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Entire financial statement available here

Douglas Dynamics Announces Second Quarter 2011 Results Company Produced Solid Pre-Season Order Period; Updates 2011 Outlook Second Quarter Highlights:

• Net sales increased 8.0% from Q2 FY'10 to $71.6 million
• Adjusted EBITDA of $21.9 million in line with previous year period
• Adjusted earnings per diluted share of $0.49
• Company completed a restructuring of its debt agreement in April
• Stockholders of the company completed secondary offering of 5.75 million shares in May

MILWAUKEE, Aug. 8, 2011 (GLOBE NEWSWIRE) -- Douglas Dynamics, Inc. (NYSE:PLOW), the North American leader in the design, manufacture and sale of snow and ice control equipment for light trucks, today announced financial results for the second quarter ended June 30, 2011 and updated its outlook for 2011.

Second Quarter Results

Douglas Dynamics' pre-season sales period is comprised of the second and third quarters combined. To encourage distributors to receive shipments prior to the peak fourth quarter retail selling season, the Company offers promotional financial and freight terms to distributors that place orders during the second quarter. These orders are then shipped during the second and third quarters. The timing of these shipments between the second and third quarters can vary year to year based upon a number of factors, including distributor inventory levels and space availability. Similar to 2010, 2011 pre-season orders have shifted from long-term traditional patterns to be more heavily weighted towards the second quarter versus the third quarter.

Net sales were $71.6 million in the second quarter of 2011, representing an 8.0% increase from the corresponding period in 2010. This increase in net sales reflects stronger total pre-season orders compared to the prior year and the timing of pre­season shipments shifting toward the second quarter versus the third quarter, similar to the prior year.

James L. Janik, President and Chief Executive Officer of Douglas Dynamics commented, "We are pleased with our second quarter performance in which certain stockholders successfully completed a secondary offering, restructured our debt agreement and delivered solid financial results. During the quarter, we achieved a year-over-year increase in equipment shipments and parts and accessories across our core markets. We continue to see cautious optimism from our distributors, which is translating into improved results as they begin to prepare for the winter retail selling season."

Net income was $9.7 million, or $0.44 per diluted share, in the second quarter of 2011 compared to net income of $0.1 million, or $0.00 per diluted share, in the second quarter of 2010. Net income in the second quarter of 2011 included $0.6 million of expenses, net of taxes, incurred as a result of the Company's secondary offering. Net income in the second quarter of 2010 included non-recurring expenses of $10.2 million, net of taxes, incurred at the time of the Company's initial public offering. Adjusted net income was $10.7 million, or $0.49 per diluted share. Please see the Explanation of Earnings table below for details regarding adjusted net income. The estimated effective tax rate for 2011 is 39.0%.

The Company reported Adjusted EBITDA of $21.9 million in the second quarter of 2011, a slight increase compared to Adjusted EBITDA of $21.7 million in the second quarter of 2010. As expected, current year gross margins softened compared to the second quarter 2010 due to unusually favorable product mix in the prior year. This margin variance versus prior year was largely negated by the incremental profit generated by the 2011 second quarter revenue increase.

Balance Sheet and Liquidity

During the first six months of 2011, the Company recorded net cash used in operating activities of $2.9 million compared to net cash used in operating activities of $24.7 million in the same period last year. This improvement was driven by working capital changes and non-recurring cash costs incurred at the time of the Company's initial public offering in the second quarter of 2010, namely the buyout of the management services agreement totaling $5.8 million and liquidity bonus payment of $1.0 million. Additionally, the Company made $9.5 million in interest payments in the first six months of 2010 related to the senior notes, which were paid off with the proceeds of the initial public offering.

Inventory was $30.9 million at the end of the second quarter of 2011, an increase of $5.3 million compared to the second quarter of 2010. Inventory levels were lower in 2010 as the Company reduced second quarter production levels during the Johnson City plant closure process.

Accounts receivable at the end of second quarter of 2011 were $56.4 million, a nominal decrease of $2.3 million compared to the second quarter of 2010.

On April 18, 2011 the Company completed a restructuring of its debt agreement, extending maturity on the term loan to 2018 and the ABL revolver to 2016. The new agreement contains a reduction in interest rates and adds acquisition flexibility into the base agreement.

Secondary Offering

On May 20, 2011, certain of the stockholders of Douglas Dynamics, Inc. (the "Company"), including affiliates of Aurora Capital Group and Ares Management, closed a registered secondary offering of 5,750,000 shares (the "Shares") of the Company's common stock.

Dividend Policy

As previously reported on June 9, 2011, Douglas Dynamics declared a quarterly cash dividend of $0.20 per share on the Company's common stock. The declared $0.20 per share cash dividend was paid on June 30, 2011 to stockholders of record as of the close of business on June 20, 2011.

Outlook

Based on second quarter results and current trends, the Company expects net sales for the full year 2011 to range from $185.0 million to $215.0 million, Adjusted EBITDA of $48.0 million to $58.0 million and Adjusted earnings per share of $0.76 per share to $1.04 per share.

It is important to note that the Company's outlook assumes that the economy will remain stable and that the snowbelt regions in North America will experience average snowfall in the Company's core markets. If economic conditions worsen and/or snowfall is below average the Company's net sales, Adjusted EBITDA, and Adjusted Earnings per Share for the full year could fall below the projected ranges.

Mr. Janik concluded, "We expect the entire 2011 pre-season (April through September) shipping performance to be moderately stronger than last year due to the strong 2010/2011 snow fall. However, we continue to see caution based on overall concerns regarding the economy."

Webcast Information

The Company will host an investor conference call on Tuesday, August 9, 2011 at 10:00 a.m. Central Daylight Time. The conference call will be available on the Internet through the Investor Relations section of the Company's website at www.douglasdynamics.com. To listen to the live call, please go to the website at least fifteen minutes early to register, download and install any necessary audio software. For those who cannot listen to the live broadcast, an Internet replay will be available shortly after the call.

About Douglas Dynamics

Douglas Dynamics is the North American leader in the design, manufacture and sale of snow and ice control equipment for light trucks, which consists of snowplows and sand and salt spreaders, and related parts and accessories. The Company sells its products under the WESTERN®, FISHER® and BLIZZARD® brands which are among the most established and recognized in the industry. Additional press releases and investor relations information is available at www.douglasdynamics.com.

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