DOUGLAS DYNAMICS INC

(In thousands except share and per share data)

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The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information. Accordingly, they donot include all of the information and footnotes required by generally accepted accounting principles for fiscal year-end financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. For further information, refer to the financial statements and related footnotes included in our2023 Form10-K (Commission FileNo. 001-34728) filed with the Securities and Exchange Commission on* February 27, 2024.*

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The Company conducts business intwo segments: Work Truck Attachments and Work Truck Solutions. Under this reporting structure, the Company’stwo reportable business segments are as follows:

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Work Truck Attachments. The Work Truck Attachments segment includes commercial snow and ice management attachments sold under the FISHER®, WESTERN® and SNOWEX® brands, as well as our vertically integrated products. This segment consists of our operations that manufacture and sell snow and ice control 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.

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See Note15 to the Unaudited Condensed Consolidated Financial Statements for financial information regarding these segments.

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Interim Condensed Consolidated Financial Information

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The accompanying Condensed Consolidated Balance Sheet as of* September 30, 2024*, the Condensed Consolidated Statements of Operations and Comprehensive Income and the Condensed Consolidated Statements of Shareholders’ Equity for thethree andnine months ended* September 30, 2024and2023*, and the Condensed Consolidated Statements of Cash Flows for thenine months ended* September 30, 2024and2023*, have been prepared by the Company and havenot been audited.

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The Company’s Work Truck Attachments segment is seasonal and, consequently, its results of operations and financial condition vary from quarter-to-quarter. Because of this seasonality, the results of operations of the Work Truck Attachments segment for any quarter* maynot* be indicative of results of operations that* maybe achieved for a subsequent quarter or the full year, and maynot* be similar to results of operations experienced in prior years. The Company attempts to manage the seasonal impact of snowfall on its revenues in part through its pre-season sales program. This pre-season sales program encourages the Company’s distributors to re-stock their inventory of Work Truck Attachments products during thesecond andthird quarters in anticipation of the peakfourth quarter retail sales period by offering favorable pre-season pricing and payment deferral until thefourth quarter. Thus, the Company’s Work Truck Attachments segment tends to generate its greatest volume of sales during thesecond andthird quarters. By contrast, its revenue and operating results tend to be lowest during thefirst quarter, as management believes the end-users of Work Truck Attachments products prefer to wait until the beginning of a snow season to purchase new equipment and as the Company’s distributors sell off Work Truck Attachments inventory and wait for the pre-season sales incentive period to re-stock inventory. Fourth quarter sales vary from year-to-year as they are primarily driven by the level, timing and location of snowfall during the quarter. This is because most of the Company’s Work Truck Attachmentsfourth quarter sales and shipments consist of re-orders by distributors seeking to restock inventory to meet immediate customer needs caused by snowfall during the winter months. In addition, due to the factors noted above, Work Truck Attachments working capital needs are highest in thesecond andthird quarters as its accounts receivable rise from pre-season sales. These working capital needs decline in thefourth quarter as the Company receives payments for its pre-season shipments.

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Revenue Streams

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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.

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Work Truck Attachments

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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.

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

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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.

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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.

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Work Truck Solutions

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The Work Truck Solutions segment primarily participates in the truck and vehicle upfitting industry in the United States. Customers are billed separately for the truck chassis by the chassis manufacturer. The Company only records sales for the amount of the upfit, excluding the truck chassis. Generally, the Company obtains the truck chassis from the truck chassis manufacturer through either its floor plan agreement with a financial institution or bailment pool agreement with the truck chassis manufacturer. Additionally, in some instances the Company upfits chassis which are owned by the end customer. For truck chassis acquired through the floor plan agreement, the Company holds title to the vehicle from the time the chassis is received by the Company until the completion of the up-fit. Under the bailment pool agreement, the Company 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.

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The Work Truck Solutions segment hasfour revenue streams, as identified below.

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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.

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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.

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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.

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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.

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Disaggregation of Revenue

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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.

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Revenue by customer type was as follows:

Revenue by timing of revenue recognition was as follows:

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Contract Balances

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The following table shows the changes in the Company’s contract liabilities during thethree andnine months ended* September 30, 2024and2023*, respectively:

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The Company receives payments from customers based upon contractual billing schedules. Contract assets include amounts related to the contractual right to consideration for completed performance obligations. There wereno contract assets as of* September 30, 2024* or2023. 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 our municipal rebate program, and are realized with the associated revenue recognized under the contract.

