Q4 2023 Douglas Dynamics Inc Earnings Call

Participants

Nathan Elwell; Investor Relations; Douglas Dynamics Inc

Bob McCormick; President and Chief Executive Officer; Douglas Dynamics Inc

Sarah Lauber; Executive Vice President and Chief Financial Officer; Douglas Dynamics Inc

Mike Shlisky; Analyst; D.A. Davidson & Company

Robert Schultz; Analyst; Robert W. Baird & Co., Inc.

Greg Burns; Analyst; Sidoti & Company

Presentation

Operator

Hello, and welcome to the Douglas Dynamics Fourth Quarter 2023 earnings conference call. All participants will be in listen only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question. You may press star and one on your telephone keypad. And to withdraw from the question queue, please press star then two. I would now like to hand the call to Nathan LL, Vice President of IR. Please go ahead.

Nathan Elwell

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

Bob McCormick

Thanks, Nathan, and good morning, everyone. Today, I wanted to talk briefly about the fourth quarter and 2023. As you probably saw our detailed pre-release last month and the release yesterday evening. But more importantly, I'd like to focus on 2024 and a bright future.
I see for Douglas Dynamics. The main drivers of our fourth quarter performance were a continuation and expansion of what we had previously discussed throughout 2023. Work Truck Solutions performance was the highlight of the fourth quarter and 2023. In total, their strong Q4 completed calendar year, where they met their financial targets, improving EBITDA margins each quarter over prior year performance. I want to commend the solutions team for their dedication and performance. And I'm pleased to say we expect continued improvements throughout 2024.
Improved Solutions performance, however, was overshadowed by weather driven challenges in the attachments following two years of excellent results in attachments. So weather really impacted performance in 2023 and was the reason our results came in well below our expectations. We've been in the snow business for 75 plus years. And while we've seen our share of poor snowfall seasons, we've never seen back-to-back seasons of this magnitude First Quarter 2023 was impacted by the end of the '22, '23 snow season with record low snowfall in the East Coast. The fourth quarter 2023 was impacted by the start of the current '23, '24 snow season, we saw very low snowfall across the entire Snowbelt with snowfall totals that were barely 70% below the 10-year average as a result of these unprecedented weather patterns. There was a record 700 plus day gap between measurable snowfalls and important East Coast markets. This resulted in the lowest fourth quarter order activity we've ever seen signaling that the equipment replacement cycle has lengthened to a point where it will take more than one snow season to return to an average demand environment. And as many of you know, we are accustomed to rapidly adjusting our spending and production levels because of the influence of weather. We have limited the low snowfall playbook in early 2023 and pulled a record level of short-term cost savings numbers. When fourth quarter snowfall came in well below historical averages, we determined that we needed to take more aggressive and permanent cost reduction measures to align our cost structure with current demand trends, which we call the 2024 cost savings program. Sarah will discuss the details later.
But in summary, we expect $8 million to $10 million in annualized savings. Frankly, these are some of the hardest decisions we've had to make in our careers, but they were the right moves for the long-term financial and operational health of the company. I'm so proud of our leadership teams for how they have responded in this situation. They acted swiftly and the size, what's even more important is that while making these decisions, they never lost sight of our key long-term growth initiatives, ensuring that we stay focused on protecting and growing nationally our market share, but are competitive advantages in the market.
From a weather perspective, we have seen a mild El Nino pattern in the first quarter, which is not as strong as we hoped for. I am glad to say that weather conditions were stronger in January with snowfall totals above average across the snowbelt. In fact, we set a record for parts and accessories orders in the month of January, which is a good sign in early February, we saw the first nor'easter in two years. Having said that, the back half of February has been pretty quiet while the winter weather season isn't over yet. At this point, it seems like we will finish the season with below average snowfall totals on a more positive note, while our dealer checks at the end of January, confirmed inventory levels remain above the 5-year average. They have begun to moderate, so they are starting to come down. I'm pleased to say that both dealer sentiment and financial health remain fast.
Lastly, we are gearing up to launch some exciting new products at the NTEA. Work Truck Show in Indianapolis in a couple of weeks more to come on that topic next quarter. So there is no doubt it's been a difficult year in the attachments group. But as always, we'll exit this environment stronger, knowing our team will be ready to drive profitable growth again when conditions allow.
Let's turn to work truck solutions for the 2023 story has been much more robust. The solutions segment completed a strong finish to 2023 and delivering on its goal of mid-single digit EBITDA margins. Again, we want to thank our agenda and Henderson teams for driving higher volumes through their upfit centers and improving the baseline profitability of their businesses. Our recent performance bodes well for the coming year, especially as overall demand remains positive and we still have a strong backlog to work through all at all on good year-end solutions and verticals.
So as we look to the future, what do we see? First, we see a solutions segment that is building that momentum generated by various profit improvement objectives.
2023, 2024. We're focused on driving revenue and not chassis channels, penetrating new markets with new product introductions Additionally, our focus on internal profit drivers continues driven by product redesigns, sourcing improvements and DDMS, continued improvement initiatives on the shop floor and in our upfit centers. From a chassis perspective, we expect to see some impact from the UAW strike in the first quarter of 2024, which had been taken into account with our guidance. Overall, we are not projecting significant near term improvements in chassis supply. We do enter 2024 with strong backlogs. If chassis supply does improve during the year, we're poised to move increased velocity through RPM second, looking at the attachments, while the lengthy, while the lengthen and lengthening replacement cycle will impact demand in attachments this year, the team has repositioned itself to manage through these conditions staying focused on factors we can control. These include the 2024 cost savings program, new product launches and baseline profit improvement projects that our teams were so successful with in 2023. Our people are using our DDMS continuous improvement mentality to produce creative solutions, improving our operations in the near term and providing considerable benefits over the long term.
Looking ahead at M&A opportunities. Our near-term focus is on the Attachments segment searching for companies with complex products that need to be professionally upfit out to work turns. We are starting to expand the parameters of our search to include a broader range of companies in certain sectors. Having said that, our criteria for potential acquisition candidates remains intact. It must have strong brands have significant potential for growth and would be a good cultural fit with Douglas. We will maintain our disciplined approach, but we always tried to look ahead and see around corners to be clear, we are not looking to pull the trigger on any deals in the near term. It's important that we have the right strategy and targets in place, which will allow us to execute when our balance sheet is back to normal, and we have multiple financing options to consider.
Finally, let me say this. We've navigated through some tough external headwinds in recent years. It's situations like this that really test the strength of your leadership teams. Quite frankly, you find out what you're made of. I couldn't be more pleased with how our teams have responded in this environment, finding creative solutions to difficult challenges. Our continuous improvement and getting better every day mentality has shown themselves like never before. The main benefit of navigating through difficult circumstances is that allows us to take a step back challenge what we do and how we do it and find a way to find ways to improve trust me ladies and gentlemen, we will emerge from these challenges stronger smarter than before. With that said, I'll hand the call to Sarah.

