DOUGLAS DYNAMICS, INC

Previous wording

On February 20, 2026, the United States Supreme Court issued a decision invalidating the broad-based tariffs imposed under the International Emergency Economic Powers Act (IEEPA). Significant uncertainty exists regarding the timing and amount of any potential tariff refunds. We will continue to assess these developments as additional information becomes available.

Current wording

On February 20, 2026, the United States Supreme Court issued a decision invalidating the broad-based tariffs imposed under the International Emergency Economic Powers Act (IEEPA). We incurred tariffs under IEEPA, and are following the established refund filing and validation process through the CAPE system, along with other importers seeking IEEPA refunds. As of June 30, 2026, approximately $0.9 million in refunds have been received, and a receivable of approximately $2.8 million was recorded for additional tariffs that have been accepted through the CAPE system but have not yet been received in cash. The refunds were reflected as a reduction to Cost of sales in the Condensed Consolidated Statements of Operations and Comprehensive Income in the three and six months ended June 30, 2026 for amounts related to goods already sold, or as a reduction in Inventories on the Condensed Consolidated Balance Sheet as of June 30, 2026 to the extent the related goods remain on hand.

Previous wording

The following table sets forth, for the three months ended March 31, 2026 and 2025, 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, 2026 and 2025 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, 2026 and 2025, 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, 2026 and 2025 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, 2026 and 2025 the percentage of certain items in our Condensed Consolidated Statements of Operations and Comprehensive Income, relative to net sales: ​

Current wording

The following table sets forth for the three and six months ended June 30, 2026 and 2025 the percentage of certain items in our Condensed Consolidated Statements of Operations and Comprehensive Income, relative to net sales: ​

Previous wording

Net sales were $137.8 million for the three months ended March 31, 2026 compared to $115.1 million in the three months ended March 31, 2025, an increase of $22.7 million, or 19.7%. The increase in sales for the three months ended March 31, 2026 compared to the same period in 2025 is a result of higher volumes at Work Truck Attachments related to improved snowfall levels. See below for a discussion of net sales for each of our segments.

Current wording

Net sales were $214.6 million for the three months ended June 30, 2026 compared to $194.3 million in the three months ended June 30, 2025, an increase of $20.3 million, or 10.4%. Net sales were $352.4 million for the six months ended June 30, 2026 compared to $309.4 million in the six months ended June 30, 2025, an increase of $43.0 million, or 13.9%. The increase in sales for the three months ended June 30, 2026 compared to the same period in 2025 is a result of higher volumes at Work Truck Attachments related to improved snowfall levels. The increase in sales for the six months ended June 30, 2026 compared to the same period in 2025 is a result of higher volumes at Work Truck Attachments related to improved snowfall levels. See below for a discussion of net sales for each of our segments.

Previous wording

Net sales at our Work Truck Attachments segment were $60.9 million for the three months ended March 31, 2026 compared to $36.5 million in the three months ended March 31, 2025, an increase of $24.4 million. The increase in sales in the three months ended March 31, 2026 was due to higher equipment volumes and parts and accessories sales related to improved snowfall levels. The most recent snow season ended March 2026 was approximately 26.0% above the 10-year average, compared to the prior snow season which saw snowfall 12.0% below the 10-year average.

Current wording

Net sales at our Work Truck Attachments segment were $129.3 million for the three months ended June 30, 2026 compared to $108.1 million in the three months ended June 30, 2025, an increase of $21.2 million. Net sales at our Work Truck Attachments segment were $190.2 million for the six months ended June 30, 2026 compared to $144.6 million in the six months ended June 30, 2025, an increase of $45.6 million. The increase in sales in the three and six months ended June 30, 2026 was due to higher equipment volumes and parts and accessories sales related to improved snowfall levels, as well as the addition of sales from Venco Venturo, which was acquired on November 3, 2025. The most recent snow season ended March 2026 was approximately 26.0% above the 10-year average, compared to the prior snow season which saw snowfall 12.0% below the 10-year average.

Previous wording

​Net sales at our Work Truck Solutions segment were $76.9 million for the three months ended March 31, 2026 compared to $78.6 million in the three months ended March 31, 2025, a decrease of $1.7 million. The decrease in sales for the three months ended March 31, 2026 compared to the same period in 2025 was a result of lower commercial volumes and lower sales of Company-purchased chassis, somewhat offset by price increase realization.