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The Company recognized revenue of $1,826 and $1,594 during thethree months ended* September 30, 2024and2023*, respectively, which was included in contract liabilities at the beginning of each period. The Company recognized revenue of $4,009 and $4,531 during thenine months ended* September 30, 2024and2023*, respectively, which was included in contract liabilities at the beginning of each period.

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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.

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The following table rolls forward the activity related to credit losses for trade accounts receivable at each segment, and on a consolidated basis for thenine months ended* September 30, 2024and2023*:

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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).

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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:

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(a) Included in Non-qualified benefit plan assets is the cash surrender value of insurance policies on various individuals that are associated with the Company. The carrying amount of these insurance policies approximates their fair value and is considered Level2 inputs. The Company had outstanding loans of $546 and $750 against these Non-qualified benefit plan assets as of* September 30, 2024* and* December 31, 2023*, respectively, included in Other long-term liabilities on the Condensed Consolidated Balance Sheets, respectively.

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(b) Valuation models are calibrated to initial trade price. Subsequent valuations are based on observable inputs to the valuation model (e.g. interest rates and credit spreads). Model inputs are changed only when corroborated by market data. A credit risk adjustment is made on each swap using observable market credit spreads. Thus, inputs used to determine fair value of the interest rate swap are Level2 inputs. Interest rate swaps of $1,343 and $220 at* September 30, 2024* are included in Prepaid and other current assets and Other long-term assets, respectively. Interest rate swaps of $3,174 and $859 at* December 31, 2023* are included in Prepaid and other current assets and Other long-term assets, respectively.

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

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Inventories consist of the following: ​

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The inventories in the table above donot include truck chassis inventory financed through a floor plan financing agreement, which are recorded separately on the balance sheet. 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* September 30, 2024* and* December 31, 2023*, the Company had $3,459 and $2,217, respectively, of chassis inventory and $3,459 and $2,217 of related floor plan financing obligation, respectively. The Company recognizes revenue associated with upfitting and service installations net of the truck chassis.

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During thethree andnine months ended* September 30, 2024*, the Company closed on a sale leaseback transaction with an unrelatedthird party. Under this transaction, the Company sold seven properties with a combined net book value of $21,852, see Note7 for additional information.

Property, plant and equipment are summarized as follows: ​

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The Company has operating leases for manufacturing and upfit facilities, land and parking lots, warehousing space and certain equipment. The leases have remaining lease terms of less thanone year to 15 years, some of which include options to extend the leases for up to 20 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.

During thethree andnine months ended* September 30, 2024*, the Company closed on a sale leaseback transaction with an unrelatedthird party. Under this transaction, the Company sold seven properties with a combined net book value of $21,852 for gross proceeds of $64,150, which was reduced by transaction costs of $5,494 for net cash proceeds of approximately $58,656. The properties in the sale leaseback transaction are comprised ofthree facilities located in Milwaukee, Wisconsin andfour additional facilities located in each of Huntley, Illinois; Manchester, Iowa; Rockland, Maine; and Madison Heights, Michigan, totaling approximately 780,000 square feet of manufacturing and upfitting space. The lease agreement has an initial term of 15 years, withtwo optional 10-year renewal options. The Company recognized a gain of $42,298 on this transaction, which is included in Gain on sale leaseback transaction in the Condensed Consolidated Statements of Operations and Comprehensive Income. Right-of-use assets and lease liabilities recognized related to this sale leaseback transaction were $51,879 and $51,879, respectively.

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Lease Expense

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

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Cash Flow

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Supplemental cash flow information related to leases is as follows:

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Balance Sheet

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Supplemental balance sheet information related to leases is as follows:

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Lease Maturities

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Maturities of leases were as follows:

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

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Amortization expense for intangible assets was $1,630 and $2,630 for thethree months ended* September 30, 2024and2023*, respectively. Amortization expense for intangible assets was $5,890 and $7,890 for thenine months ended* September 30, 2024and2023*, respectively. Estimated amortization expense for the remainder of2024 and each of the succeedingfive years is as follows:

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Long-term debt is summarized below:

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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, 2024and thereafter. Deferred financing costs of $279 relating to entry into AmendmentNo.* 3 are being amortized over the term of the loan. On* January 5, 2023,the Company entered into that certain 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 relating to entry into AmendmentNo. 1 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 $546 and $750 against its corporate-owned life insurance policies as of* September 30, 2024* and* December 31, 2023*, respectively, included in Other long-term liabilities on the Condensed Consolidated Balance Sheets.