Sarah Lauber

Thanks from the simple story for 2023 with Network Solutions produced significantly improved results while Work Truck Attachments was hindered by unprecedented weather trends. Clearly, 2023 did not unfold as we expected, but collectively, we made the right decisions and implemented the right policies to adapt to these unusual challenges successfully. I want to thank our teams for stepping up identifying issues and more importantly, finding solutions as we manage through the year.
With that said, let me walk through the numbers for you. On a consolidated basis, net sales were $568.2 million for the year compared to $616.1 million in 2022. The approximate 8% decrease was due to low snowfall impacting volumes and attachments, which was partially offset by higher volumes and better price realization and solutions.
Gross profit of $143.3 million or 23.6% of sales compared to $151.5 million or 24.6% last year as the impact of lower volumes and higher margin Attachments segment negatively affected our mix.
Sg&a expenses, including intangibles amortization, decreased 3.6% to $89.4 million for 2023 compared to $92.7 million for the prior year. The decrease was primarily due to lower incentive-based compensation and the impact of curtailing spending as part of our closed snowfall playbook.
Adjusted EBITDA for 2023 was $68.1 million or 12% of sales compared to $86.8 million or 14.1% of sales in 2022. We remain focused on improving EBITDA margins and solutions made significant improvement in the year.
Interest expense increased to $15.7 million for 2023 compared to $11.3 million in 2022 due to higher interest on our revolver of $3 million based on higher borrowings at higher variable interest rates compared to last year. Our combined tax rate for 2023 was 18.9% compared to 18.5% for 2022. Both rates are lower than typical with the 2023 rate being impacted by a tax benefit related to the purchase of investment tax credits and then 2022 raising impacted by a discrete tax benefit related to state income tax rate changes.
Net income for the year was $23.7 million compared to $38.6 million for 2022, again due to low snowfall in the first and fourth quarters of the year, impacting volumes and attachments which was partially offset by improved performance at Solutia.
Now let's look at the results from the two segments. Net sales at our Attachments segment were and $291.7 million for 2023 compared to $382.3 million in the prior year. The significant decrease was due to unprecedented low snowfall in our core markets during that '22 and '23 zone season and the beginning of a '23 '24. This translated into adjusted EBITDA of $50.6 million or 17.3% of net sales for 2023 compared to $78.2 million or 20.5% of net sales in 2022 less severe lack of snowfall and its impact on demand led us to implement the previously announced 2024 cost savings program, which focused on both attachments and corporate functions, primarily in the form of headcount reduction. We expect the program to produce annualized pretax savings of $8 million to $10 million, with 75% of the savings expected to be realized this year and $2 million in pretax restructuring charges, primarily in the first quarter. The story was more positive at Solutions 2023, net sales increased 18% to $276.5 million when compared to the prior year, using a higher volume on improved chassis availability and improved pricing increase realization in the fourth quarter of 2023, we began to see the significant improved improvement and pricing actions on our longer term municipal contracts, which we took to mitigate the inflationary factors experienced over the last couple of years, the impact of higher volumes and pricing improvements fell through to adjusted EBITDA, which more than doubled from $8.6 million in 2022 to $17.6 million in 2023. In all four quarters of 2023, solutions delivered margin improvement compared to the previous year and delivered mid single digit EBITDA margins for the year, making progress towards our long-term margin target of double digit to low teen margins. As we previously stated, we're still assuming that chassis supply in 2024 will be similar or slightly better than last year, but we don't expect dramatic improvements.
Finally, we entered 2023 with $296 million of backlog compared to our record $369 million a year ago. Although not a record, the current backlog is still well above the 10-year average and reinforces our positive outlook for solutions for 2024.
