in connection with the Credit Agreement.

The Credit Agreement was issued at a $563 discount which is being amortized over the term of the term loan.
Additionally, deferred financing costs of $1,409 are being amortized over the term of the loan. The Company’s entrance into
the Credit Agreement and subsequent settlement of its prior credit agreements is accounted for as an extinguishment of the
Company’s prior debt under ASC 470-50, which resulted in the write off of unamortized capitalized deferred financing costs
of $972 as well as the write off of unamortized debt discount of $3,964, resulting in a loss on extinguishment of debt of
$4,936 in the Consolidated Statement Operations and Comprehensive Income for the year ended December 31, 2021.

At December 31, 2024, the Company had outstanding borrowings under the term loan of $147,526, $0 in outstanding
borrowings on the revolving credit facility and remaining borrowing availability of $149,450. During the year
ended December 31, 2024, the Company made a pre-payment of $42,000 of debt amortization principal payments under its
Credit Agreement using a portion of the proceeds from the sale leaseback transaction, as described in Note 6. During the year
ended December 31, 2023, the Company made a voluntary pre-payment of $10,000 of debt amortization principal
payments under the Company's Credit Agreement.

The Credit Agreement includes customary representations, warranties and negative and affirmative covenants, as
well as customary events of default and certain cross default provisions that could result in acceleration of the Credit
Agreement. In addition, as a result of the modifications to the minimum required Leverage Ratio under Amendment No. 3 to
the Credit Agreement as discussed above, the Credit Agreement requires the Company to have a Leverage Ratio of
(i) 3.50 to 1.00 for each Reference Period ending on or prior to September 30, 2023, (ii) 4.25 to 1.00 for the Reference Period
ending on December 31, 2023, (iii) 4.00 to 1.00 for each Reference Period ending on March 31, 2024 and June 30,
2024, and (iv) 3.50 to 1.00 for each Reference Period ending on September 30, 2024 and thereafter, and to have a
Consolidated Interest Coverage Ratio (as defined in the Credit Agreement) of not less than 3.00 to 1.00 as of the last day of
any fiscal quarter commencing with the fiscal quarter ending June 30, 2021. As of December 31, 2024, the Company is in
compliance with the respective covenants.

Douglas Dynamics, Inc.
Notes to Consolidated Financial Statements (Continued)
Years ended December 31, 2024, 2023 and 2022
(Dollars in Thousands Except Per Share Data)

F-32
On June 13, 2019, the Company entered into an interest rate swap agreement to reduce its exposure to interest rate
volatility. The interest rate swap has a notional amount of $175,000 effective for the period May 31, 2019 through May 31,
2024. The Company may have counterparty credit risk resulting from the interest rate swap, which it monitors on an on-going
basis. The risk lies with one global financial institution. Under the interest rate swap agreement, the Company will either
receive or make payments on a monthly basis based on the differential between 2.424% and SOFR. The interest rate swap
was previously accounted for as a cash flow hedge. During the first quarter of 2020, the swap was determined to be ineffective.
As a result, the swap was dedesignated on March 19, 2020, and the remaining losses included in Accumulated other
comprehensive income (loss) on the Consolidated Balance Sheets would be amortized into interest expense on a straight line
basis through the life of the swap. The amount amortized from Accumulated other comprehensive income (loss) into earnings
during the years ended December 31, 2024 and 2023 was ($485) and ($1,163), respectively. A mark-to-market adjustment of
$198 and $476 was recorded as Interest expense in the Consolidated Statements of Income for the years ended December 31,
2024 and 2023, respectively, related to the swap.

On June 9, 2021, in conjunction with entering into the Credit Agreement described above, the Company re-
designated its swap. As a result, the swap will be recorded at fair value with changes recorded in Accumulated other
comprehensive income (loss). The amortization from Accumulated other comprehensive income (loss) into earnings from
the previous dedesignation has been adjusted as of June 9, 2021 to include the de-recognition of previously recognized mark-
to-market gains and the amortization of the off-market component as of the re-designation date, and will continue to be
recognized through the life of the swap. As of December 31, 2024, the amount in Accumulated other comprehensive income
has been fully amortized into earnings.

The interest rate swaps' positive fair value at December 31, 2024 was $2,340, of which $1,712 and $628 are included
in Prepaid and other current assets and Other long-term assets on the Consolidated Balance Sheet, respectively. The interest
rate swap’s positive fair value at December 31, 2023 was $4,033, of which $3,174 and $859 are included in Prepaid and other
current assets and Other long-term assets on the Consolidated Balance Sheet, respectively.

On December 17, 2024, the Company entered into a steel hedging agreement to reduce its exposure to commodity
price swings. The steel hedging instrument has a notional quantity of 3,000 short tons and is effective for the period August
1, 2025 through December 31, 2025, which the Company expects to be slightly less than half of its exposure during the
effective period. Under the steel hedge agreement, the Company will make fixed payments of $819 per short ton for the Steel
Hot Rolled Coil (HRC) commodity. The steel hedging instrument is accounted for as a cash flow hedge. The steel hedging
instrument's negative fair value at December 31, 2024 was $54, which is included in Accrued expenses and other current
liabilities on the Consolidated Balance Sheet.

The Company receives on consignment, truck chassis on which it performs upfitting service installations under
“bailment pool” arrangements with major truck manufacturers. The Company never receives title to the truck chassis. The
aggregate value of all bailment pool chassis on hand as of December 31, 2024 and 2023 was $17,489 and $20,293,
respectively. The Company is responsible to the manufacturer for interest on chassis held for upfitting. Interest rates vary
depending on the number of days in the bailment pool. As of December 31, 2024, rates were based on prime (7.50% at
December 31, 2024) plus a margin ranging from 0% to 8%. During 2024, the Company incurred $630 in interest on the
bailment pool arrangement. During 2023, the Company incurred $344 in interest on the bailment pool arrangement.

