DOUGLAS DYNAMICS, INC

Previous wording

The following table sets forth, for the three months ended March 31, 2025 and 2024, the consolidated statements of operations of the Company and its subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. In the table below and throughout this “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” consolidated statements of operations data for the three months ended March 31, 2025 and 2024 have been derived from our unaudited consolidated financial statements. The information contained in the table below should be read in conjunction with our unaudited condensed consolidated financial statements and the related notes included elsewhere in this Quarterly Report on Form 10-Q.

Current wording

The following table sets forth, for the three and six months ended June 30, 2025 and 2024, the consolidated statements of operations of the Company and its subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. In the table below and throughout this “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” consolidated statements of operations data for the three and six months ended June 30, 2025 and 2024 have been derived from our unaudited consolidated financial statements. The information contained in the table below should be read in conjunction with our unaudited condensed consolidated financial statements and the related notes included elsewhere in this Quarterly Report on Form 10-Q.

Previous wording

The following table sets forth for the three months ended March 31, 2025 and 2024 the percentage of certain items in our Condensed Consolidated Statements of Operations and Comprehensive Loss, relative to net sales: ​

Current wording

The following table sets forth for the three and six months ended June 30, 2025 and 2024 the percentage of certain items in our Condensed Consolidated Statements of Operations and Comprehensive Income, relative to net sales: ​

Previous wording

Net sales were $115.1 million for the three months ended March 31, 2025 compared to $95.7 million in the three months ended March 31, 2024, an increase of $19.4 million, or 20.3%. The increase in sales for the three months ended March 31, 2025 compared to the same period in 2024 is a result of improved snowfall in our core markets leading to higher volumes in 2025, as well as strong municipal volumes. See below for a discussion of net sales for each of our segments.

Current wording

Net sales were $194.3 million for the three months ended June 30, 2025 compared to $199.9 million in the three months ended June 30, 2024, a decrease of $5.6 million, or 2.8%. Net sales were $309.4 million for the six months ended June 30, 2025 compared to $295.6 million in the six months ended June 30, 2024, an increase of $13.8 million, or 4.7%. The decrease in sales for the three months ended June 30, 2025 compared to the same period in 2024 is a result of lower volumes related to the timing of preseason shipments in our Attachments business between the second and third quarters, somewhat offset by price increase realization and strong municipal volumes at Solutions. The increase in sales for the six months ended June 30, 2025 compared to the same period in 2024 is a result of improved snowfall in our core markets leading to higher Attachments volumes in the first quarter of 2025, as well as price increase realization and strong municipal volumes at Solutions. See below for a discussion of net sales for each of our segments.

Previous wording

Net sales at our Work Truck Attachments segment were $36.5 million for the three months ended March 31, 2025 compared to $23.8 million in the three months ended March 31, 2024, an increase of $12.7 million. The increase in sales in the three months ended March 31, 2025 was due to improved snowfall in our core markets leading to higher volumes in 2025. The most recent snow season ended March 2025 was 12% below the 10-year average, but was approximately 30% better than the prior snow season, which saw snowfall 39.0% below the 10-year average.

Current wording

Net sales at our Work Truck Attachments segment were $108.1 million for the three months ended June 30, 2025 compared to $118.1 million in the three months ended June 30, 2024, a decrease of $10.0 million. Net sales at our Work Truck Attachments segment were $144.6 million for the six months ended June 30, 2025 compared to $142.0 million in the six months ended June 30, 2024, an increase of $2.6 million. The decrease in sales in the three months ended June 30, 2025 was due to lower volumes related to the timing of preseason shipments between the second and third quarters. The increase in sales in the six months ended June 30, 2025 is related to improved snowfall in our core markets leading to higher volumes in the first quarter of 2025. The most recent snow season ended March 2025 was 12% below the 10-year average, but was approximately 30% better than the prior snow season, which saw snowfall 39.0% below the 10-year average.

