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 the Company's2025 Form10-K (Commission FileNo. 001-34728) filed with the Securities and Exchange Commission on* February 24, 2026.*

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The Company conducts business intwo segments: Work Truck Attachments and Work Truck Solutions. See Note15 to the Unaudited Condensed Consolidated Financial Statements for a description of and financial information regarding these segments.

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​Interim Condensed Consolidated Financial Information

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The accompanying Condensed Consolidated Balance Sheets as of* March 31, 2026*, the Condensed Consolidated Statements of Operations and Comprehensive Income and the Condensed Consolidated Statements of Shareholders’ Equity for thethree months ended* March 31, 2026and2025*, and the Condensed Consolidated Statements of Cash Flows for thethree months ended* March 31, 2026and2025*, have been prepared by the Company and havenot been audited.

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 be entitled to 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 most cases. In the case of a single order containing multiple upfits, the transaction price* may*represent multiple performance obligations.

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:

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Revenue by timing of revenue recognition was as follows:

Contract Balances

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The following table shows the changes in the Company’s contract liabilities during thethree months ended* March 31, 2026and2025*, 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 obligationsnot yet invoiced. There wereno contract assets as of* March 31, 2026* or2025. Contract liabilities include payments received in advance of performance under the contract, variable freight allowances which are refunded to the customer, and rebates paid to distributors under the Company's municipal rebate program, and are realized with the associated revenue recognized under the contract. Contract liabilities related to payments received in advance of performance under the contract are included in Accounts Payable on the Condensed Consolidated Balance Sheets.

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The Company recognized revenue of $645 and $581 during thethree months ended* March 31, 2026and2025*, 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 thethree months ended* March 31, 2026and2025*:

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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 a Level2 input. The Company had outstanding loans of $305 and $427 against these Non-qualified benefit plan assets as of* March 31, 2026* and* December 31, 2025*, 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 $439 and $491 at* March 31, 2026* are included in Prepaid and other current assets and Other long-term assets, respectively. Interest rate swaps of $461 and $237 at* December 31, 2025* are included in Prepaid and other current assets and Other long-term assets, respectively.

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(c) Valuation models are calibrated to initial trade price. Subsequent valuations are based on observable inputs to the valuation model (e.g., market prices). Model inputs are changed only when corroborated by market data. Thus, inputs used to determine fair value of the interest rate swap are Level2 inputs. Steel hedging instruments of $0 and $50 at* March 31, 2026* and* December 31, 2025*, respectively, were included in Prepaid and other current assets on the Condensed Consolidated Balance Sheets.

(d) The fair value of the Company’s long-term debt, including current maturities, approximates its carrying value and is considered a Level2 input. 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* March 31, 2026* and* December 31, 2025*, the Company had $4,239 and $4,184, respectively, of floor plan chassis inventory and $4,239 and $4,184 of related floor plan financing obligation, respectively. Under the floor plan financing agreement, the Company recognizes revenue associated with upfitting and service installations net of the truck chassis in instances where the Company doesnot purchase the chassis.

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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 14 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 the term loan facility under its secured 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.

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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:

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 $1,517 and $1,550 for thethree months ended* March 31, 2026and2025*, respectively. Estimated amortization expense for the remainder of2026 and each of the succeedingfive years is as follows:

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Long-term debt is summarized below:

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On* March 26, 2025,the Company entered into an Amended and Restated Credit Agreement (the "Credit Agreement"), which amended and restated the Credit Agreement dated June 9, 2021 (as amended by AmendmentNo.* 1, dated as of* January 5, 2023,AmendmentNo.* 2, dated as of* July 11, 2023,and AmendmentNo.* 3, dated as of* January 29, 2024,the “Original Credit Agreement"). The Credit Agreement provides for a senior secured term loan to the Term Loan Borrower in the amount of $150,000 and a senior secured revolving credit facility available to the Revolving Loan Borrowers in the amount of $125,000, of which $10,000 will be available in the form of letters of credit and $15,000 will be available for the issuance of short-term swingline loans. The Credit Agreement also allows the Borrowers to request increases to the revolving commitments and/or incremental term loans in an aggregate amountnot* in excess of $175,000, subject to specified terms and conditions. The final maturity date of the Credit Agreement is* March 26, 2030.The Company applied the proceeds of the senior secured term loan facility under the Credit Agreement to refinance its existing senior secured term loan and revolving credit facilities under the Original Credit Agreement and for the payment of transaction consideration and expenses in connection with the Credit Agreement. 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 the Company's 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 2.000%, depending on the Company's Leverage Ratio. The Credit Agreement provides that the Company has 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) a margin ranging from 1.375% to 2.000%, depending on the Company's s Leverage Ratio, or (ii) a margin ranging from 0.375% to 1.000% per annum, depending on the Company'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 period plus 1%. If the 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. The Credit Agreement permits 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. The Company had outstanding loans of $305 and $427 against its corporate-owned life insurance policies as of* March 31, 2026* and* December 31, 2025*, respectively, included in Other long-term liabilities on the Condensed Consolidated Balance Sheets.