The Company is required to pay a fee for unused amounts under the senior secured revolving facility in an amount ranging from 0.150% to 0.300% of the average daily unused portion of the senior secured revolving credit facility, depending on Douglas Dynamics, L.L.C.'s ("DDI LLC") Leverage Ratio (as defined in the Credit Agreement). The Credit Agreement provides that the senior secured term loan facility will bear interest at (i) the Term SOFR Rate for the applicable interest period plus (ii) a margin ranging from 1.375% to 2.00%, depending on the DDI LLC’s Leverage Ratio. The Credit Agreement provides that the Revolving Loan Borrowers have the option to select whether the senior secured revolving credit facility borrowings will bear interest at either (i)(a) the Term SOFR Rate for the applicable interest period plus (b)0.10% plus (c) a margin ranging from 1.375% to 2.00%, depending on DDI LLC’s Leverage Ratio, or (ii) a margin ranging from 0.375% to 1.00% per annum, depending on DDI LLC’s Leverage Ratio, plus the greatest of (which if the following would be less than 1.00%, such rate shall be deemed to be 1.00%) (a) the Prime Rate (as defined in the Credit Agreement) in effect on such day, (b) the NYFRB Rate (as defined in the Credit Agreement) plus 0.50% and (c) the Term SOFR Rate for 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 is available in the form of letters of credit and $15,000 is 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.*

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At* September 30, 2024*, the Company had outstanding borrowings under its term loan of $147,497, $67,000 in outstanding borrowings on its revolving credit facility, and remaining borrowing availability of $82,450. At* December 31, 2023*, the Company had outstanding borrowings under its term loan of $189,413, $47,000 in outstanding borrowings on its revolving credit facility, and remaining borrowing availability of $102,450. During thethree andnine months ended* September 30, 2024*, the Company made a pre-payment of $42,000 of debt amortization principal payments under its Credit Agreement using a portion of the proceeds from the sale leaseback transaction, as described in Note7. During the year ended* December 31, 2023,*the Company made a voluntary pre-payment of $10,000 of debt amortization principal payments under the Company's Credit Agreement.

The Credit Agreement includes customary representations, warranties and negative and affirmative covenants, as well as customary events of default and certain cross default provisions that could result in acceleration of the Credit Agreement. In addition, as a result of the modifications to the minimum required Leverage Ratio under AmendmentNo. 3 to the Credit Agreement as discussed above, the Credit Agreement requires the Company to have a Leverage Ratio of (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, 2024and thereafter, 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 September 30, 2024*, the Company was in compliance with the respective covenants under the Credit Agreement.

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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 income (loss) on the Condensed Consolidated Balance Sheets would be amortized into interest expense on a straight-line basis through the life of the swap. The amount amortized from Accumulated other comprehensive income (loss) into earnings during thethree* months ended* September 30, 2024and2023* was $0 and ($291), respectively. The amount amortized from Accumulated other comprehensive income (loss) into earnings during thenine months ended* September 30, 2024and2023* was ($485) and ($873), respectively. A mark-to-market adjustment of $0 and $119 was recorded as Interest expense in the Condensed Consolidated Statements of Operations and Comprehensive Income for thethree months ended* September 30, 2024and2023*, respectively, related to the swap. A mark-to-market adjustment of $198 and $357 was recorded as Interest expense in the Condensed Consolidated Statements of Operations and Comprehensive Income for thenine months ended* September 30, 2024and2023*, respectively, related to the swap.

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On* June 9, 2021,in conjunction with entering into the Credit Agreement described above, the Company re-designated its swap. As a result, the swap will be recorded at fair value with changes recorded in Accumulated other comprehensive income (loss). The amortization from Accumulated other comprehensive income (loss) into earnings from the previous dedesignation has been adjusted as of June 9, 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. As of September 30, 2024*, the amount in Accumulated other comprehensive income has been fully amortized into earnings.