Previous wording

​Net sales at our Work Truck Solutions segment were $78.6 million for the three months ended March 31, 2025 compared to $71.8 million in the three months ended March 31, 2024, an increase of $6.8 million. The increase in sales for the three months ended March 31, 2025 compared to the same period in 2024 was a result of improved municipal volumes and price increase realization.

Current wording

​Net sales at our Work Truck Solutions segment were $86.2 million for the three months ended June 30, 2025 compared to $81.8 million in the three months ended June 30, 2024, an increase of $4.4 million. ​Net sales at our Work Truck Solutions segment were $164.8 million for the six months ended June 30, 2025 compared to $153.6 million in the six months ended June 30, 2024, an increase of $11.2 million. The increase in sales for the three and six months ended June 30, 2025 compared to the same periods in 2024 was a result of price increase realization and improved municipal volumes, somewhat offset by lower commercial volumes.

Previous wording

Cost of sales was $86.9 million for the three months ended March 31, 2025 compared to $76.7 million for the three months ended March 31, 2024, an increase of $10.2 million or 13.3%. The increase in cost of sales for the three months ended March 31, 2025 compared to the same period in the prior year was driven by the higher volumes. Cost of sales as a percentage of sales were 75.5% for the three months ended March 31, 2025, compared to 80.2% for the three months ended March 31, 2024. The decrease in cost of sales as a percentage of sales in the three months ended March 31, 2025 is related to the higher volumes and product mix.

Current wording

Cost of sales was $134.0 million for the three months ended June 30, 2025 compared to $138.6 million for the three months ended June 30, 2024, a decrease of $4.6 million or 3.3%. Cost of sales was $221.0 million for the six months ended June 30, 2025 compared to $215.3 million for the six months ended June 30, 2024, an increase of $5.7 million or 2.6%. The decrease in cost of sales for the three months ended June 30, 2025 compared to the same period in the prior year was driven by the lower volumes. The increase in cost of sales for the six months ended June 30, 2025 compared to the same period in the prior year was driven by the higher volumes. Cost of sales as a percentage of sales were 69.0% and 71.4% for the three and six months ended June 30, 2025, respectively, compared to 69.3% and 72.9% for the three and six months ended June 30, 2024, respectively. The decrease in cost of sales as a percentage of sales in the three months ended June 30, 2025 is related to efficiencies and product mix. The decrease in cost of sales as a percentage of sales in the six months ended June 30, 2025 is related to the higher volumes, efficiencies and product mix.

Previous wording

Gross profit was $28.1 million for the three months ended March 31, 2025 compared to $18.9 million for the three months ended March 31, 2024, an increase of $9.2 million, or 48.7%. The change in gross profit is attributable to the changes in sales as discussed above under “—Net Sales.” As a percentage of net sales, gross profit increased from 19.8% for the three months ended March 31, 2024 to 24.5% for the corresponding period in 2025. The reasons for the change in gross profit as a percentage of net sales are the same as those relating to the changes in cost of sales as a percentage of sales discussed above under “—Cost of Sales.”

Current wording

Gross profit was $60.3 million for the three months ended June 30, 2025 compared to $61.3 million for the three months ended June 30, 2024, a decrease of $1.0 million, or 1.6%. Gross profit was $88.4 million for the six months ended June 30, 2025 compared to $80.2 million for the six months ended June 30, 2024, an increase of $8.2 million, or 10.2%. The change in gross profit is attributable to the changes in sales as discussed above under “—Net Sales.” As a percentage of net sales, gross profit increased from 30.7% for the three months ended June 30, 2024 to 31.0% for the corresponding period in 2025. As a percentage of net sales, gross profit increased from 27.1% for the six months ended June 30, 2024 to 28.6% for the corresponding period in 2025. The reasons for the changes in gross profit as a percentage of net sales are the same as those relating to the changes in cost of sales as a percentage of sales discussed above under “—Cost of Sales.”

