DOUGLAS DYNAMICS INC

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 manufacturing and upfit facilities in Milwaukee, WI, Manchester IA, Rockland, ME, Madison Heights, MI and Huntley, IL. The Company also leases fifteen manufacturing and upfit and service facilities located in Iowa, Maryland, Missouri, New Jersey, New York, Ohio, Pennsylvania, and Rhode Island. Additionally, the Company operates a sourcing office in China.

The Company conducts business intwo segments: Work Truck Attachments and Work Truck Solutions. Financial information regarding these segments is in Note16 to the Consolidated Financial Statements.

Recently adopted accounting standards

There wereno accounting standards adopted in the year ended* December 31, 2023*.

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 ofthree months or less to be cash equivalents. Cash equivalents are carried at cost, which approximates fair value.

F-10

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 havenot 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 doesnot 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. Management evaluated the need for an additional allowance for credit losses related to macroeconomic conditions. Management hasnot seen indications of customers going out of business andnot being able to pay their bills (although the receivables* maybecome more aged). Management believes customers of the Work Truck Attachments segment have long-standing relationships with the Company, and are mature dealers that are likely able to weather current macroeconomic challenges. Many Work Truck Solutions customers are governments and municipal entities who management believes are highly unlikely to default. In addition management believes Work Truck Solutions has long-standing relationships with its customers, and the customers are in general mature dealers that are unlikely to default as a result of current macroeconomic conditions. Therefore, as of December 31, 2023and2022*,no additional reserve related to current macroeconomic conditions was deemed necessary. 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. As of* December 31, 2022*, the Company had an allowance for credit losses on its trade accounts receivable of $1,000 and $366 at its Work Truck Attachments and Work Truck Solutions segments, respectively.

F-11

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, 2023and2022*:

Financing program

The Company is party to a financing program in which certain distributors* mayelect to finance their purchases from the Company through athird* party financing company. The Company provides thethird party financing company recourse against the Company regarding the collectability of the receivable under the program due to the fact that if thethird 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 and reimburse any legal fees incurred by the financing company. During the years ended* December 31, 2023,2022 and2021, distributors financed purchases of $9,022, $15,782 and $10,524 through this financing program, respectively. At both December 31, 2023* and* December 31, 2022*, there wereno uncollectible outstanding receivables related to sales financed under the financing program. The amount owed by distributors to thethird party financing company under this program at* December 31, 2023and2022* was $13,748 and$16,089, respectively. The Company wasnot required to repurchase any repossessed inventory for the years ended* December 31, 2023,*2022 and2021.

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, 2019the 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, 2019through May 31, 2024.The Company mayhave counterparty credit risk resulting from the interest rate swap, which it monitors on an on-going basis. The risk lies withone* 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, 2019through March 18, 2020,the interest rate swap was accounted for as a cash flow hedge. During thefirst* quarter of2020, 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, 2023and2022* was ($1,163) and ($1,163), respectively. A mark-to-market adjustment of $476 and $476 was recorded as Interest expense in the Consolidated Statements of Income for the years ended* December 31, 2023and2022*, respectively, related to the swap.

F-12

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, 2021to 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. The amount expected to be amortized from Accumulated other comprehensive income into earnings in the nexttwelve* months is $286.

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, 2024through June 9, 2026.The Company mayhave counterparty credit risk resulting from the interest rate swap, which it monitors on an on-going basis. The risk lies withtwo* 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 $2,984 and $5,208 at* December 31, 2023* and* December 31, 2022*, respectively, of which $3,331 and $6,115 is included in Accumulated other comprehensive income on the balance sheet as of* December 31, 2023and2022*, respectively. This fair value was determined using Level2 inputs as defined in Accounting Standards Codification Topic (“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 Note8. 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, 2023and2022*, the Company had $2,217 and $1,211 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, 2023and2022* was $20,293 and $7,847, 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.

Leases

As of* December 31, 2023*, seventeen of the Company’s office and upfit and distribution centers were subject to a lease agreement. See Note6 for additional information on the Company’s leases.

In the year ended* December 31, 2021,it was determined that facility leases related totwo locations in our Work Truck Solutions segment were impaired. As a result, an impairment of $1,211 was recorded in the year ended December 31, 2021and is recorded under Impairment charges in the Company’s Consolidated Statements of Income, with an offset being a reduction to the Operating lease - right of use asset on our Consolidated Balance Sheets. See Note6* for additional information.