On* May 19, 2022,the Company entered into an interest rate swap agreement to further reduce its exposure to interest rate volatility. The interest rate swap has a notional amount of $125,000 effective for the period May 31, 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.

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The interest rate swaps' positive fair value at* September 30, 2024* was $1,563, of which $1,343 and $220 are included in Prepaid and other current assets and Other long-term assets on the Condensed Consolidated Balance Sheet, respectively. 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 Condensed Consolidated Balance Sheet, respectively.

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Accrued expenses and other current liabilities are summarized as follows:

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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 oftwo 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. All of the Company’s warranties are assurance-type warranties. Certain snowplows only provide for aone year warranty. The Company determines the amount of the estimated warranty costs (and its corresponding warranty reserve) 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. The warranty reserve was $6,698 at* September 30, 2024*, of which $2,710 is included in Other long-term liabilities and $3,988 is included in Accrued expenses and other current liabilities in the accompanying Condensed Consolidated Balance Sheet. The warranty reserve was $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 Condensed Consolidated Balance Sheet.

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

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Basic earnings per share of common stock is computed by dividing net income attributable to common shareholders by the weighted average number of common shares outstanding during the period. Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised into common stock or resulted in the issuance of common stock that then shared in the earnings of the Company. As the Company has granted certain equity awards that both participate in dividend equivalents and 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. All outstanding nonvested shares that contain non-forfeitable rights to dividends or dividend equivalents that participate in undistributed earnings with common stock are considered participating securities and are included in computing earnings per share pursuant to thetwo-class method. Potential common shares in the diluted earnings per share computation are excluded to the extent that they would be anti-dilutive.

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2010 Stock Incentive Plan and2024 Stock Incentive Plan**

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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 provided for the issuance of nonqualified stock options, incentive stock options, stock appreciation rights, restricted stock awards and restricted stock units (“RSUs”), 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 were available for issuance pursuant to all awards under the2010* Plan prior to the time that the2010 Plan was suspended, as described below.

In* February 2024,the Company’s Board of Directors adopted the2024* Stock Incentive Plan (the*“2024* Plan”), which was subsequently approved by stockholders in* April**2024.* The2024 Plan provides for the issuance of nonqualified stock options, stock appreciation rights, restricted stock awards and restricted stock units (“RSUs”), 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 1,227,660 shares of common stock maybe issued pursuant to all awards under the2024* Plan. At the time that the stockholders approved the2024 Plan, it replaced the2010 Plan, andno further awards* maybe issued under the2010* Plan. Awards that remain outstanding under the2010 Plan will remain outstanding under the2010 Plan in accordance with their terms.

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Equity awards issued to management under either the2010 Plan or the2024 Plan include a retirement provision under which 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 equity awards upon retirement. The retirement provision also stipulates that the employee remain employed by the Company forsix months after thefirst day of the fiscal year of the grant. As the retirement provision doesnot qualify as a substantive service condition, the Company incurred $2,457 and $3,249 in thenine months ended* September 30, 2024and2023*, respectively, in additional expense for employees who meet the thresholds of the retirement provision. In2013, the Company’s Nominating and Governance Committee of its Board of Directors approved a retirement provision for the RSUs issued to non-employee directors that accelerates the vesting of such awards upon retirement. Such awards are fully expensed immediately upon grant in accordance with ASC718, as the retirement provision eliminates substantive service conditions associated with the awards.

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Performance Share Unit Awards

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The Company has granted performance share units as performance-based awards under the2010 Plan that are subject to performance conditions over athree year performance period beginning in the year of the grant and, beginning with the2024 grant, includesthree 1-year measurement periods, as well as a vesting component based on a Total Shareholder Return ("TSR") modifier tied to the Company's relative total shareholder return in comparison to the total shareholder return of the S&P Small Cap600 Industrials market index. The total number of shares issued pursuant to performance share units* maybe increased, decreased, or unchanged based on this TSR modifier. Upon meeting the prescribed performance conditions, employees will be issued shares which vest immediately at the end of the performance period. 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. For the2024 grants, a Monte Carlo simulation has been used to account for the TSR market condition in the grant date fair value of the award, which was $26.60 per share.