Previous wording

Selling, general and administrative expenses, including intangibles amortization, were $24.9 million for the three months ended March 31, 2025 compared to $24.1 million for the three months ended March 31, 2024, an increase of $0.8 million, or 3.3%. The increase in the three months ended March 31, 2025 is related to higher stock-based compensation expense of $1.8 million, somewhat offset by lower intangibles amortization of $1.1 million related to an asset becoming fully amortized when compared to the prior year.

Current wording

Selling, general and administrative expenses, including intangibles amortization, were $23.3 million for the three months ended June 30, 2025 compared to $25.0 million for the three months ended June 30, 2024, a decrease of $1.7 million, or 6.8%. Selling, general and administrative expenses, including intangibles amortization, were $48.2 million for the six months ended June 30, 2025 compared to $49.1 million for the six months ended June 30, 2024, a decrease of $0.9 million, or 1.8%. The decrease in the three months ended June 30, 2025 is related to lower stock-based compensation expense of $0.9 million and lower employee benefits costs of $0.8 million. The decrease in the six months ended June 30, 2025 is related to lower intangibles amortization of $1.2 million related to an asset becoming fully amortized when compared to the prior year and lower employee benefits costs of $0.9 million, somewhat offset by higher stock-based compensation expense of $0.9 million and higher incentive-based compensation of $0.5 million.

Previous wording

Impairment charges were $1.2 million in the three months ended March 31, 2024. The impairment charges in 2024 relate to certain internally developed software at our Work Truck Attachments segment and represent the full capitalized value of the software.

Current wording

Impairment charges were $1.2 million in the six months ended June 30, 2024. The impairment charges in 2024 relate to certain internally developed software at our Work Truck Attachments segment and represent the full capitalized value of the software.

Previous wording

Debt modification expense was $0.2 million in the three months ended March 31, 2025. The debt modification expense in 2025 related to fees incurred in conjunction with the Company’s March 26, 2025 refinancing of its term loan and revolving credit facilities by virtue of entering into the Credit Agreement.

Current wording

Debt modification expense was $0.2 million in the six months ended June 30, 2025. The debt modification expense in 2025 related to fees incurred in conjunction with the Company’s March 26, 2025 refinancing of its term loan and revolving credit facilities by virtue of entering into the Credit Agreement.

Previous wording

Loss on extinguishment of debt was $0.2 million in the three months ended March 31, 2025. The loss on extinguishment of debt in 2025 related to fees incurred in conjunction with the Company’s March 26, 2025 refinancing of its term loan and revolving credit facilities by virtue of entering into the Credit Agreement.

Current wording

Loss on extinguishment of debt was $0.2 million in the six months ended June 30, 2025. The loss on extinguishment of debt in 2025 related to fees incurred in conjunction with the Company’s March 26, 2025 refinancing of its term loan and revolving credit facilities by virtue of entering into the Credit Agreement.

Previous wording

Interest expense was $2.4 million for the three months ended March 31, 2025, a decrease compared to the $3.5 million incurred in the same period in the prior year. The decrease in interest expense for the three months ended March 31, 2025 was due to lower interest on our revolver of $0.7 million due to having lower revolver borrowings during the quarter compared to the prior year, as well as lower interest on our term loan of $0.5 million.

Current wording

Interest expense was $3.0 million for the three months ended June 30, 2025, a decrease compared to the $4.1 million incurred in the same period in the prior year. Interest expense was $5.4 million for the six months ended June 30, 2025, a decrease compared to the $7.6 million incurred in the same period in the prior year. The decrease in interest expense for the three months ended June 30, 2025 was due to lower interest on our revolver of $0.7 million due to having lower revolver borrowings during the quarter compared to the prior year, as well as lower interest on our term loan of $0.7 million, somewhat offset by higher floor plan interest of $0.4 million. The decrease in interest expense for the six months ended June 30, 2025 was due to lower interest on our revolver of $1.4 million due to having lower revolver borrowings compared to the prior year, as well as lower interest on our term loan of $1.2 million, somewhat offset by higher floor plan interest of $0.4 million.