Now let's look at our balance sheet and liquidity. Net cash provided by operating activities was $12.5 million for the year compared to $40 million in 2022. The decrease was due to a $3.3 million reduction in earnings and $24.2 million in unfavorable working capital changes due to an increase in cash used for accounts payable, which was related to the timing of supplier payments. These working capital changes in the year resulted in free cash flow of $1.9 million compared to $28 million in 2022. Accounts receivable at the end of the year were $83.8 million, $3 million lower than 2022. Inventories were $140.4 million at year end, slightly higher than the $136.5 million at the end of '22 compared to last year. We ended 2023 with higher levels of snow and ice control equipment inventory due to the lack of snowfall in the fourth quarter, while solutions made progress in reducing their inventory levels that have been elevated due to long lead times.
And Chad, it's Elaine.
Turning to capital allocation. We paid our dividend of $0.295 at year end, we announced today our first quarter 2024 dividend, which is unchanged from last quarter. While the dividend remains our top capital allocation priority, our aim is to continue our track record and increase it again when conditions allow at year end, our total liquidity comprised of approximately $24 million in cash and approximately $103 million of borrowing capacity on the revolver. Net debt of $212 million at year end compares to $187 million at the end of '22 and our earnings are reflective of historically low snowfall trends. We are comfortable that our year-end net debt leverage ratio of 3.5 times is above our targeted range temporarily and will return to our targeted range as we return back to average demand in attacks.
As you saw in our press release, we amended our credit facility by increasing the leverage ratio to provide us more financial flexibility in the front half of the year. We are confident that we will be able to manage the balance sheet and pull levers we need to so that we are operating within our credit facility guidelines in the back half of the year.
Capital expenditures for 2023 totaled $10.5 million, $1.5 million lower than '22 as we curtailed certain investments as part of our expanded low snowfall playbook during the year. While we expect our 2024 CapEx to be higher than 2023. We will be on the lower end of our range of 2% to 3% of revenue, and we will be prudent with timing of the investments as spending will remain somewhat constrained as part of our 2024 cost savings program.
Now let's turn to our outlook. As you saw in the release, we expect 2024 net sales to be between $600 million and $660 million. Adjusted EBITDA is projected to range from $70 million to 100 million, which would produce adjusted earnings per share in the range of $1.20 to $2.10 per share. The effective tax rate is expected to be approximately 24% to 25% the adjusted EPS range of $1.20 to $2.10 indicates growth over 2023 results. This is driven by continued ongoing baseline profit improvements. The implementation of the 2024 cost savings program and project and higher volumes and attachments solutions enters 2024 in the best position since before the pandemic with continued positive demand and backlog trends combined with improved operating performance. The largest assumption of our 2024 guidance relates to the replacement cycle of snow and ice equipment in the field. Given the unprecedented weather patterns experienced in our core markets. The equipment replacement cycle for attachments is elongated. We are assuming approximately half of the weather-driven volume decline in 2023 will be recovered in 2024. Assuming we see a return to average snowfall in the fourth quarter when we enter our preseason ordering in April, we will have further indications on this asap assumption, and I plan to provide an update to our guidance with our first quarter call. If we find orders are trending up or down at that point, when we look longer term, our segment financial targets remain consistent for attachments. We believe we can deliver low to mid-single digit sales growth and adjusted EBITDA margins in the mid to high 20s in 2020 or 2024 cost savings program alone is expected to drive attachment adjusted EBITDA margins back close to 20%, with further improvement to margins as we progress through a multiyear return to average demand. First solutions, we expect to maintain mid to high single digit sales growth in 2024, along with continued improvement towards low double-digit EBITDA margins the improvement expected in 2024 is driven by continued success on baseline profit improvements and greater price realization and keeps us on the path towards double digit to low teen margins over the longer term. It's worth noting that our outlook includes underlying assumptions such as relatively stable economic conditions, stable to slightly improving supply of chassis and components. And that quarter markets will experience slightly below or better snowfall in the first quarter of 2020 for an average snowfall in the fourth quarter of 2024. Despite the recent weather drought driven challenges, we remain focused on the profit profile of our two segments will continue to make the baseline profit improvements needed to meet the long-term potential of these businesses. With that we'd like to open up the call for Quest.
Operator?

