Home to the best selling brands in the industry, Douglas Dynamics, Inc. is
North Americas premier manufacturer of vehicle attachments and equipment. For
more than 65 years, the Company has been innovating products that enable end
users to perform their jobs more efficiently and effectively, providing opportunities
for businesses to increase profitability. Our commitment to continuous improvement
enables us to consistently produce high quality products and drive shareholder
value. The Douglas Dynamics portfolio includes snow and ice management attachments
sold under the BLIZZARD®, FISHER®, SNOWEX® and WESTERN® brands,
turf care equipment under the TURFEX® brand, and industrial maintenance
equipment under the SWEEPEX® brand. We completed our acquisition of Henderson
by merging a wholly-owned subsidiary of the Company with and into Henderson
pursuant to a merger agreement. The acquisition provides the Company with Henderson’s
diverse product portfolio including ice control equipment, snow plows, dump
bodies, muni-bodies, and replacement parts. Additionally, as a result of the
Henderson acquisition, the Company acquired Henderson’s brands, and access
to Henderson’s network of authorized dealers. We operate as a single segment.
We offer a broad product line of snowplows and sand and salt spreaders for
light trucks that we believe to be the most complete line offered in the U.S.
and Canadian markets. We also provide a full range of related parts and accessories,
which generates an ancillary revenue stream throughout the lifecycle of our
snow and ice control equipment. As a result of the acquisition of Henderson,
we also provide customized turnkey solutions to governmental agencies such as
Departments of Transportation (“DOTs”) and municipalities. We also
believe that, with the addition of Henderson, we are now the market leader in
the heavy-duty segment of the North American snow and ice control market which
includes equipment for class 7 and class 8 truck chassis.84% of our net sales
were generated from sales of snow and ice control equipment, respectively, and
16% of our net sales were generated from sales of parts and accessories.
We sell our products through a distributor network primarily to professional
snowplowers who are contracted to remove snow and ice from commercial, municipal
and residential areas. Over the last 50 years, we have engendered exceptional
customer loyalty for our products because of our ability to satisfy the stringent
demands of our customers for a high degree of quality, reliability and service.
As a result, we believe our installed base is the largest in the light truck
market with over 500,000 snowplows and sand and salt spreaders in service. Because
sales of snowplows and sand and salt spreaders are primarily driven by the need
of our core end-user base to replace worn existing equipment, we believe our
substantial installed base provides us with a high degree of predictable sales
over any extended period of time.
We believe we have the industry’s most extensive distribution network
worldwide, which consists of over 2,200 points of sale including 125 independent
truck equipment distributors as a result of the Henderson acquisition. Additionally
we have added Henderson’s five truck equipment installation facilities
located throughout the United States. Direct points of shipment are predominantly
through North American truck equipment and lawn care equipment distributors.
Most of our distributors are located throughout the snow belt regions in North
America (primarily the Midwest, East and Northeast regions of the United States
as well as all provinces of Canada). We have longstanding relationships with
many of our distributors. We continually seek to grow and optimize our network
by opportunistically adding high-quality, well-capitalized distributors in select
geographic areas and by cross-selling our industry-leading brands within our
distribution network. Beginning in 2005, we have extended our reach to international
markets, establishing distribution relationships in Northern Europe and Asia,
where we believe meaningful growth opportunities exist.
Both the light truck and heavy duty snow and ice control equipment industries
in North America consist predominantly of domestic participants that manufacture
their products in North America. The annual demand for snow and ice control
equipment is driven primarily by the replacement cycle of the existing installed
base, which is predominantly a function of the average life of a snowplow or
spreader and is driven by usage and maintenance practices of the end-user. We
believe actively-used snowplows are typically replaced, on average, every 9
to 12 years.
We believe that both light and heavy duty snow and ice control equipment are
both driven primarily by the replacement cycle of the existing installed base,
which is predominantly a function of the average life of a snowplow or spreader
and is driven by usage and maintenance practices of the end-user. However, we
believe that demand for heavy duty trucks is less elastic than light trucks.
Heavy duty truck end users typically are comprised of local governments and
municipalities which plan for and execute planned replacement of equipment over
time.
The primary factor influencing the replacement cycle for snow and ice control
equipment for light trucks is the level, timing and location of snowfall. Sales
of snow and ice control equipment in any given year and region are most heavily
influenced by local snowfall levels in the prior snow season. Heavy snowfall
during a given winter causes equipment usage to increase, resulting in greater
wear and tear and shortened life cycles, thereby creating a need for replacement
equipment and additional parts and accessories.
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