The Company has a floor plan line of credit for up to $5,000 with a financial institution. The current terms of the
line of credit are contained in a credit agreement dated July 15, 2016 and expired on July 31, 2017, which the Company
renewed through February 28, 2025. Under the floor plan agreement, the Company receives truck chassis and title on
upfitting service installations. Upon upfit completion, the title transfers from the Company to the dealer customer. The note
bears interest at an adjusted SOFR rate, plus an applicable rate of 1.75%. The obligation under the floor plan agreement as of
December 31, 2024 and 2023 is $2,612 and $2,217, respectively. During 2024, the Company incurred $1,011 in interest on
the floor plan arrangements. During 2023, the Company incurred $734 in interest on the floor plan arrangements.

Douglas Dynamics, Inc.
Notes to Consolidated Financial Statements (Continued)
Years ended December 31, 2024, 2023 and 2022
(Dollars in Thousands Except Per Share Data)

F-33
9. Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities are summarized as follows:

December 31,

2024

2023

Payroll and related costs .................................................................................................. $
9,876 $
5,772
Employee benefits ...........................................................................................................
6,391
7,937
Accrued warranty ............................................................................................................
3,379
4,068
Other ................................................................................................................................
6,536
8,040

$
26,182 $
25,817

10. Warranty Liability

The Company accrues for estimated warranty costs as sales are recognized and periodically assesses the adequacy
of its recorded warranty liability and adjusts the amount as necessary. The Company’s warranties generally provide, with
respect to its snow and ice control equipment, that all material and workmanship will be free from defect for a period of one
to two years after the date of purchase by the end-user, and with respect to its parts and accessories purchased separately, that
such parts and accessories will be free from defect for a period of one year after the date of purchase by the end-user. Certain
snowplows only provide for a one year warranty. The Company determines the amount of the estimated warranty costs (and
its corresponding warranty reserve) using the expected value method, and is based on the Company’s prior five years of
warranty history utilizing a formula driven by historical warranty expense and applying management’s judgment. The
Company adjusts its historical warranty costs to take into account unique factors such as the introduction of new products
into the marketplace that do not provide a historical warranty record to assess. All of the Company’s warranties are assurance-
type warranties. The warranty reserve is $5,559 at December 31, 2024 of which $2,180 is included in Other long-term
liabilities and $3,379 is included in Accrued expenses and other current liabilities in the accompanying Consolidated Balance
Sheet. At December 31, 2023, the warranty reserve is $6,957 of which $2,889 is included in Other long term liabilities and
$4,068 is included in Accrued expenses and other current liabilities in the accompanying Consolidated Balance Sheet.

The following is a rollforward of the Company’s warranty liability:

December 31,

2024

2023

2022

Balance at the beginning of the period ...............................................
6,957
7,876
6,368
Warranty provision .............................................................................
1,670
2,684
4,835
Claims paid/settlements ......................................................................
(3,068)
(3,603)
(3,327)
Balance at the end of the period .........................................................
5,559
6,957
7,876

Douglas Dynamics, Inc.
Notes to Consolidated Financial Statements (Continued)
Years ended December 31, 2024, 2023 and 2022
(Dollars in Thousands Except Per Share Data)

F-34
11. Income Taxes

The provision for income tax expense consists of the following:

Year ended December 31

2024

2023

2022

Current:

Federal ............................................................................................ $
18,176 $
(2,854 ) $
10,515
State ................................................................................................
2,606
804
1,505

20,782
(2,050 )
12,020
Deferred:

Federal ............................................................................................
(2,617)
7,709
(2,187)
State ................................................................................................
(425)
(148 )
(1,081)

(3,042)
7,561
(3,268)

$
17,740 $
5,511 $
8,752

A reconciliation of income tax expense computed at the federal statutory rate to the provision for income taxes for
the years ended December 31, 2024, 2023 and 2022 is as follows:

2024

2023

2022

Federal income tax expense at statutory rate ...................................... $
15,517 $
6,139 $
9,946
State taxes, net of federal benefit .......................................................
2,295
762
1,445
Valuation allowance ...........................................................................
(495)
(67 )
(1,202)
Change in uncertain tax positions, net ................................................
540
225
356
Research and development credit .......................................................
(704)
(1,012 )
(1,333)
Investment tax credit ..........................................................................
-
(682 )
-
State rate change .................................................................................
(165)
92
(168)
Other ...................................................................................................
752
54
(292)

$
17,740 $
5,511 $
8,752

Douglas Dynamics, Inc.
Notes to Consolidated Financial Statements (Continued)
Years ended December 31, 2024, 2023 and 2022
(Dollars in Thousands Except Per Share Data)

F-35
Significant components of the Company’s deferred tax liabilities and assets are as follows:

December 31,

2024

2023

Deferred tax assets:

Allowance for doubtful accounts ................................................................................. $
588 $
413
Inventory reserves ........................................................................................................
1,749
1,468
Warranty liability .........................................................................................................
1,343
1,690
Deferred compensation ................................................................................................
2,237
2,124
Pension and retiree health benefit obligations .............................................................
866
1,225
Accrued vacation .........................................................................................................
844
1,137
Research expenditures .................................................................................................
6,723
5,842
Operating lease liabilities .............................................................................................
17,625
4,730
Net operating losses .....................................................................................................
1,194
1,663
Other accrued liabilities ...............................................................................................
4,550
4,376
State credit carryforwards ............................................................................................
1,060
1,032
Other ............................................................................................................................
338
404
Valuation allowance ....................................................................................................
(1,510)
(2,005 )
Total deferred tax assets ..................................................................................................
37,607
24,099
Deferred tax liabilities:

Interest rate swaps ........................................................................................................
(573)
(994 )
Tax deductible goodwill and other intangibles ............................................................
(37,125)
(35,974 )
Accelerated depreciation ..............................................................................................
(6,754)
(9,924 )
Operating leases - right of use assets ...........................................................................
(17,289)
(4,430 )
Other ............................................................................................................................
(440)
(680 )
Total deferred tax liabilities ............................................................................................
(62,181)
(52,002 )
Net deferred tax liabilities ............................................................................................... $
(24,574) $
(27,903 )

Deferred income tax balances reflect the effects of temporary differences between the carrying amount of assets and
liabilities and their tax bases and are stated at enacted tax rates expected to be in effect when taxes are actually paid or
recovered.

