Good day, thank you for standing by. Welcome to the Douglas Dynamics first quarter 2022 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during this session, you will need to press star one on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star zero. I would now like to hand the conference over to Sarah Lauber, Chief Financial Officer. Please go ahead. Thank you. Welcome, everyone, and thank you for joining us on today's call. Before we begin, I'd like to remind you that some of the comments that will be made during this conference call, including answers to your questions, will constitute forward-looking statements. These forward-looking statements are subject to risks that could cause actual results to be materially different. Those risks include, among others, matters that we have described in yesterday's press release and in our filings with the SEC. Joining me on the call today is Bob McCormick, our President and Chief Executive Officer. In a moment, Bob will provide an overview of our performance. Then I'll review our financial results and guidance. After that, we'll open the call for your questions. With that, I'll hand the call to Bob. Thanks, Sarah. Good morning, everyone. Our first quarter performance met expectations as we continue to navigate through the same challenges we've been facing in recent quarters. While external conditions aren't improving yet, we haven't seen any new curveballs recently. Net sales were essentially flat compared to the record results for the same period last year, with higher pricing at both segments offset by lower volumes. We had a return to a more typical first quarter in attachments versus the tremendously profitable first quarter we delivered last year, driven by concentrated snowfall in February 2021. We did not expect to repeat this snowfall-driven performance. We've experienced lower production volumes in the solutions segment this quarter, stemming from chassis and component shortages, which hadn't yet started to impact us in first quarter 2021. Pandemic-related absenteeism ebbs and flows, generally in line with the country and local markets. Omicron had an impact in the first quarter, but we have learned to manage through such surges well. Very proud of our team for maintaining their focus on pandemic safety for more than two years now. We continue to demonstrate flexibility and creativity as we strive to deliver for our customers every day. We're very pleased with the demand outlook in both segments, setting us up for long-term success. Our headwinds remain the same and don't seem to be getting any worse. First, supply chain disruption and component shortages. We expect the situation to stabilize in the coming months and slowly start to improve later this year. We've been monitoring the latest pandemic disruptions in China carefully. The majority of our supply partners are in provinces outside of those facing lockdowns, so we're not overly concerned at this point. Second, material price inflation remains a factor. We are now recapturing price in attachments as promised and still have work to do in solutions, which is a much more complex situation. Lastly, we continue to navigate a tight labor market. We're seeing the benefits of ideas and programs put in place last year, and kudos to our HR team for finding creative ways to address the issues every employer is facing. While uncertainty still exists, it's now somewhat expected given the past few years. We've always been better than most at adapting. The constant need to pivot, adjust, and find solutions rapidly is just how we're built. We are comfortable maintaining our guidance, which Sarah will discuss later. Now, let's discuss the latest developments at each of our segments. Beginning with Work Truck Attachments, where we generated $45.8 million of net sales and $3 million of adjusted EBITDA. First quarter 2022 volumes met our expectations despite slightly below average snowfall. Net sales increased 9% due to higher pricing on higher input costs, which offset lower volumes when compared to the robust first quarter of 2021. Profitability was impacted by lower volumes and product mix, as well as a return to more normal spending levels, particularly the in-person NTEA Work Truck Week in March. Our preseason is off to a strong start, seeing significant interest in our non-truck products. Dealer inventories are in good shape and dealer sentiment is positive. We're pleased with the continued execution and outlook for the attachments group. That brings us to Work Truck Solutions, where we experienced a continuation of recent trends. We delivered $56.8 million of net sales and $1.6 million of adjusted EBITDA. Performance was down compared to last year and continues to be impacted by a restricted flow of chassis and other supply chain constraints. Supply and chassis headwinds are more robust now than first quarter 2021. Looking ahead, demand remains strong, as does our backlog. When supply chain disruptions start to subside, we are well- positioned to meet customer expectations, driving revenue and earnings growth. Our teams work tirelessly to alleviate the issues wherever possible, and we continue to expect the situation to slowly start to improve in the second half of 2022. Overall, we are encouraged with where both segments stand today. In conclusion, Q1 results were in line with expectations. Attachments preseason is off to a strong start. In our Solutions group, demand and backlog remain strong. We continue to believe supply chain difficulties will gradually improve in the second half of the year, and we are reiterating our full year guidance. Despite the challenging backdrop, demand signals remain strong across the board. We continue to invest and