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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:

Depreciation expense was $11,142, $10,418, and $9,634 for the years ended* December 31, 2023,*2022 and2021, respectively. The estimated useful lives of leasehold improvements is the shorter of the remainder of the lease term andtwelve 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 $6,925, $6,750 and $5,974 for the years ended* December 31, 2023,*2022 and2021, 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. The Company determined thatno long-lived assets were impaired as of* December 31, 2023*.

In the year ended* December 31, 2021,it was determined that facility leases related totwo locations in the Company's Work Truck Solutions segment were impaired. As a result, an impairment of $1,211 was recorded in the year ended December 31, 2021and is recorded under Impairment charges in the Company’s Consolidated Statements of Income, with an offset being a reduction to the Operating lease - right of use asset on the Company's Consolidated Balance Sheets. See Note6* for additional information.

F-14

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 hasfour 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 oftwo reporting units: Commercial Snow & Ice and Douglas Dynamics Vertical Integration. Only the Commercial Snow & Ice reporting unit has goodwill. The annual impairment tests performed as of* December 31, 2023* and* December 31, 2022* indicatedno impairment for the Commercial Snow & Ice reporting unit, which had goodwill of $113,132 at both* December 31, 2023and2022*. The Work Truck Solutions consists oftwo reporting units; Municipal and Dejana. Each of the Municipal and Dejana reporting units had $0 in goodwill at* December 31, 2022* and* December 31, 2023*.

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 wereno indicators of impairment during the years ended* December 31, 2023* or2022. 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. The Company had gross intangible assets and accumulated amortization of $273,755 and $142,166, respectively for the year ended* December 31, 2022*, of which $177,765 and $104,196 relate to the Work Truck Attachments segment, and $95,990 and $37,970 relate to the Work Truck Solutions segment, respectively.

At* December 31, 2023*, the Company’s Dejana reporting unit had tradenames of $14,000 and an estimated fair value of $19,700. 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 further 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* maybe 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 wereno* indicators of impairment subsequent to the* December 31, 2023* impairment test.

F-15

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 thannot that some portion of the deferred income tax asset willnot be realized. Additionally, when applicable, the Company would classify interest and penalties related to uncertain tax positions in income tax expense.

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:

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 intoone ofthree levels based on the lowest level of significant input used: Level1 (unadjusted quoted prices in active markets); Level2 (observable market inputs available at the measurement date, other than quoted prices included in Level1); and Level3 (unobservable inputs that cannot be corroborated by observable market data).

F-16

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:

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 hasnot experienced any losses in such accounts and believes that it isnot exposed to any significant risk on these balances.

No distributor represented more than10% of the Company’s net sales or accounts receivable during the years ended* December 31, 2023,*2022 and2021.

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Revenue recognition

The Company applies the guidance codified in Accounting Standards Codification606, Revenue from Contracts with Customers(“Topic606”).Revenue is recognized when or as the Company satisfies a performance obligation. See Note3 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 wereno related party transactions during2021,2022 or2023.

Warranty cost recognition

The Company accrues for estimated warranty costs as revenue is recognized. All warranties are assurance-type warranties. See Note10 for further details.

Defined benefit plans

The Company has noncontributory, defined benefit postretirement benefit plans covering certain employees. Management reviews underlying assumptions on an annual basis. Refer to Note12 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 in the yellow pages and billboards. Advertising expenses amounted to $4,823, $4,699 and $3,884 for the years ended* December 31, 2023,*2022 and2021, 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 $10,081, $12,159 and $10,152 for the years ended* December 31, 2023,*2022 and2021, respectively.

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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 ASC718, 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. See Note19 for the components of accumulated other comprehensive income.

Segment reporting

The Company operates throughtwo 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’stwo current reportable business segments are described below.

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.

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 Note16 for financial information regarding these segments. Sales are primarily within the United States and substantially all assets are located within the United States.

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 receive 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 all 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. 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 and historical experience.

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

Independent Dealer Sales – Revenues from sales to independent dealers are recognized when the 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 we upfit 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 doesnot 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 doesnot set the price for the truck chassis, isnot responsible for the billing of the chassis and doesnot 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 doesnot have inventory or pricing control over the truck chassis. Within the Work Truck Solutions segment, the Company also sells certainthird-party products for which it acts as an agent. These sales donot 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 thethird-party service provider is recorded as a reduction to sales, resulting in net sales being equal to the gross profit on the transaction.

F-20

The Work Truck Solutions segment hasfour 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 doesnot 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.