Current wording

​Net sales at our Work Truck Solutions segment were $85.3 million for the three months ended June 30, 2026 compared to $86.2 million in the three months ended June 30, 2025, a decrease of $0.9 million. Net sales at our Work Truck Solutions segment were $162.2 million for the six months ended June 30, 2026 compared to $164.8 million in the six months ended June 30, 2025, a decrease of $2.6 million. The decrease in sales for the three and six months ended June 30, 2026 compared to the same periods in 2025 was a result of lower commercial volumes, somewhat offset by price increase realization.

Previous wording

Cost of sales was $100.0 million for the three months ended March 31, 2026 compared to $86.9 million for the three months ended March 31, 2025, an increase of $13.1 million or 15.1%. The increase in cost of sales for the three months ended March 31, 2026 compared to the same period in the prior year was driven by the higher volumes at our Work Truck Attachments segment. Cost of sales as a percentage of sales were 72.6% for the three months ended March 31, 2026, compared to 75.5% for the three months ended March 31, 2025, respectively. The decrease in cost of sales as a percentage of sales in the three months ended March 31, 2026 is related to segment mix, as Work Truck Attachments typically has higher gross margins than Work Truck Solutions.

Current wording

Cost of sales was $147.9 million for the three months ended June 30, 2026 compared to $134.0 million for the three months ended June 30, 2025, an increase of $13.9 million or 10.4%. Cost of sales was $247.9 million for the six months ended June 30, 2026 compared to $221.0 million for the six months ended June 30, 2025, an increase of $26.9 million or 12.2%. The increase in cost of sales for the three and six months ended June 30, 2026 compared to the same periods in the prior year was driven by the higher volumes at our Work Truck Attachments segment. Cost of sales as a percentage of sales were 68.9% for the three months ended June 30, 2026, compared to 69.0% for the three months ended June 30, 2025, respectively. Cost of sales as a percentage of sales were 70.3% for the six months ended June 30, 2026, compared to 71.4% for the six months ended June 30, 2025, respectively. The decrease in cost of sales as a percentage of sales in the three and six months ended June 30, 2026 is related to segment mix, as Work Truck Attachments typically has higher gross margins than Work Truck Solutions.

Previous wording

Gross profit was $37.8 million for the three months ended March 31, 2026 compared to $28.1 million for the three months ended March 31, 2025, an increase of $9.7 million, or 34.5%. 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 24.5% for the three months ended March 31, 2025 to 27.4% for the corresponding period in 2026. 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.”

Current wording

Gross profit was $66.8 million for the three months ended June 30, 2026 compared to $60.3 million for the three months ended June 30, 2025, an increase of $6.5 million, or 10.8%. Gross profit was $104.6 million for the six months ended June 30, 2026 compared to $88.4 million for the six months ended June 30, 2025, an increase of $16.2 million, or 18.3%. 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 31.0% for the three months ended June 30, 2025 to 31.1% for the corresponding period in 2026. As a percentage of net sales, gross profit increased from 28.6% for the six months ended June 30, 2025 to 29.7% for the corresponding period in 2026. 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 $27.9 million for the three months ended March 31, 2026 compared to $24.9 million for the three months ended March 31, 2025, an increase of $3.0 million, or 12.0%. The increase in the three months ended March 31, 2026 is related to higher incentive and stock-based compensation expense of $1.0 million, higher wages and salaries of $0.7 million related to increased headcount including the acquisition of Venco Venturo in November 2025, as well as increased rent costs and other discretionary spending.

Current wording

Selling, general and administrative expenses, including intangibles amortization, were $31.3 million for the three months ended June 30, 2026 compared to $23.3 million for the three months ended June 30, 2025, an increase of $8.0 million, or 34.3%. Selling, general and administrative expenses, including intangibles amortization, were $59.2 million for the six months ended June 30, 2026 compared to $48.2 million for the six months ended June 30, 2025, an increase of $11.0 million, or 22.8%. The increase in the three months ended June 30, 2026 is related to higher incentive and stock-based compensation expense of $5.0 million, higher wages and salaries of $0.7 million related to increased headcount including the acquisition of Venco Venturo in November 2025, as well as increased rent costs and other discretionary spending. The increase in the six months ended June 30, 2026 is related to higher incentive and stock-based compensation expense of $6.0 million, higher wages and salaries of $1.3 million related to increased headcount including the acquisition of Venco Venturo in November 2025, as well as increased rent costs and other discretionary spending.

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 $2.1 million for the three months ended March 31, 2026, a decrease compared to the $2.4 million incurred in the same period in the prior year. The decrease in interest expense for the three months ended March 31, 2026 was due to lower interest on our term loan of $0.2 million and lower interest on our revolver of $0.1 million related to lower interest rates.