innovate to ensure that we are ready to deliver when supply chains improve and are well- positioned to drive towards our long-term financial targets. With that, I'd like to pass the call to Sarah to walk through our financials. Sarah? Thanks, Bob. Overall, our performance this quarter was in line with our expectations. To provide some context, it's important to remember that the first quarter is our seasonal low. It typically accounts for only 10% of Attachments annual net sales, and as we level set our costs across the year, it often results in not turning a profit in the quarter, as is the case this year. Our results also have a tough comparison to the record consolidated results in the first quarter of 2021. However, it was really the first quarter of 2021 that was the anomaly. As a reminder, our businesses rebounded as we exited the first phase of the pandemic, combined with robust snowfall in February 2021 that created massive demand for parts and accessories, plus the supply chain constraints had not yet taken hold. These factors combined for unusually strong performance in both segments, producing record first quarter results that we did not expect to repeat going into this year. With that said, let me walk through the numbers for the first quarter of 2022. On a consolidated basis, we delivered net sales of $102.6 million and gross profit of $21.1 million, compared to net sales of $103.3 million and gross profit of $26.3 million during last year. Net sales were essentially flat due to higher pricing at both segments, offsetting lower volumes. SG&A expenses, including amortization expense, were $24 million compared to $22.6 million during the first quarter of 2021. The increase was largely due to higher labor costs as well as a return to more normalized marketing spend, both at Attachments. We recorded GAAP net loss of $3.9 million or -$0.18 per diluted share, compared to a GAAP net income of $742,000 or $0.03 per diluted share in 2021. On an adjusted basis, we generated net loss of $2.3 million or $0.11 per diluted share, compared to an adjusted net income of $1.2 million or $0.04 per diluted share. Similarly, we generated consolidated adjusted EBITDA of $4.6 million compared to $10.7 million in the corresponding period of the prior year. Profitability was impacted by lower sales volumes in both segments and unfavorable product mix comparisons within Attachments. Interest expense was $2.1 million for the quarter, lower than the $3 million incurred in the same period last year as we benefited from the refinancing we completed in June of 2021. Now let's turn to the earnings information for the two segments. Our Work Truck Attachments segment generated net sales of $45.8 million compared to $42 million for the first quarter of 2021. The 9% increase was due to higher pricing on higher input costs, which offset lower volumes. Adjusted EBITDA was $3 million during the first quarter, lower when compared to record adjusted EBITDA of $8.2 million reported the prior year. The decrease was based on lower volumes and product mix impacting profitability as well as outsourcing costs and a return to more normalized marketing spending. As I mentioned earlier, we have a tough comparison this quarter given the results last year when we saw tremendous snowfall in February of 2021, which created huge demand for parts and accessories, boosting both revenue and profitability. If you go back and compare the first quarter of 2022 to our last normal first quarter in 2019, you'll see our performance this quarter was positive. The snow season ended slightly below the 10-year average, which we don't anticipate will have a significant negative impact on demand during our preseason order period, which is off to a strong start this year. Turning to Work Truck Solutions, where we reported net sales of $56.8 million and adjusted EBITDA of $1.6 million, compared to net sales of $61.4 million and adjusted EBITDA of $2.4 million in the same period last year. Our results this quarter were impacted by lower volumes and inefficiencies stemming from chassis and component shortages that hindered production, plus inflationary pressures. As Bob mentioned, we're seeing a continuation of recent trends. Demand remains strong and backlog continues to grow at both Henderson and Dejana. With that said, I'll turn to the balance sheet and liquidity figures. Net cash used in operating activities during the first three months of 2022 was $26 million, compared to cash provided of $24.1 million for the same period last year. Free cash flow for the first three months of 2022 was -$28.2 million, compared to $22 million during the same period last year. The changes were driven by the less favorable operating results, as well as an increase in inventory in anticipation of inflationary price increases and supply chain disruptions, plus the timing of supplier payments. Inventory increased to $143.8 million at the end of the quarter, compared to $99.9 million at the end of the first quarter of last year, as we strategically built inventory and bought forward in areas that will allow us to optimally deliver on customer demand in 2022. Accounts receivable at the end of the quarter were $43.1 million, in line with the $45.1 million at the end of the first quarter last year, as expected. Capital expenditures for the first three months of 2022 totaled $2.2 million, consistent with the $2.2 million that was incurred last year. We continue to make the necessary investments to fuel our long-term growth projects. We are enthusiastic about our vertical integration plans and look forward to sharing more updates with you later this year. After announcing another increase on our last call, we paid our quarterly cash dividend of $0.29 per share at the end of March as planned. We have been able to consistently generate significant free cash flow in recent years despite difficult operating conditions. Therefore, in addition to increasing the dividend, we also initiated a $50 million share buyback program earlier this year, further demonstrating our commitment to deploy excess capital. During the first quarter, we repurchased approximately 82,000 shares at a cost of approximately $3 million. The effective tax benefit was 20.6% and 11.6% for the first quarters of 2022 and 2021 respectively. The rate was higher in the first quarter of 2022 due to discrete items related to stock-based compensation. At the end of the first quarter, our net debt leverage ratio of 3.1x, higher than 2.5x at the end of 2021. We plan to maintain our goal of keeping the ratio between 1.5x and 3x this year and expect it to drop back below 3x later this year. Finally, we are reiterating the guidance established last quarter. For 2022, we expect net sales of between $570 million and $630 million. Adjusted EBITDA is predicted to range from $70 million- $100 million. Adjusted earnings per share are expected to be in the range of $1.25 per share to $2.15 per share. Our effective tax rate is expected to be approximately 25%-26%. Of course, this outlook assumes economic conditions remain relatively stable and that we experience close to average snowfall levels in our core markets in the fourth quarter of this year. While the global economic implications of the war in Ukraine continue to unfold, we have not seen any supply impact to date, and we don't have any direct customers or suppliers located in the region. While our guidance assumes the same level of inflation contemplated on our February call, there are many moving pieces that we will continue to monitor and update throughout the year. We feel comfortable reiterating guidance given the first quarter results met our expectations and the preseason is off to a strong start in attachments. Demand remains strong in solutions, and as we noted last quarter, 2022 is expected to mirror 2021, with supply chain difficulties in the first half of this year gradually subsiding and starting to improve as the second half of the year unfolds. Data coming out of the work truck industry indicates 2023 should produce similar conditions to 2019, which was a record year for Douglas. Therefore, we remain confident in both our 2022 annual guidance and our long-term targets. Demand signals remain strong across the board. We continue to invest in our operations, so we are primed and ready to deliver when supply chains improve, which will subsequently drive long-term growth. With that, we'd like to open the call for questions. Thank you, ma'am. As a reminder, to ask a question, you will need to press star one on your telephone keypad. To withdraw your question, you may press the pound key. Please stand by while we compile the Q&A roster. Our first question comes from the line of Timothy Wojs with Baird. You may ask your question. Hey, everybody. Good morning. Good morning. Goodmorning That's a first. My name's been butchered before, but that's definitely a first. Maybe just to start off on the solutions business, just it doesn't seem like anything's really changed in terms of your view on the year and chassis supply and things like that. I guess I wanted to confirm that. I know you're not really, you know, kind of fully control, you know, the supply, but kinda any update on kind of what you've heard by various classes? Yeah, I think it's a fair conclusion, Tim, that we're not seeing any significant change. As Sarah mentioned, when we entered 2022, the OEMs were sending signals to expect the full year 2022 chassis supply to be pretty equal to 2021, but almost kind of flipped a little bit, right? In 2021, we didn't really see some of the chip issues surface until second half of the year. So deliveries were stronger in the front half, got a little softer in the back half, and we're seeing a little softer in the front half of 2022, with projections to slowly start to improve in the second half of 2022. So that's still the thesis that we have. We haven't heard anything, plus or minus, to that statement from the OEMs at this point. Okay. Okay, that's good. You know, I know it's small numbers, so maybe there's some math things to it. I mean, you know, the profitability in the quarter in solutions was the strongest it's been in the last three or four quarters. Is that just a reflection of just getting the business right-sized, you know, for the current volume environment? Or is there some mix elements? Just anything there that could kinda give us a little bit of, you know, color on that? I would say there's probably two significant items that have shown sequential improvement in Q1. One is, as you know, it's more difficult getting price into the market on our solutions businesses. And so now here we are, after a full year of steadily increasing price, we're delivering on some of those. Now we're seeing more of that come through. The second item which we're really pleased with is the hard work on the solutions team, from the standpoint of getting variable costs out, continuing to work, you know, on our DDMS initiatives. We had the two IDC closures that we talked about on the last call at Henderson. There are some cost structure initiatives that are taking hold that we expect to continue to show improvement on as we go throughout the year. Okay. Okay, great. I guess on the attachments business, is there any way to think about the pricing contribution versus the volume contribution in the quarter? I noticed you didn't say anything about inflation impacting margins there. Are we kind of to read that that's