Fleet Upfit Sales – The Company enters into contracts with certain fleet customers. Fleet agreements 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. 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 Topic606, revenue is recognized over time based on a cost input method. The Company accumulates costs incurred on partially completed customer-owned upfits based on estimated margin and completion. This over time recognition for customer owned vehicles increased revenue by $759, decreased revenue by $136 and increased revenue by $373 for the years ended* December 31, 2023,*2022 and2021, respectively.

Dealer Upfit Sales – The Company upfits work trucks for independent dealer customers. Dealer upfit revenue is recorded upon delivery. The customer doesnot 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.

F-21

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:

Revenue by timing of revenue recognition was as follows:

F-22

Contract Balances

The following table shows the changes in the Company’s contract liabilities during the years ended* December 31, 2023and2022*:

The Company receives payments from customers based upon contractual billing schedules. Contract assets include amounts related to our contractual right to consideration for completed performance obligationsnot yet invoiced. There wereno contract assets as of* December 31, 2023* or2022. 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, 2023and2022*.

Practical Expedients and Exemptions

As allowed under Topic606, the Company adopted the following practical expedients and exemptions:

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4. Inventories

Inventories consist of the following:

The inventories in the table above donot include truck chassis inventory financed through a floor plan financing agreement as discussed in Note8. 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, 2023and2022*, the Company had $2,217 and $1,211 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.

F-24

Unlike the floorplan agreement, the Company doesnot 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 floorplan 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

Property, plant and equipment are summarized as follows:

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 thanone year to 13 years, some of which include options to extend the leases for up to 10 years. Such renewal options werenot 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. Certain of the Company’s leases contain escalating rental payments based on an index. The Company’s lease agreements donot contain any material residual value guarantees or material restrictive covenants.

In the year ended* December 31, 2021,it was determined that facility leases related totwo locations in the Company’s Work Truck Solutions segment were impaired. Thesetwo* facilities were significantly downsized as part of a restructuring plan, and so it was determined that the carrying value exceeded the fair value of the facilities. As a result, an impairment of $1,211 was recorded in the year ended* December 31, 2021*and is recorded under Impairment charges in the Company’s Consolidated Statements of Income, with an offset being a reduction to the Operating lease - right of use asset on the Company’s Consolidated Balance Sheets. Going forward, the remaining balance of the right of use asset for the impaired leases is being amortized on a straight line basis. The lease liability for the impaired leases will continue to be amortized over the life of the lease.

As allowed under ASC842, the Company has adopted the following practical expedients:

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:

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Cash Flow

Supplemental cash flow information related to leases is as follows:

Balance Sheet

Supplemental balance sheet information related to leases is as follows:

Lease Maturities

Maturities of leases were as follows:

7. Other Intangible Assets

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

F-28

Amortization expense for intangible assets was $10,520, $10,520 and $10,682 for the years ended* December 31, 2023,*2022 and2021, respectively. Estimated amortization expense for the nextfive years is as follows:

The weighted average remaining life for intangible assets is 7.2 years at* December 31, 2023*.

8. Long‑Term Debt

Long‑term debt is summarized below:

F-29

On* January 5, 2023,the Company entered into AmendmentNo.* 1 to Credit Agreement and Revolving Credit Commitment Increase Supplement (“AmendmentNo. 1”) by and among the Company, the Borrowers, the financial institutions listed in AmendmentNo. 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 AmendmentNo.* 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 AmendmentNo.* 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 AmendmentNo. 2, the Company had outstanding loans of $750 against its corporate-owned life insurance policies as of* December 31, 2023* included in Other long-term liabilities on the Consolidated Balance Sheets. On* January 29, 2024,the Company entered into AmendmentNo.* 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 to1.00 for each Reference Period to (i)3.50 to1.00 for each Reference Period ending on or prior to* September 30, 2023, (ii)4.25 to1.00* for the Reference Period ending on* December 31, 2023, (iii)4.00 to1.00* for each Reference Period ending on* March 31, 2024and June 30, 2024,and (iv)3.50 to1.00* for each Reference Period ending on* September 30, 2024*and thereafter.

The Company will be 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 aone 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 bezero for purposes of calculating the foregoing interest rates in the Credit Agreement.

