PLOW

• Overall Performance: The company delivered a record Q2 2026, with strong performance across both segments driven by three core factors: above-average 2025 winter snowfall boosting attachment segment preseason demand, robust municipal product demand in the solutions segment, and consistent operational execution across the organization. Performance of the attachment segment exceeded management expectations.

• Work Truck Attachments Operational Updates: Preseason orders were strong due to solid retail sales and low dealer field inventory of plows and hoppers; dealers are also rebuilding inventory levels after last winter. 50% of 2026 preseason orders were shipped in Q2, with the remaining 50% scheduled for Q3 (a shift from the 60%/40% Q2/Q3 split in 2025), setting up expectations for a very strong Q3. The integration of Venco Venturo is essentially complete, with the acquired business already benefiting from Douglas Dynamics' operational and sourcing expertise. Parts and accessory sales are on track to surpass the 2025 record by the end of Q3 2026. The company is building higher finished goods inventory than last year to meet in-season demand once winter begins.

• Work Truck Solutions Operational Updates: Municipal demand remains the core driver of strength, with a strong backlog extending into 2027, offsetting softness in some commercial segments. Three capacity expansion projects are underway: the new purpose-built Missouri facility is now fully operational on schedule; a new logistics facility is under construction at the Manchester, Iowa site and will open in Q4 2026 to free up manufacturing space and improve throughput; the Ohio Outfit Center will relocate to a larger facility to increase capacity and efficiency. Dealer channel demand has shown recent improvement, while a small number of large fleet customers have paused ordering (not canceled) to evaluate current geopolitical and economic conditions. Management is taking targeted cost optimization actions in soft commercial areas to preserve profitability.

• Strategic Update: Management has rolled out a new company-wide strategic framework centered on three pillars: optimize, expand, and activate. The company also updated its mission (to keep people safe and communities thriving) and long-term vision (to build the most comprehensive portfolio of trusted work vehicle attachments and solutions, setting the standard for safety, quality, and productivity backed by the industry's best team) to align operations across the entire organization, moving away from the previous brand-level focused strategy. The framework does not change core operations but clarifies internal priorities and external long-term direction.

• Capital Allocation: The company remains committed to returning excess cash to shareholders via its 16-year running consistent dividend, and is prudent in evaluating strategic M&A opportunities aligned with its activate pillar, only pursuing targets at attractive valuations.

• Management raised full-year 2026 guidance across all metrics following better-than-expected performance in the attachment segment. The new guidance assumes stable economic and supply chain conditions and average Q4 2026 snowfall.
• Full-year 2026 net sales is now guided to a range of $765 million to $805 million, up from prior ranges.
• Full-year 2026 adjusted EBITDA is now guided to $120 million to $135 billion, representing an 8.5% increase at the midpoint compared to prior guidance.
• Full-year 2026 adjusted earnings per share is now guided to $2.90 to $3.40, representing a 12.5% increase at the midpoint compared to prior guidance.
• The effective tax rate is expected to remain in the 24% to 25% range, unchanged from prior outlooks.
• Full-year capital expenditures are still expected to fall in the historical range of 2% to 3% of net sales, consistent with prior plans.
• The company expects full-year attachment segment margins in the low 20%, and solutions segment margins in the low double-digits, in line with the updated guidance framework. If the low end of adjusted EPS guidance is achieved, it would represent a 20% increase over the company's previous annual record set in 2019.

Douglas Dynamics has two business segments: Work Truck Attachments and Work Truck Solutions. For Q2 2026: 1. Work Truck Attachments: Net sales increased 20% year-over-year to $129.3 million, representing 60.2% of consolidated net sales. Adjusted EBITDA increased 13% year-over-year to $35.8 million, with an adjusted EBITDA margin of 27.7%. Performance was driven by strong pre-season demand for snow plows/hoppers and parts/accessories, partially boosted by the completed integration of Venco Venturo. 2. Work Truck Solutions: Net sales were relatively flat year-over-year at $85.3 million, representing 39.8% of consolidated net sales. Adjusted EBITDA came in at $8.8 million. Results were supported by strong municipal business demand that offset ongoing softness in commercial operations, matching expectations after two prior years of record Q2 results.

• Actual Q4 2026 winter snowfall can vary significantly from the average assumption, which would create volatility in in-season attachment segment sales and results.
• Raw material and energy-related inflation remains an ongoing pressure, though management is taking mitigating actions to offset these costs.
• Uncertainty around geopolitical and economic conditions has led some large fleet customers in the solutions segment to pause ordering, which creates near-term demand volatility.
• Demand in some commercial segments of the solutions segment remains soft, requiring targeted cost adjustments to preserve profitability.

Q: Why did Work Truck Attachments EBITDA margins decline year-over-year in Q2 2026 despite 20% sales growth, and what is the full-year margin outlook?

A: The primary driver of slight year-over-year margin compression is the addition of Venco Venturo, which has lower near-term margins than the legacy attachment business. Additionally, the shift to a 50-50 Q2-Q3 preseason shipment split changed product mix timing versus last year's 60-40 split. Excluding the Venco acquisition, legacy attachment margins would be flat year-over-year on higher volumes. Management expects full-year preseason and full-year total attachment margins to be up year-over-year, reaching the low 20% range.

Q: Where did the upside surprise for attachment segment preseason demand come from, and were both finished equipment and parts/accessories inventory low enough to drive dealer restocking?

A: Preseason order upside came across all product lines: plows, hoppers, and particularly parts and accessories, where orders were far stronger than expected 90 days prior. Management has formal visibility that dealer inventory of finished plows and hoppers is lower than it has been in several years, and dealers reported strong recent retail sales of these products. For parts and accessories, inventory visibility is more limited, but strong dealer orders confirm anecdotal evidence of low channel inventory and restocking demand.

Q: Can you confirm expectations for Q3 2026 attachment segment revenue and margins given the 50-50 preseason shipment split?

A: Q3 2026 attachment revenue will be well over $100 million due to the higher volume of preseason shipments versus the 40% share shipped in Q3 2025. While EBITDA margins are expected to be above 20%, sequential margins versus Q2 2026 will be lower.

Q: What is driving municipal business strength in Work Truck Solutions, and what is the current status of backlog and capacity additions?

A: Municipal strength comes from strong operational execution, reliable on-schedule delivery, high quality, and strengthened customer relationships built over the past several years that have led to repeat and new multi-year contracts. Current backlog is near the record high set in 2022. The new Missouri facility added 10% additional municipal capacity, and the upcoming Ohio facility expansion will add a similar amount of capacity in 2027, with room for further growth if needed.