Douglas Dynamics, Inc.
Notes to Consolidated Financial Statements (Continued)
Years ended December 31, 2024, 2023 and 2022
(Dollars in Thousands Except Per Share Data)

F-36
State operating loss carry forwards for tax purposes will result in future tax benefits of approximately $906. These
loss carry-forwards began to expire in 2021. The Company evaluated the need to maintain a valuation allowance against
certain deferred tax assets. Based on this evaluation, which included a review of recent profitability, future projections of
profitability, and future deferred tax liabilities, the Company concluded that a valuation allowance of approximately $1,222 is
necessary at December 31, 2024 for the state net operating loss carry-forwards which are likely to expire prior to the
Company's ability to use the tax benefit. The Company also carries a valuation allowance for approximately $288 related to
non-state net operating loss carry-forwards which are likely to expire prior to the Company’s ability to use the tax benefit.

A reconciliation of the beginning and ending liability for uncertain tax positions is as follows:

2024

2023

2022

Balance at beginning of year .............................................................. $
1,701 $
1,519 $
1,214
Increases for tax positions taken in the current year ...........................
681
277
350
Increases for tax positions taken in prior years ..................................
951
-
-
Decreases due to lapses in the statute of limitations ...........................
(828)
(95 )
(45)
Balance at the end of year .................................................................. $
2,505 $
1,701 $
1,519

The amount of the unrecognized tax benefits that would affect the effective tax rate, if recognized, was
approximately $2,505 at December 31, 2024. The Company recognizes interest and penalties related to the unrecognized tax
benefits in income tax expense. Approximately $567 and $662 of accrued interest and penalties is reported as an income tax
liability at December 31, 2024 and 2023, respectively. The liability for unrecognized tax benefits is reported in Other
long-term liabilities on the Consolidated Balance Sheets at December 31, 2024 and 2023.

The Company files income tax returns in the United States (federal) and various states. Tax years open to
examination by tax authorities under the statute of limitations include 2021, 2022 and 2023 for Federal and 2020 through
2023 for most states. Tax returns for the 2024 tax year have not yet been filed.

Beginning in 2022, the Tax Cuts and Jobs Act of 2017 eliminated the option to deduct research and development
expenditures in the year incurred and required taxpayers to amortize them over a period of five years for tax purposes. This
mandatory capitalization requirement increases the Company's deferred tax assets and cash tax liabilities.

12. Employee Retirement Plans

Postretirement benefits

The Company provides postretirement healthcare benefits for certain employee groups. The postretirement
healthcare plans are contributory and contain certain other cost-sharing features such as deductibles and coinsurance. The
plans are unfunded. Employees do not vest until they retire from active employment with the Company and have at least
twelve years of service. These benefits can be amended or terminated at any time and are subject to the same ongoing changes
as the Company’s healthcare benefits for employees with respect to deductible, co-insurance and participant contributions.
Postretirement benefits of $3,319 and $4,692 as of December 31, 2024 and December 31, 2023, respectively, are included in
Retiree benefits and deferred compensation in the Consolidated Balance Sheets. Postretirement benefits of $220 and $280 as
of December 31, 2024 and December 31, 2023, respectively, are included in Accrued expenses and other current liabilities
in the Consolidated Balance Sheets.

Douglas Dynamics, Inc.
Notes to Consolidated Financial Statements (Continued)
Years ended December 31, 2024, 2023 and 2022
(Dollars in Thousands Except Per Share Data)

F-37
Effective January 1, 2004, the postretirement healthcare benefits were extended to all active employees of the
Company as of December 31, 2003. The period of coverage was reduced and the retiree contribution percentage was increased
in order to keep the cost of the plan equivalent to the previous plan design.

Maximum coverage under the plan is limited to ten years. All benefits terminate upon the death of the retiree.
Employees who began working for the Company after December 31, 2003, are not eligible for postretirement healthcare
benefits.

The reconciliation of the beginning and ending balances of the projected benefit obligation for the Company
consisted of the following:

December 31,

2024

2023

Change in projected benefit obligation:

Benefit obligation at beginning of year ....................................................................... $
4,972 $
5,470
Service cost ..................................................................................................................
63
77
Interest cost ..................................................................................................................
229
266
Participant contributions ..............................................................................................
82
70
Changes in actuarial assumptions ................................................................................
(1,154)
(360 )
Benefits paid ................................................................................................................
(653)
(551 )
Projected benefit obligation at end of year ...................................................................... $
3,539 $
4,972
Amounts recognized in the consolidated balance sheets consisted of:

Accrued expenses and other current liabilities ............................................................ $
220 $
280
Retiree health benefit obligation ..................................................................................
3,319
4,692

$
3,539 $
4,972

The components of postretirement healthcare benefit cost consisted of the following for the year ended December 31,

2024

2023

2022

Components of net postretirement health benefit cost:

Service cost ..................................................................................... $
63 $
77 $
115
Interest cost .....................................................................................
229
266
153
Amortization of net gain .................................................................
(514)
(539 )
(400)
Net postretirement healthcare benefit cost ......................................... $
(222) $
(196 ) $
(132)

Douglas Dynamics, Inc.
Notes to Consolidated Financial Statements (Continued)
Years ended December 31, 2024, 2023 and 2022
(Dollars in Thousands Except Per Share Data)

F-38
The assumed discount and healthcare cost trend rates are summarized as follows:

Year Ended December 31,

2024

2023

2022

Discount rate .....................................................................................
4.7%
5.0%
2.5%
Immediate healthcare cost trend rate .................................................
*
**
***
Ultimate healthcare cost trend rate ....................................................
4.5
4.5
4.5
Assumed annual reduction in trend rate ............................................
*
**
***
Participation ......................................................................................
60
60
60

*
Health Care Cost Trend rate is assumed to be 8.5% beginning in 2024 gradually reducing to an ultimate rate of 4.5% in
2033.