The Credit Agreement was issued at a $312 discount which is being amortized over the term of the term loan. Additionally, deferred financing costs of $863 and revolver upfront fees of $260 are being amortized over the term of the loan. A portion of the Company’s entrance into the Credit Agreement and subsequent settlement of its prior credit agreements is accounted for as an extinguishment of the Company’s prior debt, which resulted in the write off of unamortized capitalized deferred financing costs of $131 as well as the write off of unamortized debt discount of $25, resulting in a loss on extinguishment of debt of $156 in the Condensed Consolidated Statement Operations and Comprehensive Income for thethree months ended* March 31, 2025*. A portion of the Company’s entrance into the Credit Agreement and subsequent settlement of its prior credit agreements is accounted for as a modification of the Company’s prior debt. The Company recorded debt modification expense of $176 related tothird party fees in the Condensed Consolidated Statement Operations and Comprehensive Income for thethree months ended* March 31, 2025*.

At* March 31, 2026*, the Company had outstanding borrowings under its term loan of $142,164, $20,000 in outstanding borrowings on its revolving credit facility, and remaining borrowing availability of $104,450. At* December 31, 2025*, the Company had outstanding borrowings under its term loan of $144,018, $5,000 in outstanding borrowings on its revolving credit facility, and remaining borrowing availability of $119,450.

The Credit Agreement includes customary representations, warranties and negative and affirmative covenants, as well as customary events of default and certain cross default provisions that could result in acceleration of the Credit Agreement. In addition, the Credit Agreement requires the Company to have a Leverage Ratio ofnot more than 3.50 to1.00 as of the last day of any fiscal quarter, which commenced with the fiscal quarter ended* March 31, 2025.As of March 31, 2026*, the Company was in compliance with the respective covenants under the Credit Agreement.

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On* May 19, 2022,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 $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.

On* November 21, 2025,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 $75,000 effective for the period June 9, 2026through June 30, 2030.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 3.30% 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* March 31, 2026* was $930, of which $439 and $491 are included in Prepaid and other current assets and Other long-term assets on the Condensed Consolidated Balance Sheets, respectively. The interest rate swaps' positive fair value at* December 31, 2025* was $698, of which $461 and $237 are included in Prepaid and other current assets and Other long-term assets on the Condensed Consolidated Balance Sheets, respectively.

On* December 17, 2024,the Company entered into a steel hedging agreement to reduce its exposure to commodity price swings. The steel hedging instrument had a notional quantity of 3,000 short tons and was effective for the period August 1, 2025through December 31, 2025,which the Company believes was slightly less than half of its exposure during the effective period. Under the steel hedge agreement, the Company made fixed payments of $819 per short ton for the Steel Hot Rolled Coil (HRC) commodity. The steel hedging instrument is accounted for as a cash flow hedge. The steel hedging instrument's fair value at March 31, 2026* and* December 31, 2025* was $0 and $50, respectively, which was included in Prepaid and other current assets on the Condensed Consolidated Balance Sheets.

On* January 20, 2025,the Company entered into a floor plan line of credit for up to $20,000 with a financial institution that expired on January 31, 2026.*Under the floor plan agreement, the Company receives truck chassis and title for upfitting service installations. Upon upfit completion, the title transfers from the Company to the customer. The note bears interest at prime, less 0.50%.

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Accrued expenses and other current liabilities are summarized as follows:

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The warranty reserve was $5,073 at* March 31, 2026*, of which $1,779 is included in Other long-term liabilities and $3,294 is included in Accrued expenses and other current liabilities in the accompanying Condensed Consolidated Balance Sheets. The warranty reserve was $5,916 at* December 31, 2025*, of which $2,273 is included in Other long-term liabilities and $3,643 is included in Accrued expenses and other current liabilities in the accompanying Condensed Consolidated Balance Sheets.

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

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The amounts used in computing earnings per share and the weighted average common shares outstanding are as follows:

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Equity compensation awards* maybe granted to certain eligible employees or non-employee directors. A detailed description of the Company's employee stock plans is included in the Company's2025* Annual Report on Form10-K.

The Company incurred $266 and $158 in thethree months ended* March 31, 2026and2025*, respectively, in additional expense for employees who meet the thresholds of the stock plan's retirement provision.

The Company recognized $1,385 and $561 of compensation expense related to performance share unit awards in thethree months ended* March 31, 2026and2025*, respectively. The unrecognized compensation expense calculated under the fair value method for performance share units that were, as of* March 31, 2026*, expected to be earned through the requisite service period was approximately $4,450 and is expected to be recognized through2029. For each tranche of the2024 through2026 grants, a Monte Carlo simulation has been used to account for the Total Shareholder Return ("TSR") market condition in the grant date fair value of the award. For thefirst tranche of the2026 performance share grants, the fair value was $47.43 or $53.78 per share, depending on the grant date. For thesecond tranche of the2025 performance share grants, the fair value was $50.45 per share. For thethird tranche of the2024 performance share grants, the fair value was $44.20 per share.