The Company recognized $24 and ($361) of compensation expense related to the awards in thethree months ended* September 30, 2024and2023*, respectively. The Company recognized ($1,368) and $1,183 of compensation expense related to the awards in thenine months ended* September 30, 2024and2023*, respectively. The unrecognized compensation expense calculated under the fair value method for shares that were, as of* September 30, 2024*, expected to be earned through the requisite service period was approximately $185 and is expected to be recognized through2027.

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Restricted Stock Unit Awards

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RSUs are granted to both non-employee directors and management. RSUs donot carry voting rights. While all non-employee director RSUs participate in dividend equivalents, there aretwo potential 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.

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A summary of RSU activity for thenine months ended* September 30, 2024* is as follows:

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The Company recognized $770 and $361 of compensation expense related to the RSU awards in thethree months ended* September 30, 2024and2023*, respectively. The Company recognized $4,995 and $3,053 of compensation expense related to the RSU awards in thenine months ended* September 30, 2024and2023*. The unrecognized compensation expense calculated under the fair value method for shares that were, as of* September 30, 2024*, expected to be earned through the requisite service period was approximately $5,083 and is expected to be recognized through2027.

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For grants to non-employee directors, vesting occurs as of the grant date. Vested director RSUs are ‘‘settled’’ by the delivery to the participant or a designated brokerage firm 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 andone-half months after such termination of service. Vested management 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 vesting.

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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. In addition, the Company isnot currently a party to any environmental-related claims or legal matters.

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The Company’stwo reportable business segments are as follows:

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Work Truck Attachments. The Work Truck Attachments segment includes commercial snow and ice management attachments sold under the FISHER®, WESTERN® and SNOWEX® brands, as well as our vertically integrated products. This segment consists of our operations that manufacture and sell snow and ice control 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.

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Separate financial information is available for thetwo reportable segments. In addition, segment results include an allocation of all corporate costs to Work Truck Attachments and Work Truck Solutions.

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Segment performance is evaluated based on segment net sales and Adjusted EBITDA. Segment results include an allocation of all corporate costs.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.

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All intersegment sales are eliminated in consolidation. 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:

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The Company’s effective tax rate was 22.7% and 16.4% for thethree months ended* September 30, 2024and2023*, respectively. The Company’s effective tax rate was 24.5% and 20.9% for thenine months ended* September 30, 2024and2023*, respectively. The effective tax rate for thethree andnine months ended* September 30, 2023was impacted by a tax benefit related to the purchase of investment tax credits included in the Company's estimated annual effective tax rate. The effective tax rate for thethree* andnine months ended* September 30, 2024was impacted by the release of reserves for uncertain tax positions of $445. The effective tax rate for thenine* months ended* September 30, 2024*was impacted by the establishment of reserves for uncertain tax positions of $888.

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

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In* January 2024,the Company implemented the2024* Cost Savings Program, primarily in the form of restructuring charges for headcount reductions in both the Work Truck Attachments segment and corporate functions. For thethree andnine months ended* September 30, 2024*, $417 and $1,819 in pre-tax restructuring charges were recorded, respectively, related to workforce reduction costs and other related expenses and are included in Cost of sales and Selling, general, and administrative expense in the Condensed Consolidated Statements of Operations and Comprehensive Income. The Company's restructuring expenses are comprised of the following:

The following table summarizes the changes in the Company's accrued restructuring balance, which are included in Accrued expenses and other current liabilities in the accompanying Condensed Consolidated Balance Sheets. Such costs have been substantially all paid as of* September 30, 2024*.

In conjunction with the2024 Cost Savings Program, impairment charges of $1,224 were recorded in the Condensed Consolidated Statements of Operations and Comprehensive Income for thenine months ended* September 30, 2024* related to certain internally developed software at our Work Truck Attachments segment representing the full capitalized value of the software. In addition, management evaluated its assets outside of the internally developed software described above and determined that there wereno indicators of impairment.

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.

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Changes to accumulated other comprehensive income by component for thenine months ended* September 30, 2024* are as follows:

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Changes to accumulated other comprehensive income by component for thenine months ended* September 30, 2023*, are as follows:​

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