you know, meaning you're in a good spot on price cost in the attachments business going forward? Yeah, when it comes to price and attachments, Q1, we covered the inflation. You know, we were really pleased last year when we closed out the year, and as a company, we covered the inflation in total. That trend continued into the first quarter, which is great. What I can say about the magnitude of the price is, you know, we've had double-digit pricing going into the market. That's all in the first quarter. So certainly well up over double digits is related to price. Okay. Okay. I've got one more. Just on the buyback, I know it's kind of a small amount, you know, $3 million, but it's obviously one of your weaker free cash flow quarters. I'm just trying to think about how you're thinking about the buyback, especially with the stock sitting here at $30 this morning. Yeah, I mean, the way we're thinking about the buyback, one, it's another tool in the toolbox that we thought was great to bring into the fold. We really wanted from a minimum buyback perspective, on an annual basis, to cover the equity that we have in our compensation plan. You can call that $6 million. That's kind of the low that we would like to do, and then we're going to be looking at our free cash flow generation and what we expect in the back half of the year, to make any decisions on further buybacks. Essentially, you know, we just are starting down that path with what we bought back in the first quarter. Okay. Okay, great. Well, good start to the year, and good luck on the rest of it. Thanks, Tim. Thanks, Tim. We have our second question, or our next question from Mike Shlisky of D.A. Davidson. You may ask your question. Hi, guys. Good morning. Good morning, Mike. Good morning, Mike. Sarah, your last comment in your prepared statement about 2023 were interesting. It sounded like what you've been hearing so far is mostly from an industry volume top-line perspective 2023. I was wondering if you could give me a little bit more commentary about how Dejana and Henderson are feeling about 2023. Do you feel like you're on the right path to additional share gains next year in the non-attachments, in the non-truck attachments business? And from a margin perspective, can you match 2019 as well? I'm trying to dissect all of that question. It was a little choppy, Mike. The comment of 2023 compared to 2019 was really a supply chain comment, which is getting back to what we expect for chassis flow, which then should give us the opportunity to get at the backlog that has just continually grown, which should translate pretty well to the flow-through to EBITDA. I think you went somewhere on attachments with non-truck. Could you repeat that if you did? Yeah. I was just curious to see. I mean, I think the broader question was holistically, is your feel on EBITDA and earnings similar to 2019 coming up to 2023, just holistically speaking, attachments, non-truck solutions, and your margin performance potential next year. You know, I would love to say that we're getting back to 2019 record year performance. There's just the moving pieces and the headwinds are too many between now and the start of 2023 for me to be able to confidently make that statement. There's too many items that are really outside of our control. There's nothing structurally in the business that would say that we couldn't get there. It really is going to be very dependent on supply and many of the other things we're navigating through. Yeah. I think I would just add to that. Sarah's point is spot on. When chassis flow again like they did in 2019, that 2019 performance is clearly in our sights. We've done so many things to improve the business over the past two years, whether it's new product development initiatives that have launched or will be launched, whether it's, as Sarah commented earlier, about some of the productivity DDMS improvement initiatives, some of the adjustments to our fixed cost structure, some of the cost reduction programs to drive variable costs down. All those things are in play in 2023, and we're part of our 2019 performance. If we can get. You know, once this chassis thing gets back on a historical pace, we feel very good about our go-forward prospects. Great. Can we maybe just come back to the present day? Can you maybe compare and contrast for us the chassis supply differences today between Henderson Products, Dejana, and Work Truck Attachments? You know, who's in the lead currently? Who's behind? Are there any nuances between each of those three areas? Specific to supply chain? Yeah, for chassis supply. Of the heavy trucks or the medium or the light duties, which one's doing the best, which one's doing the worst currently? I think I would give kudos to all of our sourcing teams for how they're navigating through these crazy times. If you just think about it logically, Mike, on the Work Truck Solutions side, where you are sourcing multiple different components to build a work truck, it's certainly three- and four-dimensional chess for those folks. On the Work Truck Attachments side, where you're building more of a stock product, you still face the same challenges, just not to the same magnitude. We are feeling the impact of supply chain constraints even past chassis, more so on the Work Truck Solutions side than on the Work Truck Attachments side. It has nothing to do with the performance of the teams. It has everything to do with the business model and the sheer complexity of the products we have to source. Okay. That makes sense. One last one for me. Do you want me to comment, Bob, on how did NTEA go for you in general, for both segments? Any large new order leads or interesting learnings from the show you could share