Question and Answer Session

Operator

Thank you. We will now begin the question and answer session. To ask a question. You may press star and one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the key to address your question, please press star then two. Our first question today comes from Mike Shlisky with DA Davidson. Please go ahead.

Mike Shlisky

Hi, good morning and thank you for maybe some comments you made on the dividend. So I wanted to clarify, you mentioned you were holding back on making the decision about increasing the dividend for 2024? And is it the same chance that you would increase as well as cut or a coating that there's just not a table that's going to be flat or up is your current thinking?

Sarah Lauber

Yes, good morning, Mike. You know, certainly we've always talked and that has not changed that the dividend is our number one priority, and we have strived to increase and have a sustainable dividend for years now. And we've had many years of increasing. We believe the dividend is absolutely sustainable at this point. All of our plans for the year includes that dividend, and we expect that to continue.

Bob McCormick

Yes. I'll just I'll just jump in there to reiterate what Sarah said, Mike, is this public company thesis for Douglas Dynamics was launched 14 years ago with the dividend being front-and-center. That hasn't changed, okay. While it's prudent, not to increase it as we navigate through this weather environment. It is still the number one priority and our business model is built around protecting it and delivering it every quarter.

Mike Shlisky

Okay. Got it. I've also had a quick housekeeping item about the guidance in the press release. You kind of have two different centers about EPS. And I wanted to just kind of square up that together and also what you provided back on January 30th. So you mentioned $1.28 to $2.10 of adjusted EPS in dollars, but then growth of 50% to 100% also, which would suggest $1.50 to $2. And then you said that you were 7% to 8% back on January 30th. So I'm not really sure they're kind of in the same range, more or less, but which one is the most appropriate one. And for us to look at.

Sarah Lauber

That's a great question, Mike. So the guidance ranges we typically give at $1.20 to $2.10 that encompasses low snowfall potentially in the fourth quarter on the low end of the range. The next statement there was meant to be a qualitative statement, getting asked a significant amount of earnings per share increase that we have in front of us based on weather and on the other levers that we pulled some of the 50% to 100% is within that guidance range, but it was really more a qualitative statement to get at the magnitude of the earnings per share or Okay.