Following AmendmentNo. 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 amountnot 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 ASC470-50, 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, 2023*, the Company had outstanding borrowings under the term loan of $189,413, $47,000 in outstanding borrowings on the revolving credit facility and remaining borrowing availability of $102,450. 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 Company made a voluntary payment of $20,000 on its debt on* March 31, 2021.*

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, the Credit Agreement requires the Company to have a Leverage Ratio ofnot more than 3.50 to1.00 as of the last day of any fiscal quarter commencing with the fiscal quarter ending* June 30, 2021,and to have a Consolidated Interest Coverage Ratio (as defined in the Credit Agreement) ofnot* less than 3.00 to1.00 as of the last day of any fiscal quarter commencing with the fiscal quarter ending* June 30, 2021.As of December 31, 2023*, the Company is in compliance with the respective covenants.

F-30

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, 2019through May 31, 2024.The Company mayhave counterparty credit risk resulting from the interest rate swap, which it monitors on an on-going basis. The risk lies withone 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 thefirst* quarter of2020, 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 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 loss into earnings during the years ended December 31, 2023and2022* was ($1,163) and ($1,163), respectively. A mark-to-market adjustment of $476 and $476 was recorded as Interest expense in the Consolidated Statements of Income for the years ended* December 31, 2023and2022*, 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 loss. The amortization from Accumulated other comprehensive income into earnings from the previous dedesignation has been adjusted as of June 9, 2021to 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. The amount expected to be amortized from Accumulated other comprehensive loss into earnings in the nexttwelve* months is $286.

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, 2024through June 9, 2026.The Company mayhave counterparty credit risk resulting from the interest rate swap, which it monitors on an on-going basis. The risk lies withtwo* 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 interest rate swaps' 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. The interest rate swap’s positive fair value at* December 31, 2022* was $7,039, of which $4,120 and $2,919 are included in Prepaid and other current assets and Other long-term assets on the Consolidated Balance Sheet, respectively.

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, 2023and2022* was $20,293 and $7,847, 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, 2023*, rates were based on prime (8.50% at* December 31, 2023*) plus a margin ranging from 0% to 8%. During2023, the Company incurred $344 in interest on the bailment pool arrangement. During2022, the Company incurred $11 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, 2016and expired on July**31,* 2017, which the Company renewed through* February 24, 2024.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, 2023and2022* is $2,217 and $1,211, respectively. During2023, the Company incurred $734 in interest on the floor plan arrangements. During2022, the Company incurred $321 in interest on the floor plan arrangements.

9. Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities are summarized as follows:

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 ofone totwo 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 ofone year after the date of purchase by the end‑user. Certain snowplows only provide for aone 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 donot provide a historical warranty record to assess. All of the Company’s warranties are assurance-type warranties. The warranty reserve is $6,957 at* December 31, 2023* 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. At* December 31, 2022*, the warranty reserve is $7,876 of which $3,318 is included in Other long term liabilities and $4,558 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:

11. Income Taxes

The provision for income tax expense consists of the following:

A reconciliation of income tax expense computed at the federal statutory rate to the provision for income taxes for the years ended* December 31, 2023,*2022 and2021 is as follows:

F-33

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

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.

F-34

State operating loss carry forwards for tax purposes will result in future tax benefits of approximately $1,203. These loss carry-forwards began to expire in2021. 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 $1,545 is necessary at* December 31, 2023* 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 $460 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:

The amount of the unrecognized tax benefits that would affect the effective tax rate, if recognized, was approximately $1,701 at* December 31, 2023*. The Company recognizes interest and penalties related to the unrecognized tax benefits in income tax expense. Approximately $662 and $581 of accrued interest and penalties is reported as an income tax liability at* December 31, 2023and2022*, respectively. The liability for unrecognized tax benefits is reported in Other Long‑term Liabilities on the Consolidated Balance Sheets at* December 31, 2023and2022*.

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 2020,2021 and2022 for Federal and 2019 through2022 for most states. Tax returns for the2023 tax year havenot yet been filed.

Beginning in2022, the Tax Cuts and Jobs Act of2017 eliminated the option to deduct research and development expenditures in the year incurred and required taxpayers to amortize them over a period offive years for tax purposes. This mandatory capitalization requirement increases our 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 donot 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 $4,692 and $5,230 as of* December 31, 2023* and* December 31, 2022*, respectively, are included in Retiree benefits and deferred compensation in the Consolidated Balance Sheets. Postretirement benefits of $280 and $240 as of* December 31, 2023* and* December 31, 2022*, respectively, are included in Accrued expenses and other current liabilities in the Consolidated Balance Sheets.