** Health Care Cost Trend rate is assumed to be 7.5% beginning in 2023 gradually reducing to an ultimate rate of 4.5% in
2032.

*** Health Care Cost Trend rate is assumed to be 7.5% beginning in 2022 gradually reducing to an ultimate rate of 4.5% in
2031.

The discount rate used to determine the benefit obligation at December 31, 2024 and 2023 is 5.3% and 4.7%,
respectively. For December 31, 2024, the health care cost trend rate is assumed to be 8.5% beginning in 2024 gradually
reducing to an ultimate rate of 4.5% in 2033. For December 31, 2023, the health care cost trend rate is assumed to be
7.5% beginning in 2023 gradually reducing to an ultimate rate of 4.5% in 2032. For December 31, 2022, the health care cost
trend rate is assumed to be 7.5% beginning in 2022 gradually reducing to an ultimate rate of 4.5% in 2031.

No actuarial gains (losses) remain in accumulated other comprehensive income related to pension due to the
termination of the plans. The amount included in accumulated other comprehensive income, net of tax, at December 31, 2024,
which has not yet been recognized in net periodic OPEB cost was a net actuarial gain of $3,676.

Defined contribution plan

The Company has a defined contribution plan, which qualifies under Section 401(k) of the Internal Revenue Code
and provides substantially all employees an opportunity to accumulate personal funds for their retirement. Contributions are
made on a before-tax basis to the plan and are invested, at the employees’ direction, among a variety of investment alternatives
including, commencing January 1, 2013, a Company common stock fund designated as an employee stock ownership plan.

As determined by the provisions of the plan, the Company matches a portion of the employees’ basic voluntary
contributions. The Company matching contributions to the plan were approximately $4,836, $5,172 and $4,999 for the years
ended December 31, 2024, 2023 and 2022, respectively. The Company made non-discretionary employer contributions of
$0, $0 and $0 in the years ended December 31, 2024, 2023 and 2022, respectively.

Non-qualified plan

The Company also maintains a supplemental non-qualified plan for certain officers and other key employees.
Expense for this plan was $204, $222 and $378 for the years ended December 31, 2024, 2023 and 2022, respectively. The
amount accrued was $10,297, $9,229 and $9,420 as of December 31, 2024, 2023 and 2022, respectively and is included in
Retiree benefits and deferred compensation on the Consolidated Balance Sheets. Amounts were determined based on the fair
value of the liability at December 31, 2024, 2023 and 2022, respectively. The Company holds assets that are substantially
equivalent to the liability and are intended to fund the liability. Non-qualified plan assets of $10,482 and $9,195 at December
31, 2024 and December 31, 2023, respectively, are included as Non-qualified benefit plan assets on the Consolidated Balance
Sheets. The Company had outstanding loans of $546 and $750 against its corporate-owned life insurance policies as
of December 31, 2024 and December 31, 2023, respectively, included in Other long-term liabilities on the Consolidated
Balance Sheets, see Note 8 for additional information.

Douglas Dynamics, Inc.
Notes to Consolidated Financial Statements (Continued)
Years ended December 31, 2024, 2023 and 2022
(Dollars in Thousands Except Per Share Data)

F-39
13. Stock Based Compensation

2010 Stock Incentive Plan and 2024 Stock Incentive Plan

In May 2010, the Company’s Board of Directors and stockholders adopted the 2010 Stock Incentive Plan (the “2010
Plan”). The material terms of the performance goals under the 2010 Plan, as amended and restated, were approved by
stockholders at the Company’s 2014 annual meeting of stockholders and the plan’s term was extended further by the
stockholders at the Company’s 2020 annual meeting of stockholders. The 2010 Plan provided for the issuance of nonqualified
stock options, incentive stock options, stock appreciation rights, restricted stock awards and restricted stock units, any of
which may have been performance-based, and for incentive bonuses, which may have been paid in cash or stock or a
combination of both, to eligible employees, officers, non-employee directors and other service providers to the Company and
its subsidiaries. A maximum of 2,130,000 shares of common stock were available for issuance pursuant to all awards under
the 2010 Plan prior to the time that the 2010 Plan was suspended, as described below.

In February 2024, the Company’s Board of Directors adopted the 2024 Stock Incentive Plan (the “2024 Plan”),
which was subsequently approved by stockholders in April 2024. The 2024 Plan provides for the issuance of nonqualified
stock options, stock appreciation rights, restricted stock awards and restricted stock units, any of which may be performance-
based, and for incentive bonuses, which may be paid in cash or stock or a combination of both, to eligible employees, officers,
non-employee directors and other service providers to the Company and its subsidiaries. A maximum of 1,277,660 shares of
common stock may be issued pursuant to all awards under the 2024 Plan. At the time that the stockholders approved
the 2024 Plan, it replaced the 2010 Plan, and no further awards may be issued under the 2010 Plan. Awards that remain
outstanding under the 2010 Plan will remain outstanding under the 2010 Plan in accordance with their terms. As of December
31, 2024, the Company had 882,091 shares of common stock available for future issuance of awards under the 2024 Plan.
The shares of common stock to be issued under the 2024 Plan will be made available from authorized and unissued Company
common stock.