Mike Shlisky

And a follow-up on that later.

Sarah Lauber

I guess maybe are you finding that Mike was just focused on the guidance range as we've typically provided $1.20 to $2.10. And as I mentioned in my script, the larger assumption there being the 50% return to average that we will update in April, and we're seeing it's trending in any different fashion.

Mike Shlisky

Okay. And then maybe just talking about more the long term here. You've mentioned the past you can get an average snowfall year, $3 a share that you're looking to get this, can we see it sounds like which might be the next year, at least, but that's what you're looking at. That's I that's what I last heard from you.
Folks, I guess you could you comment, is that viewpoint still valid? And then maybe secondly, on the cost improving permanent that you've captured kind of rolling out here, create another quarter or or or higher EPS, and that was probably not perceived of your fresh issue that three, our guidance is it more like $3.25 going forward? And then maybe lastly, attachments would have to go up quite a bit from here in an average on an average snowfall scenario. I know you mentioned, you know, low to mid digit growth but would there really be a gap up here first, if we see more normal snow and then you have to go from there to your long-term growth rate?
It was my three questions about one of them, but the more broader long-term view, I'd appreciate it.

Bob McCormick

I don't know. Let me let me start and then I'll let I'll let Cheryl finish. Obviously we've been talking about $3 share targets for quite some time. Most recently, over the past couple of years, we've talked about $3 of EPS by 2025 that that journey is driven largely by in internal profit drivers, which we've talked about quite a bit, right? We took pretty conservative stances, Mike, on the external drivers, both snowfall and chassis supply to reach those long-term targets. We're pleased to say, and we'll shop from the rooftops we have delivered on our internal profit driver commitments, and we expect that to continue.
Okay. Now having said that, this profit model is always impacted by weather, right? In most environments, snowfalls up or down 5% to 10%. It doesn't really move the needle very much given what's happened over the last year and a half, right? The historic impact on earnings of weather has been over $1 of EPS. So more than wiped out the gains from the internal profit drivers. Having said all that, as we find ourselves moving forward from today, we are laser focused on three things, right? We've repositioned the attachments business to support a multiyear return to normal demand levels. And and when then that when that occurs, as that occurs, you're going to see some nice gains we had to get into to continue to support the continued improvements within the solutions group that servers talked about.
And then lastly, where I started, we are still laser focused on delivering our internal profit drivers. Now you put all those things together, and that will drive significant EPS improvements in 2024 and '25.
Okay. That's where our attention is at this point, Sara, as I reiterated that our long-term goals by segment really haven't changed. I'll give her a chance to add a add any additional comments you need to be want to provide?

Sarah Lauber

Yes, when I go back to your three questions, Mike, Bob, just walked through, I guess the journey and the fact that we're reaffirming where the where the segments land, which is the growth rate in attachments of low to mid single digits and mid to high twenty's margin with the solution being that mid to high single digit and double digit to low-teens margin.
We absolutely see a path to those.
There's no impact of being greater than premium than a dollar. And the multiyear aspect is really more of the assumption that we've had to make in the 1st year and the cost savings program absolutely is additive to where we were several years ago that call it $0.20 to $0.30 that we expect within our guidance. This year, and we expect those to be to be permanent additions to our to our earnings and as we move forward. So all of those things, I guess, well position us to get that significant earnings per share increase that we've been talking about. And we're just not focused on that timing of the three.

Mike Shlisky

Okay. Okay. I'll take one other questions off-line.

Bob McCormick

Thank you so much, Mike.

Sarah Lauber

Thank you.

Operator

The next question is from Robert Schwartz with Baird. Please go ahead.

Robert Schultz

Hey, good morning. And see you guys talked about recovering about half of the weather driven volume declines that you experienced in 2023. Maybe could you provide a little bit more context there and kind of the underlying assumptions you made to get to half?

Bob McCormick

Sure. Let me let me start and I'll let Alex Sherif jump on. You know, we've talked over the years, right? I mean whether it goes up and down, but one of the unique things about this weather business is we have enough history that when something happens, we can find two or three other data points historically where a similar thing has happened. And therefore, we know what happens next, we're not in that space right now, right? What's happened over the last 18 months has never happened before. So there's not a lot of history to draw on. So we're making more educated guesses and then tweaking those things up or down as the as the cycle show themselves. So CREWASL.