Previous wording

The Company’s effective tax rate was 69.8% and 16.0% for the three months ended March 31, 2025 and 2024, respectively. The effective tax rate for the three months ended March 31, 2025 was impacted by discrete tax expense of $0.2 million related to excess tax from stock compensation, and due to the low pre-tax income in the period, the rate was more significantly affected. The effective tax rate for the three months ended March 31, 2024 was impacted by discrete tax expense of $0.4 million related to excess tax from stock compensation.

Current wording

The Company’s effective tax rate was 24.0% and 24.2% for the three months ended June 30, 2025 and 2024, respectively. The Company’s effective tax rate was 24.6% and 27.9% for the six months ended June 30, 2025 and 2024, respectively. The effective tax rate for the three and six months ended June 30, 2025 was lower than the same periods in 2024 due to the establishment of reserves for uncertain tax positions of $0.9 million in the prior year.

Previous wording

Net income (loss) for the three months ended March 31, 2025 was $0.1 million, compared to ($8.4) million for the corresponding period in 2024, an increase of $8.5 million. The change in net income (loss) for the three months ended March 31, 2025 was driven by the factors described above under “— Net Sales,” “— Cost of Sales,” “— Selling, General and Administrative Expense,” “— Impairment Charges,” “—Interest Expense," and “— Income Taxes.” As a percentage of net sales, net income (loss) was 0.1% for the three months ended March 31, 2025 compared to (8.7%) for the three months ended March 31, 2024.

Current wording

Net income for the three months ended June 30, 2025 was $26.0 million, compared to $24.3 million for the corresponding period in 2024, an increase of $1.7 million. Net income for the six months ended June 30, 2025 was $26.1 million, compared to $16.0 million for the corresponding period in 2024, an increase of $10.1 million. The change in net income for the three and six months ended June 30, 2025 was driven by the factors described above under “— Net Sales,” “— Cost of Sales,” “— Selling, General and Administrative Expense,” “— Impairment Charges,” “— Debt Modification Expense,” “— Loss on Extinguishment of Debt,” “—Interest Expense," and “— Income Taxes.” As a percentage of net sales, net income was 13.4% for the three months ended June 30, 2025 compared to 12.2% for the three months ended June 30, 2024. As a percentage of net sales, net income was 8.4% for the six months ended June 30, 2025 compared to 5.4% for the six months ended June 30, 2024.

Previous wording

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

Current wording

On February 16, 2022, our Board of Directors authorized the purchase of up to $50.0 million in shares of common stock at market value**.** This authorization does not have an expiration date. Repurchases under the program may be made in the open market, in privately negotiated transactions or otherwise, with the amount and timing of repurchases depending on market conditions and corporate needs. We may also, from time to time, enter into Rule 10b5-1 trading plans to facilitate repurchases of our shares under this authorization. This program does not obligate us to acquire any particular amount of shares and the program may be extended, modified, suspended or discontinued at any time at our discretion. We repurchased approximately $6.0 million in shares during the three and six months ended June 30, 2025.

Previous wording

As of March 31, 2025, we had $119.7 million of total liquidity, comprised of $7.2 million in cash and cash equivalents and $112.5 million of borrowing availability under our revolving credit facility, compared with total liquidity as of December 31, 2024 of approximately $154.6 million, comprised of approximately $5.1 million in cash and cash equivalents and borrowing availability of approximately $149.5 million under our revolving credit facility. The change in our total liquidity from December 31, 2024 is primarily due to the seasonality of our business. In addition, as discussed in Note 7 and Note 9 to the Unaudited Condensed Consolidated Financial Statements, in September 2024 we executed a sale leaseback transaction for gross proceeds of $64.2 million, and using a portion of the proceeds we paid down $42.0 million on our term loan. We have taken various steps to preserve liquidity. In January 2024, we implemented the 2024 Cost Savings Program, which was primarily in the form of restructuring charges for salaried headcount reductions and impacted both the Work Truck Attachments segment and corporate functions. We are also continuing to reduce discretionary spending where possible and deferring payments where appropriate within existing contractual terms, while remaining committed to long term growth projects. We expect that cash on hand and cash we generate from operations, as well as available credit under our senior credit facilities, will provide adequate funds for the primary uses of cash we describe above for the foreseeable future. From time to time, we may seek additional funding through the issuance of debt or equity securities to provide additional liquidity to fund acquisitions aligned with our strategic priorities and for other general corporate purposes.