Restricted Stock Units

Restricted stock units (“RSUs”) are granted to both non-employee directors and management. Prior to 2013, RSUs
were only issued to directors. However, in 2013, the Company changed the timing and form of management’s annual stock
grants and began to grant RSUs to management. RSUs do not carry voting rights. While all non-employee director RSUs
participate in dividend equivalents, there are two classes of management RSUs, one that participates in dividend equivalents,
and a second that does not participate in dividend equivalents. Each RSU represents the right to receive one share of the
Company’s common stock and is subject to time based vesting restrictions. Participants are not required to pay any
consideration to the Company at either the time of grant of a RSU or upon vesting.

Equity awards issued to management under either the 2010 Plan or the 2024 Plan include a retirement provision
under which members of management who either (1) are age 65 or older or (2) have at least ten years of service and are at
least age 55 will continue to vest in unvested RSUs upon retirement. The retirement provision also stipulates that the employee
remain employed by the Company for six months after the first day of the fiscal year of the grant. As the retirement provision
does not qualify as a substantive service condition, the Company incurred $2,457, $1,887 and $3,724 in additional expense
related to each year's grant in the years ended December 31, 2024, 2023 and 2022, respectively, as a result of accelerated
stock based compensation expense for employees who meet the thresholds of the retirement provision. In 2013, the
Company’s nominating and governance committee approved a retirement provision for the RSUs issued to non-employee
directors that accelerates the vesting of such awards upon retirement. Such awards are fully expensed immediately upon grant
in accordance with ASC 718, as the retirement provision eliminates substantive service conditions associated with the awards.

Douglas Dynamics, Inc.
Notes to Consolidated Financial Statements (Continued)
Years ended December 31, 2024, 2023 and 2022
(Dollars in Thousands Except Per Share Data)

F-40
A summary of RSU activity for the years ended December 31, 2024, 2023 and 2022 is as follows:

Weighted

Average

Grant

Remaining

Date

Contractual

Fair value
Term (in years)

Unvested at December 31, 2021 ...............................................
79,903
48.87
1.91
Granted .....................................................................................
117,969
36.70
1.27
Vested .......................................................................................
(79,265)
40.80

Cancelled and forfeited ............................................................
(7,343)
46.15

Unvested at December 31, 2022 ...............................................
111,264
41.89
1.76
Granted .....................................................................................
155,695
36.83
1.70
Vested .......................................................................................
(79,592)
44.47

Cancelled and forfeited ............................................................
(4,144)
38.74

Unvested at December 31, 2023 ...............................................
183,223
36.54
1.72
Granted .....................................................................................
336,685
27.66
1.69
Vested .......................................................................................
(134,934)
38.54

Cancelled and forfeited ............................................................
(10,636)
29.69

Unvested at December 31, 2024 ...............................................
374,338 $
28.02
1.74

Expected to vest in the future at December 31, 2024 ...............
363,579 $
28.02
1.74

The Company recognized $5,747, $3,700 and $2,947 of compensation expense related to the RSU awards in the
years ended December 31, 2024, 2023 and 2022, respectively. The unrecognized compensation expense, net of expected
forfeitures, calculated under the fair value method for shares that were, as of December 31, 2024, expected to be earned
through the requisite service period was approximately $4,325 and is expected to be recognized through 2027.

For grants to non-employee directors, vesting occurs as of the grant date. Vested director RSUs are “settled” by the
delivery to the participant or a designated brokerage firm of one share of common stock per vested RSU as soon as reasonably
practicable following a termination of service of the participant that constitutes a separation from service, or as soon as
reasonably practicable upon grant if such election is made by the non-employee director, and in all events no later than the
end of the calendar year in which such termination of service occurs or, if later, two and one-half months after such
termination of service. Vested management RSU’s are “settled” by the delivery to the participant or a designated brokerage
firm of one share of common stock per vested RSU as soon as reasonably practicable following vesting.

Performance Share Unit Awards

The Company granted performance share units as performance based awards under the 2010 Plan in the first quarter
of 2024, 2023 and 2022 that are subject to performance conditions over a three year performance period beginning in the year
of the grant and, beginning with the 2024 grant, includes three 1-year measurement periods, as well as a vesting component
based on a Total Shareholder Return ("TSR") modifier tied to the Company's relative total shareholder return in comparison
to the total shareholder return of the S&P Small Cap 600 Industrials market index. The total number of shares issued pursuant
to performance share units may be increased, decreased, or unchanged based on this TSR modifier. Upon meeting the
prescribed performance conditions, employees will be issued shares which vest immediately at the end of the performance
period. Currently the Company expects participants to earn 23,610, 0 and 13,853 shares related to the 2024, 2023 and 2022
performance share grants, respectively. In accordance with ASC 718, such awards are being expensed over the vesting period
from the date of grant through the requisite service period, based upon the most probable outcome. In the first quarter of 2024
there were 29,810 performance share units that converted into RSUs related to the 2021 performance share grants. For
the 2024 grants, a Monte Carlo simulation has been used to account for the TSR market condition in the grant date fair value
of the award, which was $26.60 per share. The fair value per share of the awards granted in 2023 and 2022 is the closing
stock price on the date of grant, which was $37.36 and $37.57, respectively.

Douglas Dynamics, Inc.
Notes to Consolidated Financial Statements (Continued)
Years ended December 31, 2024, 2023 and 2022
(Dollars in Thousands Except Per Share Data)

F-41
The Company recognized ($887), ($2,747) and $3,783 of compensation expense related to the awards in the years
ended December 31, 2024, 2023 and 2022, respectively. The unrecognized compensation expense calculated under the fair
value method for shares that were, as of December 31, 2024, expected to be recognized through the requisite service period
was $209 and is expected to be recognized through 2027.