F-35

Effective* January1,* 2004, the postretirement healthcare benefits were extended to all active employees of the Company as of* December31,* 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 toten years. All benefits terminate upon the death of the retiree. Employees who began working for the Company after* December**31,* 2003, arenot 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:

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

F-36

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

The discount rate used to determine the benefit obligation at* December 31, 2023and2022* is 4.7% and 5.0%, respectively. For* December 31, 2023*, the health care cost trend rate is assumed to be 7.5% beginning in2023 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 in2022 gradually reducing to an ultimate rate of 4.5% in 2031. For* December 31, 2021*, the health care cost trend rate is assumed to be 7.0% beginning in2021 gradually reducing to an ultimate rate of 4.5% in 2030.

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, 2023*, which hasnot yet been recognized in net periodic OPEB cost was a net actuarial gain of $3,025.

Defined contribution plan

The Company has a defined contribution plan, which qualifies under Section401(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 $5,172, $4,999 and $4,334 for the years ended* December 31, 2023,2022 and2021, respectively. The Company made non‑discretionary employer contributions of $0, $0 and $0 in the years ended December 31, 2023,2022 and2021, respectively. The Company made discretionary employer contributions of $470 in the year ended December 31, 2021.*

F-37

Non‑qualified plan

The Company also maintains a supplemental non‑qualified plan for certain officers and other key employees. Expense for this plan was $222, $378 and $475 for the years ended* December 31, 2023,2022 and2021, respectively. The amount accrued was $9,229, $9,420 and $11,139 as of December 31, 2023,2022 and2021, 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, 2023,2022 and2021, respectively. The Company holds assets that are substantially equivalent to the liability and are intended to fund the liability. Non-qualified plan assets of $9,195 and $8,874 at December 31, 2023* and* December 31, 2022*, respectively, are included as Non-qualified benefit plan assets on the Consolidated Balance Sheets. The Company had outstanding loans of $750 against its corporate-owned life insurance policies as of* December 31, 2023* included in Other long-term liabilities on the Consolidated Balance Sheets, see Note8 for additional information.

13. Stock‑Based Compensation

2010 Stock Incentive Plan

In in* May 2010,the Company’s Board of Directors and stockholders adopted the2010* Stock Incentive Plan (the*“2010* Plan”). The material terms of the performance goals under the2010 Plan, as amended and restated, were approved by stockholders at the Company’s2014 annual meeting of stockholders and the plan’s term was extended further by the stockholders at the Company’s2020 annual meeting of stockholders. The2010 Plan provides for the issuance of nonqualified stock options, incentive stock options, stock appreciation rights, restricted stock awards and restricted stock units, any of which* maybe performance‑based, and for incentive bonuses, which maybe 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 maybe issued pursuant to all awards under the2010* Plan. As of* December 31, 2023*, the Company had 340,160 shares of common stock available for future issuance of awards under the2010 Plan. The shares of common stock to be issued under the2010 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 to2013, RSUs were only issued to directors. However, in2013, the Company changed the timing and form of management’s annual stock grants and began to grant RSUs to management. RSUs donot carry voting rights. While all non-employee director RSUs participate in dividend equivalents, there aretwo classes of management RSUs,one that participates in dividend equivalents, and asecond that doesnot participate in dividend equivalents. Each RSU represents the right to receiveone share of the Company’s common stock and is subject to time based vesting restrictions. Participants arenot required to pay any consideration to the Company at either the time of grant of a RSU or upon vesting.

In2013, the Company’s compensation committee approved a retirement provision for RSUs issued to management. The retirement provision provides that members of management who either (1) are age65 or older or (2) have at leastten years of service and are at least age55 will continue to vest in unvested RSUs upon retirement. As the retirement provision doesnot qualify as a substantive service condition, the Company incurred $1,887, $3,724 and $2,988 in additional expense related to each year's grant in the years ended* December 31, 2023,*2022 and2021, respectively, as a result of accelerated stock based compensation expense for employees who meet the thresholds of the retirement provision. The Company’s nominating and governance committee also approved a retirement provision for the RSUs issued to non‑employee directors that accelerates the vesting of such RSUs upon retirement. Such awards are fully expensed immediately upon grant in accordance with ASC718, as the retirement provision eliminates substantive service conditions associated with the awards.

F-38

A summary of RSU activity for the years ended* December 31, 2023,*2022 and2021 is as follows:

The Company recognized $3,700, $2,947 and $3,292 of compensation expense related to the RSU awards in the years ended* December 31, 2023,2022 and2021, respectively. The unrecognized compensation expense, net of expected forfeitures, calculated under the fair value method for shares that were, as of December 31, 2023*, expected to be earned through the requisite service period was approximately $2,474 and is expected to be recognized through2026.