A summary of restricted stock unit activity for thethree months ended* March 31, 2026* is as follows:

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The Company recognized $1,152 and $1,589 of compensation expense related to the restricted stock unit awards in thethree months ended* March 31, 2026and2025*, respectively. The unrecognized compensation expense calculated under the fair value method for restricted shares that were, as of* March 31, 2026*, expected to be earned through the requisite service period was approximately $7,737 and is expected to be recognized through2029.

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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 operates throughtwo operating segments for which separate financial information is available, and for which operating results are evaluated regularly by the Company's chief operating decision maker in determining resource allocation and assessing performance.

The Company’s chief operating decision maker is its Chief Executive Officer. The chief operating decision maker assesses performance for the Work Truck Attachments and Work Truck Solutions segments and decides how to allocate resources based on Adjusted EBITDA. The chief operating decision maker uses Adjusted EBITDA to evaluate profit generated by the segments in deciding where to reinvest profits, whether it be within the segments or for other purposes such as paying dividends, repurchasing stock, or other general corporate uses. The chief operating decision maker also uses segment Adjusted EBITDA as a metric in benchmarking performance against competitors, as well as in evaluating the compensation of certain employees.

The Company’stwo reportable business segments are as follows:

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Work Truck Attachments. The Work Truck Attachments segment includes the Company's operations that manufacture and sell snow and ice control attachments and other products sold under the FISHER®, WESTERN® and SNOWEX® brands, and truck-mounted service cranes and dump hoists under the VENCO® and VENTURO® brands.

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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Segment performance is evaluated based on segment net sales and Adjusted EBITDA. Separate financial information is available for thetwo operating segments. In addition, segment results include an allocation of all corporate costs to Work Truck Attachments and Work Truck Solutions.No single customer’s revenues amounted to10% or more of the Company’s total revenue. Sales are primarily within the United States and substantially all assets are located within the United States.

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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 19.2% and 69.8% for thethree months ended* March 31, 2026and2025*, respectively. The effective tax rate for thethree months ended* March 31, 2026was impacted by a discrete tax benefit of $486 related to tax from stock compensation. The effective tax rate for thethree* months ended* March 31, 2025*was impacted by discrete tax expense of $167 related to excess tax from stock compensation, and due to the low pre-tax income in the period, the rate was more significantly affected.

On* July 4, 2025,*a budget reconciliation bill, also known as the One Big Beautiful Bill Act ("OBBBA"), was signed into law. OBBBA amends U.S. tax law including provisions that impact the Company related to bonus depreciation, research and development and foreign derived intangible income.

​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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On* November**3,* 2025, the Company acquired substantially all of the assets of Venco Venturo Industries LLC and Venturo Truck Equipment Center LLC (together, "Venco Venturo"), a manufacturer of cranes, hoists and crane service bodies, for the purpose of expanding the Company's product line in its Work Truck Attachments segment. Total consideration paid was $27,254, including an initial working capital adjustment of $327, which was financed with cash on hand and revolver borrowings under the Company’s credit facility. The working capital adjustment was further adjusted to increase the purchase price by $927 which the Company paid in thethree months ended* March 31, 2026*. The Company incurred approximately $105 in transaction expenses related to this acquisition in thethree months ended* March 31, 2026*.

The following table summarizes the preliminary allocation of the purchase price paid or payable, and the subsequent working capital adjustment to the fair value of the net assets acquired as of the acquisition date:

The goodwill for the acquisition is a result of acquiring and retaining the existing workforces and expected synergies from integrating the operations into the Company, all of which has been allocated to the Work Truck Attachments reportable segment. The Company expects to be able to deduct amortization of goodwill for income tax purposes over afifteen-year period starting at the date of acquisition. The acquired intangible assets include customer relationships of $6,550 being amortized over fifteen years, noncompetition agreements of $300 being amortized over three years, backlog of $100 being amortized overone year, and tradenames of $1,950, which is indefinite-lived.

The acquisition was accounted for under the purchase method, and accordingly, the results of operations are included in the Company's financial statements from the date of acquisition. Pro forma information isnot presented as the impact isnot material.

In* November 2024,the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU")2024-03, "Disaggregation of Income Statement Expenses," which requires disaggregated disclosure of income statement expenses into specified categories in disclosures within the footnotes to the financial statements. The standard is effective for annual periods beginning after December 15, 2026.*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 thethree months ended* March 31, 2026* are as follows:

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Changes to accumulated other comprehensive income by component for thethree months ended* March 31, 2025*, are as follows:​

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On* February 16, 2022,the Company's Board of Directors authorized the purchase of up to $50,000 in shares of common stock at market value (the“2022* repurchase plan”). This authorization doesnot have an expiration date. Repurchases under the program* maybe 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. The Company mayalso, from time to time, enter into Rule10b5*-1 trading plans to facilitate repurchases of its shares under this authorization. This program doesnot obligate the Company to acquire any particular amount of shares and the program* maybe extended, modified, suspended or discontinued at any time at the Company’s discretion. Shares repurchased under the2022* repurchase plan are retired. The Company repurchased approximately $3,000 in shares during thethree months ended* March 31, 2026*. As of* March 31, 2026*, the Company had $35,000 remaining under authorization to purchase.