with us? Yeah, I think, you know, it was. First off, there was excitement in the air, I think, just to be face to face again after two years of having the show shut down. We had some new products there on the attachment side. You've heard us talk about our non-truck offerings a little bit more. Those are more of a growth avenue for us, and those were pretty well-received. On the solutions side, I think the most important thing there was just talking to dealers and customers about how they feel demand is gonna continue to be strong going forward. Really kind of walked out of there with a confirmation of how solid we think that our long-term prospects are. That was probably the biggest takeaway for me. Got it. Well, thanks so much. I'll pass it along. Thank you. Thanks, Mike. Our next question from Chris McGinnis with Sidoti. You may ask your question. Good morning. Thanks for taking my questions. Morning, Chris. I guess just, if you said this, I apologize. I may have missed it. Just, any notable difference in terms of the cadence of preseason for 2022 versus 2021? I guess maybe just start there with a quick question. Yeah. It's a little early yet. We had this conversation a couple days ago. Do we have a feel yet for what the Q2, Q3 shipment mix is going to turn out to be? We're just don't have enough data yet. We can tell you that on the April order book, we have seen orders generally a little higher than our estimates on a dealer by dealer basis, which means we're off to a great start. As I said earlier, inventories are in great shape out in the field. Dealer sentiment is positive. The end users are still having record performance years on the green side, and that's translating into them spending more money during the winter months. We're pretty bullish about what the preseason is gonna hold for us. There may be. Maybe I'll let Sarah comment on this. One of the watch items for us here is a stronger than anticipated preseason possibly could include some pull ahead from the fourth quarter. Sarah, you wanna comment on that a little bit? Well, I'd start by answering your question first, Chris, not with anything specific, but to say when you look at 2020, the preseason split, where we flip-flopped and we were heavier in the third quarter, we expect this year to be much closer to typical, closer to the 2021 kind of split, with Q2, Q3. If anything, more level, with Q2 being higher. As Bob said, a little too early to tell. I think to comment on the market dynamics that Bob's mentioning, and again, it's probably too early to tell, you know, with the strength that we're seeing in preseason, and all the inflation that's out there, the pricing that's out there, the news that's out there with difficulty to secure supply, you know, there is a bit of a question mark on the demand and whether or not any of the preseason orders would impact fourth quarter demand, with dealers getting in and locking in more of their supply potentially. We don't have any, you know, support to say that that's absolutely a fact, but it is something we're gonna be keeping a close eye on and more to come as we navigate through the year. Yeah. No, I appreciate that color. I was gonna lead with another question of asking, do you think inflation can pull forward? It sounds like, you know, that could be a factor. It's just too early to tell. Right. I appreciate that. I guess just given the supply chain constraints around components, does it make you kind of rethink the backward integration initiative you have in place to maybe making some of those components so that you're not as, you know, dependent on those, suppliers that you're working with? I was just wondering if you could talk about that. Thanks. Well, sure. I mean, you know, it's a secondary benefit of that strategy for sure, Chris. Most of the initial project work that we're doing there is focused on products that will allow us to drive revenue growth, so products we can eventually take to the market, that are more productive, more efficient, more reliable, and more durable than the goods that we purchased on the outside before. The point you're making is valid, right? I mean, we can get to a point in this multiple year strategy where we end up looking at just basic everyday components that we think we can build, and not just do it a little lower cost, but also maybe focus on those areas where the supply lines are long or where we feel that the market for those components just isn't as reliable as we would like it to be. That's an excellent point. Okay. Great. I appreciate it. Thanks for taking my questions, and good luck in Q2. Thanks. Thanks, Chris. Again, if you would like to ask a question, you will need to press star one on your telephone keypad. That is, again, star one on your touchtone phone. There are no further question at this time. I will now turn the call over back to Bob McCormick, President and CEO. I'd like to thank you for your time today and would love to leave you with a couple of thoughts. We're encouraged with where both segments stand today and certainly encouraged about Douglas's long-term prospects. Our Q1 results were in line with expectations and demand trends remained very positive. While we look forward to the macroeconomic headwinds subsiding, we are constantly working to improve our operations, so we will be better positioned and more efficient when we do see the situation improve. We are reiterating our guidance and continue to manage through the short term while maintaining focus on achieving our long-term strategic objectives. We thank you for your time today and look forward to seeing you in person in the coming months. This concludes today's conference call. Thank you all for joining. You may now disconnect.