Current wording

Interest expense was $2.3 million for the three months ended June 30, 2026, a decrease compared to the $3.0 million incurred in the same period in the prior year. Interest expense was $4.4 million for the six months ended June 30, 2026, a decrease compared to the $5.4 million incurred in the same period in the prior year. The decrease in interest expense for the three months ended June 30, 2026 was due to lower interest on our floor plan agreements. The decrease in interest expense for the six months ended June 30, 2026 was due to lower interest on our floor plan agreements of $0.6 million, as well as lower interest on our term loan of $0.3 million related to lower interest rates.

Previous wording

The Company’s effective tax rate was 19.2% and 69.8% for the three months ended March 31, 2026 and 2025, respectively. The effective tax rate for the three months ended March 31, 2026 was impacted by a discrete tax benefit of $0.5 million related to tax from stock compensation. 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.

Current wording

The Company’s effective tax rate was 24.7% and 24.0% for the three months ended June 30, 2026 and 2025, respectively. The Company’s effective tax rate was 23.7% and 24.6% for the six months ended June 30, 2026 and 2025, respectively. The effective tax rate for the three months ended June 30, 2026 was generally in line with the prior year. The effective tax rate for the six months ended June 30, 2026 was impacted by having a discrete tax benefit related to tax from stock compensation of $0.5 million, compared to discrete tax expense of $0.1 million in the prior year.

Previous wording

Net income for the three months ended March 31, 2026 was $6.4 million, compared to $0.1 million for the corresponding period in 2025, an increase of $6.3 million. The change in net income for the three months ended March 31, 2026 was driven by the factors described above under “— Net Sales,” “— Cost of Sales,” “— Selling, General and Administrative Expense,” “— Debt Modification Expense,” “— Loss on Extinguishment of Debt,” “—Interest Expense," and “— Income Taxes.” As a percentage of net sales, net income was 4.6% for the three months ended March 31, 2026 compared to 0.1% for the three months ended March 31, 2025.

Current wording

Net income for the three months ended June 30, 2026 was $25.4 million, compared to $26.0 million for the corresponding period in 2025, a decrease of $0.6 million. Net income for the six months ended June 30, 2026 was $31.8 million, compared to $26.1 million for the corresponding period in 2025, an increase of $5.7 million. The change in net income for the three and six months ended June 30, 2026 was driven by the factors described above under “— Net Sales,” “— Cost of Sales,” “— Selling, General and Administrative Expense,” “— Debt Modification Expense,” “— Loss on Extinguishment of Debt,” “— Interest Expense," and “— Income Taxes.” As a percentage of net sales, net income was 11.9% for the three months ended June 30, 2026 compared to 13.4% for the three months ended June 30, 2025. As a percentage of net sales, net income was 9.0% for the six months ended June 30, 2026 compared to 8.4% for the six months ended June 30, 2025.

Previous wording

Our primary uses of cash are to provide working capital, meet debt service requirements, finance capital expenditures, pay dividends under our dividend policy, repurchase shares of our common stock, and support our growth, including through potential acquisitions, and for other general corporate purposes. For a description of the seasonality of our working capital rates see “—Seasonality and Year-To-Year Variability.”

Current wording

Our primary uses of cash are to provide working capital, meet debt service requirements, finance capital expenditures, pay dividends under our dividend policy, repurchase shares of our common stock, and support our growth, including through potential acquisitions, and for other general corporate purposes. For a description of the seasonality of our working capital needs see “—Seasonality and Year-To-Year Variability.”

Previous wording

Our Board of Directors has adopted a dividend policy that reflects an intention to distribute to our stockholders a regular quarterly cash dividend. The declaration and payment of these dividends to holders of our common stock is at the discretion of our Board of Directors and depends upon many factors, including our financial condition and earnings, legal requirements, taxes and other factors our Board of Directors may deem to be relevant. The terms of our indebtedness may also restrict us from paying cash dividends on our common stock under certain circumstances. As a result of this dividend policy, we may not have significant cash available to meet any large unanticipated liquidity requirements. As a result, we may not retain a sufficient amount of cash to fund our operations or to finance unanticipated capital expenditures or growth opportunities, including acquisitions. Our Board of Directors may, however, amend, revoke or suspend our dividend policy at any time and for any reason.