Current wording

As of June 30, 2025, we had $90.5 million of total liquidity, comprised of $8.0 million in cash and cash equivalents and $82.5 million of borrowing availability under our revolving credit facility, compared with total liquidity as of December 31, 2024 of approximately $154.6 million, comprised of approximately $5.1 million in cash and cash equivalents and borrowing availability of approximately $149.5 million under our revolving credit facility. The change in our total liquidity from December 31, 2024 is primarily due to the seasonality of our business. In addition, as discussed in Note 7 and Note 9 to the Unaudited Condensed Consolidated Financial Statements, in September 2024 we executed a sale leaseback transaction for gross proceeds of $64.2 million, and using a portion of the proceeds we paid down $42.0 million on our term loan. We have taken various steps to preserve liquidity. In January 2024, we implemented the 2024 Cost Savings Program, which was primarily in the form of restructuring charges for salaried headcount reductions and impacted both the Work Truck Attachments segment and corporate functions. We are also continuing to reduce discretionary spending where possible and deferring payments where appropriate within existing contractual terms, while remaining committed to long term growth projects. We expect that cash on hand and cash we generate from operations, as well as available credit under our senior credit facilities, will provide adequate funds for the primary uses of cash we describe above for the foreseeable future. From time to time, we may seek additional funding through the issuance of debt or equity securities to provide additional liquidity to fund acquisitions aligned with our strategic priorities and for other general corporate purposes.

Previous wording

We had cash and cash equivalents of $7.2 million at March 31, 2025 compared to cash and cash equivalents of $5.1 million and $2.0 million at December 31, 2024 and March 31, 2024, respectively. The table below sets forth a summary of the significant sources and uses of cash for the periods presented.

Current wording

We had cash and cash equivalents of $8.0 million at June 30, 2025 compared to cash and cash equivalents of $5.1 million and $4.2 million at December 31, 2024 and June 30, 2024, respectively. The table below sets forth a summary of the significant sources and uses of cash for the periods presented.

Previous wording

Net cash used in operating activities decreased $20.3 million from the three months ended March 31, 2024 to the three months ended March 31, 2025. The decrease in cash used in operating activities was due to a $8.7 million increase in net income adjusted for reconciling items, and favorable changes in working capital and operating assets and liabilities of $11.6 million. The largest favorable change in working capital and operating assets and liabilities was a decrease in cash used in accounts payable related to the timing of supplier payments, somewhat offset by a decrease in cash provided by accounts receivable related to the timing of collections.

Current wording

Net cash used in operating activities decreased $6.4 million from the six months ended June 30, 2024 to the six months ended June 30, 2025. The decrease in cash used in operating activities was due to a $9.7 million increase in net income adjusted for reconciling items, somewhat offset by unfavorable changes in working capital and operating assets and liabilities of $3.3 million. The largest unfavorable change in working capital and operating assets and liabilities was an increase in cash used in inventory related to the procurement of truck chassis inventory at our Solutions segment, somewhat offset by a decrease in cash used in accounts payable related to the timing of supplier payments.

Previous wording

Net cash used in investing activities increased $0.8 million for the three months ended March 31, 2025 compared to the corresponding period in 2024 due to a higher level of capital expenditures.

Current wording

Net cash used in investing activities increased $2.4 million for the six months ended June 30, 2025 compared to the corresponding period in 2024 due to a higher level of capital expenditures.