14. Earnings Per Share

Basic earnings per share of common stock is computed by dividing net income attributable to common shareholders
by the weighted average number of common shares outstanding during the period. Diluted earnings per share reflects the
potential dilution that could occur if securities or other contracts to issue common stock were exercised into common stock
or resulted in the issuance of common stock that then shared in the earnings of the Company. As the Company has granted
certain equity awards that both participate in dividend equivalents and do not participate in dividend equivalents, the
Company has calculated earnings per share pursuant to the two-class method, which is an earnings allocation formula that
determines earnings per share for common stock and participating securities according to dividends declared and participation
rights in undistributed earnings. All outstanding nonvested shares that contain non-forfeitable rights to dividends or dividend
equivalents that participate in undistributed earnings with common stock are considered participating securities and are
included in computing earnings per share pursuant to the two-class method. Potential common shares in the diluted earnings
per share computation are excluded to the extent that they would be anti-dilutive.

2024

2023

2022

Basic earnings per common share

Net income ................................................................................... $
56,151 $
23,723 $
38,609
Less: Distributed and undistributed earnings allocated to
nonvested shares .......................................................................
1,083
528
741
Net income allocated to common shareholders ............................ $
55,068 $
23,195 $
37,868
Weighted average common shares outstanding ............................
23,072,993
22,962,591
22,915,543

$
2.39 $
1.01 $
1.65
Diluted earnings per common share

Net income allocated to common shareholders - basic ................ $
55,068 $
23,195 $
37,868
Add: Undistributed earnings allocated to nonvested
shareholders ..............................................................................
527
-
-
Net income allocated to common shareholders - diluted .............. $
55,595 $
23,195 $
37,868
Weighted average common shares outstanding - basic ................
23,072,993
22,962,591
22,915,543
Dilutive effect of participating securities .....................................
436,983
-
-
Weighted average common shares outstanding - diluted .............
23,509,976
22,962,591
22,915,543

$
2.36 $
0.98 $
1.63

15. Commitments and Contingencies

In the ordinary course of business, the Company is engaged in various litigation including product liability and
intellectual property disputes. However, the Company does not believe that any pending litigation will have a material adverse
effect on its consolidated financial position, consolidated results of operations or liquidity. In addition, the Company is not
currently a party to any environmental-related claims or legal matters.

Douglas Dynamics, Inc.
Notes to Consolidated Financial Statements (Continued)
Years ended December 31, 2024, 2023 and 2022
(Dollars in Thousands Except Per Share Data)

F-42
16. Segments

The Company’s chief operating decision maker is its Chief Operating Officer. The chief operating decision maker
assesses performance for the Work Truck Attachments and Work Truck Solutions segments and decides how to allocate
resources based on Adjusted EBITDA. The chief operating decision maker uses Adjusted EBITDA to evaluate profit
generated by the segments in deciding where to reinvest profits, whether it be within the segments or for other purposes such
as paying dividends, repurchasing stock, or other general corporate uses. The chief operating decision maker also uses
segment Adjusted EBITDA as a metric in benchmarking performance against competitors, as well as in evaluating the
compensation of certain employees.

The Company’s two current reportable business segments are described below.

Work Truck Attachments. The Work Truck Attachments segment includes the Company’s operations that
manufacture and sell snow and ice control attachments and other products sold under the FISHER®, WESTERN®, and
SNOWEX® brands, as well as its vertically integrated products.

Segment performance is evaluated based on segment net sales and Adjusted EBITDA. Separate financial
information is available for the two operating segments. In addition, segment results include an allocation of all corporate
costs to Work Truck Attachments and Work Truck Solutions. No single customer’s revenues amounted to 10% or more of
the Company’s total revenue. Sales are primarily within the United States and substantially all assets are located within the
United States.

Douglas Dynamics, Inc.
Notes to Consolidated Financial Statements (Continued)
Years ended December 31, 2024, 2023 and 2022
(Dollars in Thousands Except Per Share Data)

F-43
Sales between Work Truck Attachments and Work Truck Solutions reflect the Company’s intercompany pricing
policy. The following table shows summarized financial information concerning the Company’s reportable segments:

2024

2023

2022

Net sales

Work Truck Attachments ................................................................. $
256,010 $
291,723 $
382,296
Work Truck Solutions ......................................................................
312,494
276,455
233,772

$
568,504 $
568,178 $
616,068
Selling, general and administrative expense

Work Truck Attachments ................................................................. $
53,124 $
43,176 $
50,583
Work Truck Solutions ......................................................................
38,558
35,665
31,600

$
91,682 $
78,841 $
82,183
Other segment items (1)

Work Truck Attachments ................................................................. $
154,431 $
197,984 $
253,502
Work Truck Solutions ......................................................................
243,042
223,231
193,603

$
397,473 $
421,215 $
447,105
Adjusted EBITDA

Work Truck Attachments ................................................................. $
48,455 $
50,563 $
78,211
Work Truck Solutions ......................................................................
30,894
17,559
8,569

$
79,349 $
68,122 $
86,780
Depreciation and amortization expense

Work Truck Attachments ................................................................. $
9,844 $
13,431 $
12,901
Work Truck Solutions ......................................................................
8,046
8,231
8,037

$
17,890 $
21,662 $
20,938
Assets

Work Truck Attachments ................................................................. $
367,979 $
392,920 $
397,557
Work Truck Solutions ......................................................................
222,004
200,498
199,334

$
589,983 $
593,418 $
596,891
Capital expenditures

Work Truck Attachments ................................................................. $
5,493 $
6,459 $
9,526
Work Truck Solutions ......................................................................
2,271
3,307
2,876