Sarah Lauber

And so our comps in our guidance and based on the volume lost in attachments that we experienced in 2023. So we are assuming that we get about half of that back. And then once April begins and we start to see preseason, we'll have more indications of that assumption. And so my plan is to update our guidance. If we see that as materially different upper deck from that point.

Robert Schultz

Got it. Thanks. And then maybe on the solution side on the guidance for next year, maybe how should we think about the contribution there between Dejana and Henderson.

Sarah Lauber

And I'd say they're both on both improving policies and they're they're both on their journey to the targets that have been set out for this segment. And they both are making thinking improvements, but I would say are relatively equal into my commentary for solutions in total.

Robert Schultz

Awesome. And then just one more for me. What do you what are you expecting for free cash flow this year and kind of what are the puts and takes?

Sarah Lauber

Yes. So when you when you look at the midpoint of the guidance for our EBITDA. I'll kind of walk you through the pieces on cash interest, I would say is around 15 to 16 million and not not too far from prior year and cash taxes, we're expecting to be flat. And I mentioned our CapEx would be at the low end of our range of 2% to 3% of sales and then the assumption on working capital, if you look at this year's working capital was greatly impacted by by accounts payable timing this year, I would say to you and this year I would say, more relatively flat working capital and with us having opportunity to exceed that with the inventory reduction plans that we have in place.

Robert Schultz

Awesome. Thanks. I'll leave it there.

Operator

Then and again, the next question comes from Greg Burns with Sidoti & Company. Please go ahead.

Greg Burns

Warning. You called quantify. Could you quantify what the impact on the UAW strike will be in the first quarter or what exactly the impact we'll be you?

Sarah Lauber

Yes, we've incorporated it into our guidance. I will tell you, Greg, it's a little bit hard to understand exactly what you AW. Impax's versus other, you know, supply chain movements. I would say that we've estimated probably between $1.5 million to $3.5 million of EBITDA and primarily in the first quarter and yes.

Greg Burns

Okay. Okay. And I just wanted to, I guess, understand the the guidance a little better what the assumption is for the first quarter like you do are you expecting what kind of end of the snow season are you expecting here in your in your outlook and what is factored in your guidance? Like if we get no snow does that we pay? Is that real now more inclined to lower.

Sarah Lauber

So January, no one better than January last year. We had no show up on the East Coast, and that was very good. We actually had a record January for parts and accessories and our attachment segment because of about Capco fall on February, you can scale your window has not been and significant from a from a snow standpoint, and that's more heavily weighted for the season. So right now, our assumption is that we have a below average snowfall that was in in tying our guidance for the year for the first quarter, when I think about first quarter results, we are expecting improvement over prior year in total, and I would say the snowfall that we saw in January. And that improvement helped us to work our way towards close to breakeven for the first quarter, which, as you know, is our seasonal low at quarter of the year.

Greg Burns

Okay, great. And then when you consider M&A, are you looking to stay within your existing product categories or potentially maybe looking at a new a new some new category, maybe that's less weather dependent?

Bob McCormick

Yes, we certainly in the attachments acquisition strategy, we are targeting in attachment products that are outside of traditional snow and ice control. And obviously, there's there's there's a host of reasons why we're one of them. You just mentioned right with you to over the long run, further further diversifies our earnings away from being so snow and ice control, relax was most of the focus is upside of snow and ice.

Greg Burns

Okay, thank you.

Operator

Thank you. As a reminder, to ask a question, you may press star, then one on your telephone keypad. Seeing no further questions. This concludes our Q&A session. I would like to hand the call back over to President, Bob McCormick for any closing remarks.

Bob McCormick

Thanks. Thank you for your time today. We appreciate your ongoing interest in Douglas Dynamics. Our company is built to manage through uncertainty. And while it's been tested of late, I think we have shown we are more than capable of making the necessary decisions, however, difficult and then executing those plans. The long-term demand trends and outlook remain positive for all of our business. We are confident that as external headwinds subside, we will come back stronger, deliver improvements and reach our long-term goals.
I'm excited about the future of Douglas Dynamics our best is still ahead of us. Thank you and have a terrific day.

Operator

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