Previous wording

Net cash provided financing activities increased $4.8 million for the three months ended March 31, 2025 as compared to the corresponding period in 2024. The increase in cash provided was related to having $12.0 million in revolver borrowings outstanding at March 31, 2025 and $0.0 million in revolver borrowings outstanding at December 31, 2024, compared to $55.0 million in revolver borrowings outstanding at March 31, 2024 and $47.0 million in revolver borrowings outstanding at December 31, 2023. In addition, payments of financing costs were $1.2 million higher in the three months ended March 31, 2025 compared to the same period in the prior year related to the debt refinancing that occurred on March 26, 2025. See Note 9 to the Unaudited Condensed Consolidated Financial Statements for additional information.

Current wording

Net cash provided financing activities increased $18.8 million for the six months ended June 30, 2025 as compared to the corresponding period in 2024. The increase in cash provided was related to having $42.0 million in revolver borrowings outstanding at June 30, 2025 and $0.0 million in revolver borrowings outstanding at December 31, 2024, compared to $63.0 million in revolver borrowings outstanding at June 30, 2024 and $47.0 million in revolver borrowings outstanding at December 31, 2023. This increase in cash provided was somewhat offset by there being $6.0 million in share repurchases in the six months ended June 30, 2025, with no repurchases in the corresponding period in the prior year.

Previous wording

Free cash flow for the three months ended March 31, 2025 was ($3.5) million compared to ($22.9) million in the corresponding period in 2024, an increase of $19.4 million. The increase in free cash flow for the three months ended March 31, 2025 is primarily a result of lower cash used in operating activities of $20.3 million as discussed above under “Liquidity and Capital Resources.”

Current wording

Free cash flow for the three months ended June 30, 2025 was ($14.3) million compared to $1.1 million in the corresponding period in 2024, a decrease of $15.4 million. Free cash flow for the six months ended June 30, 2025 was ($17.8) million compared to ($21.9) million in the corresponding period in 2024, an increase of $4.1 million. The increase in free cash flow for the six months ended June 30, 2025 is primarily a result of lower cash used in operating activities of $6.4 million as discussed above under “Liquidity and Capital Resources.”

Previous wording

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

Current wording

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

Previous wording

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

Current wording

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

Previous wording

Adjusted EBITDA represents net income (loss) before interest, taxes, depreciation and amortization, as further adjusted for certain charges consisting of unrelated legal and consulting fees, severance, restructuring charges, impairment charges, CEO transition costs, debt modification expense, loss on extinguishment of debt, and stock-based compensation. We use, and we believe our investors benefit from the presentation of, Adjusted EBITDA in evaluating our operating performance because it provides us and our investors with additional tools to compare our operating performance on a consistent basis by removing the impact of certain items that management believes do not directly reflect our core operations. In addition, we believe that Adjusted EBITDA is useful to investors and other external users of our consolidated financial statements in evaluating our operating performance as compared to that of other companies, because it allows them to measure a company’s operating performance without regard to items such as interest expense, taxes, depreciation and amortization, which can vary substantially from company to company depending upon accounting methods and book value of assets and liabilities, capital structure and the method by which assets were acquired. Our management also uses Adjusted EBITDA for planning purposes, including the preparation of our annual operating budget and financial projections. Management also uses Adjusted EBITDA to evaluate our ability to make certain payments, including dividends, in compliance with our senior credit facilities, which is determined based on a calculation of “Consolidated Adjusted EBITDA” that is substantially similar to Adjusted EBITDA.