$
7,764 $
9,766 $
12,402

Adjusted EBITDA

Work Truck Attachments ............................................................ $
48,455 $
50,563 $
78,211
Work Truck Solutions .................................................................
30,894
17,559
8,569
Total Adjusted EBITDA .................................................................. $
79,349 $
68,122 $
86,780
Less items to reconcile Adjusted EBITDA to Income before taxes:

Interest expense - net ...................................................................
15,260
15,675
11,253
Depreciation expense ..................................................................
10,370
11,142
10,418
Amortization ...............................................................................
7,520
10,520
10,520
Gain on sale leaseback transaction ..............................................
(42,298 )
-
-
Stock based compensation ..........................................................
4,860
953
6,730
Restructuring and severance costs ...............................................
1,997
-
-
Impairment charges (2) ...............................................................
1,224
-
-
Sale leaseback transaction fees ...................................................
5,257
-
-
Other charges (3) .........................................................................
1,268
598
498
Income before taxes ........................................................................... $
73,891 $
29,234 $
47,361

Douglas Dynamics, Inc.
Notes to Consolidated Financial Statements (Continued)
Years ended December 31, 2024, 2023 and 2022
(Dollars in Thousands Except Per Share Data)

F-44
(1) Includes cost of sales, other (income) expense, and the addback of depreciation expense, stock based compensation,
impairment charges, gain on sale leaseback transaction, CEO transition fees, and unrelated legal, severance,
restructuring, and consulting fees for the periods presented.

(2) Reflects impairment charges taken on certain internally developed software in the year ended December 31, 2024.

(3) Reflects unrelated legal and consulting fees, insurance proceeds, CEO transition costs, and, in 2022, incremental costs
incurred related to the COVID-19 pandemic for the periods presented.

17. Stockholders’ equity

Preferred Stock

The Company is authorized to issue 5,000,000 shares of preferred stock, par value $0.01 per share. Subject to any
limitations under law or the Company’s certificate of incorporation, the Company’s board of directors is authorized to provide
for the issuance of the shares of preferred stock in one or more series; to establish the number of shares to be included in each
series; and to fix the designation, powers, privileges, preferences, relative participating, optional or other rights (if any), and
the qualifications, limitations or restrictions of the shares of each series. As of December 31, 2024 and 2023, no shares of
preferred stock were issued and outstanding.

Common Stock

The Company has 200,000,000 shares of common stock authorized, of which 23,094,047 and 22,983,965 shares
were issued and outstanding as of December 31, 2024 and 2023, respectively. The par value of the common stock is $0.01
per share.

The holders of common stock are entitled to one vote per share on all matters submitted to a vote of stockholders.
In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company, common stockholders
would be entitled to share ratably in the Company’s assets and funds remaining after payment of liabilities.

18. Valuation and qualifying accounts

The Company’s valuation and qualifying accounts for the years ended December 31, 2024, 2023 and 2022 are as
follows:

Balance at

Additions

beginning

charged to

Changes to
Balance at

of year

earnings
reserve, net (1)
end of year
Year ended December 31, 2024

Allowance for credit losses .................... $
1,646 $
702 $
24 $
2,372
Valuation of deferred tax assets .............
2,005
-
(495)
1,510
Year ended December 31, 2023

Allowance for credit losses .................... $
1,366 $
320 $
(40) $
1,646
Valuation of deferred tax assets .............
2,071
-
(66)
2,005
Year ended December 31, 2022

Allowance for credit losses .................... $
2,970 $
(1,476) $
(128) $
1,366
Valuation of deferred tax assets .............
3,273
-
(1,202)
2,071

(1) Increases (deductions) from the allowance for credit losses equal accounts receivable written off and increases related to
acquired businesses, less recoveries, against the allowance. See Note 2 for additional information. Increases (deductions)
to the valuation of deferred tax assets relate to the reversals due to changes in management’s judgments regarding the
future realization of the underlying deferred tax assets.

Douglas Dynamics, Inc.
Notes to Consolidated Financial Statements (Continued)
Years ended December 31, 2024, 2023 and 2022
(Dollars in Thousands Except Per Share Data)

F-45
19. Changes in Accumulated Other Comprehensive Income by Component

Changes to accumulated other comprehensive income by component for the year ended December 31, 2024 is as
follows:

Unrealized

Net Gain
(Loss)

Unrealized
Net Loss
Retiree

on Interest
on Steel
Health

Rate
Hedging
Benefit

Swap
Instrument Obligation
Total

Balance at December 31, 2023 ..................................................... $
3,331 $
- $
3,025 $
6,356
Other comprehensive gain (loss) before reclassifications ............
1,398
(40)
1,031
2,389
Amounts reclassified from accumulated other comprehensive
income: (1) ................................................................................
(2,893 )
-
(380)
(3,273)
Balance at December 31, 2024 ..................................................... $
1,836 $
(40) $
3,676 $
5,472

(1) Amounts reclassified from accumulated other
comprehensive income:

Amortization of Other Postretirement Benefit items:

Actuarial gains (a) ................................................................. $
(514 )

Tax expense ...........................................................................
134

Reclassification net of tax ......................................................... $
(380 )

Realized gains on interest rate swaps reclassified to interest
expense .................................................................................. $
(3,910 )

Tax expense ...........................................................................
1,017

Reclassification net of tax ......................................................... $
(2,893 )

(a) – These components are included in the computation of benefit plan costs in Note 12.