Current wording

Our Board of Directors has adopted a dividend policy that reflects an intention to distribute to our shareholders a regular quarterly cash dividend. The declaration and payment of these dividends to holders of our common stock is at the discretion of our Board of Directors and depends upon many factors, including our financial condition and earnings, legal requirements, taxes and other factors our Board of Directors may deem to be relevant. The terms of our indebtedness may also restrict us from paying cash dividends on our common stock under certain circumstances. As a result of this dividend policy, we may not have significant cash available to meet any large unanticipated liquidity requirements. As a result, we may not retain a sufficient amount of cash to fund our operations or to finance unanticipated capital expenditures or growth opportunities, including acquisitions. Our Board of Directors may, however, amend, revoke or suspend our dividend policy at any time and for any reason.

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. We repurchased approximately $3.0 million in shares during the three months ended March 31, 2026.

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 $3.0 million in shares during the three months ended June 30, 2026. We repurchased approximately $6.0 million in shares during the six months ended June 30, 2026.

Previous wording

As of March 31, 2026, we had $109.7 million of total liquidity, comprised of $5.2 million in cash and cash equivalents and $104.5 million of borrowing availability under our revolving credit facility, compared with total liquidity as of December 31, 2025 of approximately $127.8 million, comprised of approximately $8.3 million in cash and cash equivalents and borrowing availability of approximately $119.5 million under our revolving credit facility. The change in our total liquidity from December 31, 2025 is primarily due to the seasonality of our business. We have taken various steps to preserve liquidity, including reducing discretionary spending where appropriate 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, 2026, we had $69.4 million of total liquidity, comprised of $1.9 million in cash and cash equivalents and $67.5 million of borrowing availability under our revolving credit facility, compared with total liquidity as of December 31, 2025 of approximately $127.8 million, comprised of approximately $8.3 million in cash and cash equivalents and borrowing availability of approximately $119.5 million under our revolving credit facility. The change in our total liquidity from December 31, 2025 is primarily due to the seasonality of our business. We have taken various steps to preserve liquidity, including reducing discretionary spending where appropriate 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 $5.2 million at March 31, 2026 compared to cash and cash equivalents of $8.3 million and $7.2 million at December 31, 2025 and March 31, 2025, 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 $1.9 million at June 30, 2026 compared to cash and cash equivalents of $8.3 million and $8.0 million at December 31, 2025 and June 30, 2025, 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 $0.3 million from the three months ended March 31, 2025 to the three months ended March 31, 2026. The decrease in cash used in operating activities was due to a $6.9 million increase in net income adjusted for reconciling items, somewhat offset by unfavorable changes in working capital and operating assets and liabilities of $6.5 million. The largest unfavorable changes in working capital and operating assets and liabilities was an increase in cash used in accounts payable related to the timing of supplier payments, somewhat offset by higher cash provided by accounts receivable related to the timing of collections.

Current wording

Net cash used in operating activities increased $12.5 million from the six months ended June 30, 2025 to the six months ended June 30, 2026. The increase in cash used in operating activities was due to unfavorable changes in working capital and operating assets and liabilities of $23.6 million, somewhat offset by a $11.2 million increase in net income adjusted for reconciling items. The largest unfavorable changes in working capital and operating assets and liabilities was an increase in cash used in inventory due to increased demand and the timing of shipments, accounts payable related to the timing of supplier payments, and accounts receivable related to the timing of collections.

Previous wording

Net cash used in investing activities increased $1.9 million for the three months ended March 31, 2026 compared to the corresponding period in 2025 due to a higher level of capital expenditures, as well as the payment of the final working capital adjustment related to the Venco Venturo acquisition.

Current wording

Net cash used in investing activities increased $3.1 million for the six months ended June 30, 2026 compared to the corresponding period in 2025 due to a higher level of capital expenditures, as well as the payment of the final working capital adjustment related to the Venco Venturo acquisition.

Previous wording

Net cash provided by financing activities decreased $3.6 million for the three months ended March 31, 2026 as compared to the corresponding period in 2025. The decrease in cash provided was related to there being $3.0 million in share repurchases in the three months ended March 31, 2026, with no repurchases in the corresponding period in the prior year, as well as net borrowings in the prior year related to the debt refinancing that occurred on March 26, 2025. This decrease in cash provided was somewhat offset by having higher net revolver borrowings in the three months ended March 31, 2026 compared to the prior year.

Current wording

Net cash provided by financing activities increased $6.3 million for the six months ended June 30, 2026 as compared to the corresponding period in 2025. This increase in cash provided was due to having higher net revolver borrowings in the six months ended June 30, 2026 compared to the prior year. The increase in cash provided was also related to there being net borrowings in the prior year related to the debt refinancing that occurred on March 26, 2025.