Current wording

Adjusted EBITDA represents net income before interest, taxes, depreciation and amortization, as further adjusted for certain charges consisting of unrelated legal and consulting fees, severance, restructuring charges, write downs of property, plant and equipment, impairment charges, CEO transition costs, debt modification expense, loss on extinguishment of debt, and stock-based compensation. We use, and we believe our investors benefit from the presentation of, Adjusted EBITDA in evaluating our operating performance because it provides us and our investors with additional tools to compare our operating performance on a consistent basis by removing the impact of certain items that management believes do not directly reflect our core operations. In addition, we believe that Adjusted EBITDA is useful to investors and other external users of our consolidated financial statements in evaluating our operating performance as compared to that of other companies, because it allows them to measure a company’s operating performance without regard to items such as interest expense, taxes, depreciation and amortization, which can vary substantially from company to company depending upon accounting methods and book value of assets and liabilities, capital structure and the method by which assets were acquired. Our management also uses Adjusted EBITDA for planning purposes, including the preparation of our annual operating budget and financial projections. Management also uses Adjusted EBITDA to evaluate our ability to make certain payments, including dividends, in compliance with our senior credit facilities, which is determined based on a calculation of “Consolidated Adjusted EBITDA” that is substantially similar to Adjusted EBITDA.

Previous wording

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

Current wording

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

Previous wording

The following table presents a reconciliation of net income (loss), the most comparable GAAP financial measure, to Adjusted EBITDA as well as the resulting calculation of Adjusted EBITDA for the three months ended March 31, 2025 and 2024:

Current wording

The following table presents a reconciliation of net income, the most comparable GAAP financial measure, to Adjusted EBITDA as well as the resulting calculation of Adjusted EBITDA for the three and six months ended June 30, 2025 and 2024:

Previous wording

The following table presents Adjusted EBITDA by segment for the three months ended March 31, 2025 and 2024.

Current wording

The following table presents Adjusted EBITDA by segment for the three and six months ended June 30, 2025 and 2024.

Previous wording

Adjusted EBITDA at our Work Truck Attachments segment was $0.3 million for the three months ended March 31, 2025 compared to ($4.5) million in the three months ended March 31, 2024, an increase of $4.8 million. The change in the three months ended March 31, 2025 from the corresponding periods in 2024 was due to improved snowfall in our core markets leading to higher volumes in 2025. The most recent snow season ended March 2025 was 12% below the 10-year average, but was approximately 30% better than the prior snow season, which had snowfall 39.0% below the 10-year average.

Current wording

Adjusted EBITDA at our Work Truck Attachments segment was $31.6 million for the three months ended June 30, 2025 compared to $35.8 million in the three months ended June 30, 2024, a decrease of $4.2 million. Adjusted EBITDA at our Work Truck Attachments segment was $31.9 million for the six months ended June 30, 2025 compared to $31.3 million in the six months ended June 30, 2024, an increase of $0.6 million. The decrease in the three months ended June 30, 2025 is due to lower volumes related to the timing of preseason shipments between the second and third quarters. The increase in the six months ended June 30, 2025 from the corresponding period in 2024 was due to improved snowfall in our core markets leading to higher volumes in the first quarter of 2025. The most recent snow season ended March 2025 was 12% below the 10-year average, but was approximately 30% better than the prior snow season, which had snowfall 39.0% below the 10-year average.

Previous wording

Adjusted EBITDA at our Work Truck Solutions segment was $9.1 million for the three months ended March 31, 2025 compared to $6.0 million in the three months ended March 31, 2024, an increase of $3.1 million. The change in the three months ended March 31, 2025 was due to improved municipal volumes and price increase realization, as well as improved efficiencies.

Current wording

Adjusted EBITDA at our Work Truck Solutions segment was $11.0 million for the three months ended June 30, 2025 compared to $7.9 million in the three months ended June 30, 2024, an increase of $3.1 million. Adjusted EBITDA at our Work Truck Solutions segment was $20.2 million for the six months ended June 30, 2025 compared to $13.9 million in the six months ended June 30, 2024, an increase of $6.3 million. The change in the three and six months ended June 30, 2025 was due to price increase realization and improved municipal volumes, as well as improved efficiencies.