Douglas Dynamics, Inc.
Notes to Consolidated Financial Statements (Continued)
Years ended December 31, 2024, 2023 and 2022
(Dollars in Thousands Except Per Share Data)

F-46
Changes to accumulated other comprehensive income by component for the year ended December 31, 2023 is as
follows:

Unrealized

Net Gain
(Loss)

Retiree

on Interest
Health

Rate

Benefit

Swap

Obligation
Total

Balance at December 31, 2022 ........................................................... $
6,115 $
3,013 $
9,128
Other comprehensive gain before reclassifications ............................
607
411
1,018
Amounts reclassified from accumulated other comprehensive
income: (1) ......................................................................................
(3,391)
(399 )
(3,790)
Balance at December 31, 2023 ........................................................... $
3,331 $
3,025 $
6,356

(1) Amounts reclassified from accumulated other comprehensive
income:

Amortization of Other Postretirement Benefit items:

Actuarial gains (a) ....................................................................... $
(539)

Tax expense .................................................................................
140

Reclassification net of tax ............................................................... $
(399)

Realized gains on interest rate swaps reclassified to interest
expense ........................................................................................ $
(4,583)

Tax expense .................................................................................
1,192

Reclassification net of tax ............................................................... $
(3,391)

(a) – These components are included in the computation of benefit plan costs in Note 12.

20. Quarterly Financial Information (Unaudited)

2024

First

Second
Third

Fourth

Net sales ....................................................................................... $
95,655 $
199,902 $
129,398 $
143,549
Gross profit ................................................................................... $
18,920 $
61,303 $
30,875 $
35,739
Income (loss) before taxes ............................................................ $
(9,943) $
32,127 $
41,740* $
9,967
Net income (loss) ......................................................................... $
(8,352) $
24,338 $
32,258 $
7,907
Basic earnings (loss) per common share ...................................... $
(0.37) $
1.03 $
1.37 $
0.33
Diluted earnings (loss) per common share ................................... $
(0.37) $
1.02 $
1.36 $
0.33
Dividends per share ...................................................................... $
0.30 $
0.30 $
0.30 $
0.30

* Quarter was impacted by the gain on the sale leaseback transaction of $42,298, offset by $5,494 of associated transaction
costs.

Douglas Dynamics, Inc.
Notes to Consolidated Financial Statements (Continued)
Years ended December 31, 2024, 2023 and 2022
(Dollars in Thousands Except Per Share Data)

F-47

2023

First

Second
Third

Fourth

Net sales ....................................................................................... $
82,545 $
207,267 $
144,121 $
134,245
Gross profit ................................................................................... $
11,275 $
61,363 $
32,129 $
29,503
Income (loss) before taxes ............................................................ $
(16,626) $
30,736 $
6,929 $
8,195
Net income (loss) ......................................................................... $
(13,110) $
23,964 $
5,792 $
7,077
Basic earnings (loss) per common share ...................................... $
(0.58) $
1.02 $
0.25 $
0.30
Diluted earnings (loss) per common share ................................... $
(0.58) $
1.01 $
0.24 $
0.29
Dividends per share ...................................................................... $
0.30 $
0.30 $
0.30 $
0.30

Due to rounding as well as the timing of issuance of shares, the sum of quarterly earnings per share may not equal
the annual earnings per share.

21. Restructuring and Impairment

In January 2024, the Company implemented the 2024 Cost Savings Program, primarily in the form of restructuring
charges for headcount reductions in both the Work Truck Attachments segment and corporate functions. For the
year ended December 31, 2024, $1,997 in pre-tax restructuring charges were recorded related to workforce reduction costs
and other related expenses and are included in Cost of sales and Selling, general, and administrative expense in the
Consolidated Statements of Income. The Company's restructuring expenses are comprised of the following:

Year Ended
December 31,

2024

Severance and employee costs ...................................................................................................................... $
930
Write down of property, plant and equipment ...............................................................................................
333
Legal, consulting and other costs ..................................................................................................................
734
Total .............................................................................................................................................................. $
1,997

The following table summarizes the changes in the Company's accrued restructuring balance, which are included in
Accrued expenses and other current liabilities in the accompanying Consolidated Balance Sheets. Such costs have been
substantially all paid as of December 31, 2024.

Balance at December 31, 2023 .................................................................................................................... $
-
Restructuring charges ....................................................................................................................................
1,445
Payments .......................................................................................................................................................
(1,445 )
Balance at December 31, 2024 .................................................................................................................... $
-

In conjunction with the 2024 Cost Savings Program, impairment charges of $1,224 were recorded in the
Consolidated Statements of Income for the year ended December 31, 2024 related to certain internally developed software at
the Company's Work Truck Attachments segment representing the full capitalized value of the software. In addition,
management evaluated its assets outside of the internally developed software described above and determined that there
were no indicators of impairment.

Douglas Dynamics, Inc.
Notes to Consolidated Financial Statements (Continued)
Years ended December 31, 2024, 2023 and 2022
(Dollars in Thousands Except Per Share Data)

F-48
22. Recent Accounting Pronouncements

In November 2024, the FASB issued ASU 2024-03, "Disaggregation of Income Statement Expenses," which
requires disaggregated disclosure of income statement expenses into specified categories in disclosures within the footnotes
to the financial statements. The standard is effective for annual periods beginning after December 15, 2026. The Company is
in the process of evaluating the standard's updated disclosure requirements.

In December 2023, the FASB issued ASU 2023-09, "Improvements to Income Tax Disclosures," which enhances
disclosure around income taxes. The standard is effective for annual periods beginning after December 15, 2024. The
Company is in the process of evaluating the standard’s updated disclosure requirements.

23. Subsequent Events

On January 20, 2025, the Company entered into a floor plan line of credit for up to $20,000 with a financial institution
that expires on January 31, 2026. Under the floor plan agreement, the Company receives truck chassis and title for upfitting
service installations. Upon upfit completion, the title transfers from the Company to the customer. The note bears interest at
prime, less 0.50%.

www.douglasdynamics.com
11270 W Park Place, Suite 300
Milwaukee, WI 53224
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