Beginning in2019, 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 ofone 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 eventsno 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 ofone 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 the2010 Plan in thefirst quarter of2023,2022 and2021 that are subject to performance conditions over athree year performance period beginning in the year of the grant. Upon meeting the prescribed performance conditions, employees will be issued shares which vest immediately at the end of the measurement period. Currently the Company expects participants to earn 42,555,24,688 and 29,888 shares related to the2023,2022 and2021 performance share grants, respectively. In accordance with ASC718, 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 thefirst quarter of2023 there were 16,502 performance share units that converted into RSUs related to the2020 performance share grants. The fair value per share of the awards is the closing stock price on the date of grant, which was $37.36, $37.57 and $49.96 for the2023,2022 and2021 grants, respectively. The Company recognized ($2,747), $3,783 and $2,502 of compensation expense related to the awards in the years ended* December 31, 2023*,2022 and2021, respectively. The unrecognized compensation expense calculated under the fair value method for shares that were, as of* December 31, 2023*, expected to be recognized through the requisite service period was $776 and is expected to be recognized through2026.

14. Earnings Per Share

Basic earnings per share of common stock is computed by dividing net income by the weighted average number of common shares outstanding during the period. Diluted earnings per share of common stock is computed by dividing net income by the weighted average number of common shares, using the two‑class method. As the Company has granted RSUs that both participate in dividend equivalents and donot 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. Under this method, all earnings (distributed and undistributed) are allocated to common shares and participating securities based on their respective rights to receive dividends. Diluted net earnings per share is calculated by dividing net income attributable to common stockholders by the weighted average number of common stock and dilutive common stock outstanding during the period. Potential common shares in the diluted net earnings per share computation are excluded to the extent that they would be anti-dilutive.

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 doesnot 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 isnot currently a party to any environmental‑related claims or legal matters.

16. Segments

The Company operates throughtwo 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’stwo current reportable business segments are described below.

F-40

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 our 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. Separate financial information is available for thetwo 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 to10% 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.

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:

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 inone 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, 2023and2022*, no shares of preferred stock were issued and outstanding.

Common Stock

The Company has 200,000,000 shares of common stock authorized, of which 22,983,965 and 22,886,793 shares were issued and outstanding as of* December 31, 2023and2022*, respectively. The par value of the common stock is $0.01 per share.

The holders of common stock are entitled toone 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, 2023,*2022 and2021 are as follows:

19. Changes in Accumulated Other Comprehensive Income by Component

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

(a) – These components are included in the computation of benefit plan costs in Note12.

F-43

Changes to accumulated other comprehensive income by component for the year ended* December 31, 2022* is as follows:

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

20. Quarterly Financial Information (Unaudited)

F-44

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

21. Recent Accounting Pronouncements

In* November 2023,the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update ("ASU")2023-07, “Segment Reporting (Topic280*): 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 will adopt this standard in fiscal2024.* The Company has identified and is in the process of implementing changes to processes and controls to meet the standard’s updated reporting and disclosure requirements.

In* December 2023,the FASB issued ASU2023*-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.

22. Subsequent Events

On* January 29, 2024,the Company entered into AmendmentNo.* 3 to Credit Agreement (“AmendmentNo. 3”) by and among the Company, the Borrowers, the financial institutions listed in AmendmentNo. 3 as lenders, and JPMorgan Chase Bank, N.A., as administrative agent, which amended the Credit Agreement by modifying the minimum required Leverage Ratio (as defined in the Credit Agreement) of Douglas Dynamics, L.L.C, which is measured as of the last day of each Reference Period (as defined in the Credit Agreement), from 3.50 to1.00 for each Reference Period to (i)3.50 to1.00 for each Reference Period ending on or prior to* September 30, 2023, (ii)4.25 to1.00* for the Reference Period ending on* December 31, 2023, (iii)4.00 to1.00* for each Reference Period ending on* March 31, 2024and June 30, 2024,and (iv)3.50 to1.00* for each Reference Period ending on* September 30, 2024*and thereafter.

In* January 2024,the Company implemented the2024* Cost Savings Program, which is primarily in the form of salaried headcount reductions and impacted both the Work Truck Attachments segment and corporate functions. The Company expects to incur restructuring expenses related to this program, primarily in thefirst quarter of2024.