Previous wording

Free cash flow for the three months ended March 31, 2026 was ($4.2) million compared to ($3.5) million in the corresponding period in 2025, a decrease of $0.7 million. The decrease in free cash flow for the three months ended March 31, 2026 is primarily a result of lower cash used in operating activities of $0.3 million as discussed above under “Liquidity and Capital Resources.”

Current wording

Free cash flow for the three months ended June 30, 2026 was ($28.3) million compared to ($14.3) million in the corresponding period in 2025, a decrease of $14.0 million. Free cash flow for the six months ended June 30, 2026 was ($32.5) million compared to ($17.8) million in the corresponding period in 2025, a decrease of $14.7 million. The decrease in free cash flow for the six months ended June 30, 2026 is primarily a result of higher cash used in operating activities of $12.5 million as discussed above under “Liquidity and Capital Resources.”

Previous 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 months ended March 31, 2026 and 2025:

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, 2026 and 2025:

Previous wording

The following table presents Adjusted EBITDA by segment for the three months ended March 31, 2026 and 2025.

Current wording

The following table presents Adjusted EBITDA by segment for the three and six months ended June 30, 2026 and 2025.

Previous wording

Adjusted EBITDA at our Work Truck Attachments segment was $7.7 million for the three months ended March 31, 2026 compared to $0.3 million in the three months ended March 31, 2025, an increase of $7.4 million. The change in the three months ended March 31, 2026 was due to higher equipment volumes and parts and accessories sales related to improved snowfall levels. The most recent snow season ended March 2026 was approximately 26.0% above the 10-year average, compared to the prior snow season which saw snowfall 12.0% below the 10-year average.

Current wording

Adjusted EBITDA at our Work Truck Attachments segment was $35.8 million for the three months ended June 30, 2026 compared to $31.6 million in the three months ended June 30, 2025, an increase of $4.2 million. Adjusted EBITDA at our Work Truck Attachments segment was $43.5 million for the six months ended June 30, 2026 compared to $31.9 million in the six months ended June 30, 2025, an increase of $11.6 million. The change in the three and six months ended June 30, 2026 was due to higher equipment volumes and parts and accessories sales related to improved snowfall levels. The most recent snow season ended March 2026 was approximately 26.0% above the 10-year average, compared to the prior snow season which saw snowfall 12.0% 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, 2026 compared to $9.1 million in the three months ended March 31, 2025. The change in the three months ended March 31, 2026 was due to price increase realization and improved efficiencies, mostly offset by lower commercial volumes and lower sales of Company-purchased chassis.

Current wording

Adjusted EBITDA at our Work Truck Solutions segment was $8.8 million for the three months ended June 30, 2026 compared to $11.0 million in the three months ended June 30, 2025, a decrease of $2.2 million. Adjusted EBITDA at our Work Truck Solutions segment was $17.9 million for the six months ended June 30, 2026 compared to $20.2 million in the six months ended June 30, 2025, a decrease of $2.3 million. The change in the three and six months ended June 30, 2026 was due to lower commercial volumes, somewhat offset by price increase realization.

Previous wording

Adjusted Net Income and Adjusted Earnings Per Share (calculated on a diluted basis) represents net income and earnings (loss) per share (as defined by GAAP), excluding the impact of stock-based compensation, severance, restructuring expenses, debt modification expense, loss on extinguishment of debt, acquisition-related expenses, amortization of inventory step-up related to the Venco Venturo acquisition, and certain charges related to unrelated legal fees and consulting fees. 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.

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 expenses, debt modification expense, loss on extinguishment of debt, acquisition-related expenses, amortization of inventory step-up related to the Venco Venturo acquisition, and certain charges related to unrelated legal fees and consulting fees. 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, 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 months ended March 31, 2026 and 2025:

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, 2026 and 2025:

Previous wording

Inflation in materials, freight and labor, including as a result of tariffs and the war in Iran, had a material impact on our profitability in the three months ended March 31, 2026 and 2025 and we expect the impact of any tariffs enacted and any ongoing inflationary pressures may also impact our profitability in the remainder of 2026. 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 years 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, freight and labor, including as a result of tariffs and the war in Iran, had a material impact on our profitability in the three and six months ended June 30, 2026 and 2025 and we expect the impact of any tariffs enacted and any ongoing inflationary pressures may also impact our profitability in the remainder of 2026. 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 years 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.