Previous wording

Adjusted Net Income (Loss) and Adjusted Earnings (Loss) Per Share (calculated on a diluted basis) represents net income (loss) and earnings (loss) per share (as defined by GAAP), excluding the impact of stock-based compensation, severance, restructuring charges, impairment charges, CEO transition costs, debt modification expense, loss on extinguishment of debt, certain charges related to unrelated legal fees and consulting fees, and adjustments on derivatives not classified as hedges, net of their income tax impact. Adjustments on derivatives not classified as hedges are non-cash and are related to overall financial market conditions; therefore, management believes such costs are unrelated to our business and are not representative of our results. Management believes that Adjusted Net Income (Loss) and Adjusted Earnings (Loss) Per Share are useful in assessing the Company’s financial performance by eliminating expenses and income that are not reflective of the underlying business performance. We believe that the presentation of adjusted net income (loss) for the periods presented allows investors to make meaningful comparisons of our operating performance between periods and to view our business from the same perspective as our management. Because the excluded items are not predictable or consistent, management does not consider them when evaluating our performance or when making decisions regarding allocation of resources.

Current wording

Adjusted Net Income and Adjusted Earnings Per Share (calculated on a diluted basis) represents net income and earnings per share (as defined by GAAP), excluding the impact of stock-based compensation, severance, restructuring charges, write downs of property, plant and equipment, impairment charges, CEO transition costs, debt modification expense, loss on extinguishment of debt, certain charges related to unrelated legal fees and consulting fees, and adjustments on derivatives not classified as hedges, net of their income tax impact. Adjustments on derivatives not classified as hedges are non-cash and are related to overall financial market conditions; therefore, management believes such costs are unrelated to our business and are not representative of our results. Management believes that Adjusted Net Income and Adjusted Earnings Per Share are useful in assessing the Company’s financial performance by eliminating expenses and income that are not reflective of the underlying business performance. We believe that the presentation of adjusted net income for the periods presented allows investors to make meaningful comparisons of our operating performance between periods and to view our business from the same perspective as our management. Because the excluded items are not predictable or consistent, management does not consider them when evaluating our performance or when making decisions regarding allocation of resources.

Previous wording

The following table presents a reconciliation of net income (loss), the most comparable GAAP financial measure, to Adjusted net income (loss) as well as a reconciliation of diluted earnings (loss) per share, the most comparable GAAP financial measure, to Adjusted diluted earnings (loss) per share for the three months ended March 31, 2025 and 2024:

Current wording

The following table presents a reconciliation of net income, the most comparable GAAP financial measure, to Adjusted net income as well as a reconciliation of diluted earnings per share, the most comparable GAAP financial measure, to Adjusted diluted earnings per share for the three and six months ended June 30, 2025 and 2024:

Previous wording

There have been no material changes to our future obligations and commitments in the three months ended March 31, 2025, other than those described below.

Current wording

There have been no material changes to our future obligations and commitments in the three months ended June 30, 2025.

Previous wording

Inflation in materials and labor had a material impact on our profitability in the three months ended March 31, 2025 and 2024 and, although we are starting to see such inflationary pressures ease, we expect ongoing inflationary pressures and the impact of any tariffs enacted may also impact our profitability in the remainder of 2025. While we anticipate being able to cover this inflation by raising prices, there may be a timing difference of when we incur the increased costs and when we realize the higher prices in our backlog. In prior year as a result of inflationary pressures due to tariffs, we experienced significant increases in steel costs, but were able to mitigate the effects of these increases through both temporary and permanent steel surcharges; we expect, but cannot be certain, that we will be able to do the same going forward.

Current wording

Inflation in materials and labor had a material impact on our profitability in the three and six months ended June 30, 2025 and 2024 and, although we are starting to see certain inflationary pressures ease, we expect the impact of any tariffs enacted and any ongoing inflationary pressures may also impact our profitability in the remainder of 2025. While we anticipate being able to cover this inflation by raising prices, there may be a timing difference of when we incur the increased costs and when we realize the higher prices in our backlog. In prior year as a result of inflationary pressures due to tariffs, we experienced significant increases in steel costs, but were able to mitigate the effects of these increases through both temporary and permanent steel surcharges; we expect, but cannot be certain, that we will be able to do the same going forward.