Thank you. Welcome, everyone.

Thank you for joining us on today's call. A few quick items before we begin.

First, please note that some of the information you will hear during this call will consist of forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 as amended. Such statements express our expectations, anticipations, beliefs, estimates, intentions, plans and forecasts.

Because these forward-looking statements involve risks and uncertainties, our actual results could differ materially from those in the forward-looking statements. For more information regarding such risks and uncertainties, please see the sections titled Risk Factors, Forward-Looking Statements and Management's Discussion and Analysis of Financial Condition and Results of Operations included in our Form 10-K for the year ended December 31, 2016, filed with the Securities and Exchange Commission, and the impending updates to these sections in our quarterly report on Form 10-Q.

Second, this call will involve a discussion of adjusted EBITDA, adjusted net income and adjusted earnings per share, all non-GAAP financial measures, which under SEC Regulation G, we're required to reconcile with the most directly comparable GAAP measure. Reconciliation of these measures to the closest GAAP financial measure is included in today's earnings press release, which is available at douglasdynamics.com.

Finally, please remember the company completed the acquisition of Dejana Truck & Utility Equipment on July 15, 2016, creating the Work Truck Solutions segment. As such, all references to results for the full year of 2016 for the Work Truck Solutions segment refer to the period from July 15, 2016, to December 31, 2016.

Now I'll turn the call over to Jim to provide an overview of our performance before I review the financial results. Jim?

Thank you, Sarah. I'm pleased to say that we ended the year with encouraging results.

The ongoing stability in the economy and positive dealer sentiment, plus strong backlog and demand trends, all helped to produce a good quarter and record full year net sales.

Fourth quarter net sales increased 6% to $138 million, producing net income of $34.5 million or $1.50 per diluted share, which includes a onetime benefit from U.S. tax reform.

Excluding this benefit, adjusted earnings per share increased from $0.45 per share in the fourth quarter prior year to $0.53 per share this year.

We are pleased with these operating results, especially given the chassis-related headwinds we faced and slow start to winter weather across most of the country. In addition, select North American pickup truck sales increased 4% in 2017 compared to the previous year.

We also continued to see improving dealer optimism, and our most recent look at dealer field inventory at the end of January indicated inventories were lower than the same period a year ago, which is positive.

Looking across our core markets through mid-February, we have seen near-average snowfall totals overall. Winter got off to a slow start in many areas, but we saw nearly average snowfall across the country overall in the fourth quarter.

So far, in the first quarter of 2018, January saw below-average totals, but we have seen more snowfall in our core markets in early February. Compared to this point last year, we are still ahead for snow totals in our core markets, but it will depend on how the last 30 days unfold as to whether we reach average snowfall totals or fall below.

The teams at WESTERN, FISHER and SnowEx have done a terrific job, and we are already looking forward to preseason.

Before going further, let me provide an update on the chassis availability issues that impacted our results in 2017. At Henderson, the availability of chassis from 2 of our OEM partners is slowly improving but will take time to get back to normal.

We've seen sequential improvements for several quarters, and we are receiving more chassis today. In addition, we are also monitoring increasing overall demand for Class A trucks across all OEMs, which could impact our supply

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and we'll provide an update during our first quarter earnings call in early May.

The Henderson team continues to work hard to adjust operations in light of these issues. The good news is that demand and order trends remain strong in the medium to long term and our business continues to strengthen.

And we will continue to make improvements using DDMS, which I will mention later.

Turning to our Work Truck Solutions segment. The important strategic investments we're making will enable us to take advantage of many of the growth

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and we are receiving pool trucks at all 3 facilities in Pennsylvania and New York. The development of the Kansas City facility is now complete, and we have just begun accepting ship-thru vehicles at that location.

As a reminder, this facility will be focused on assisting an important OEM partner with the upfit of medium and large-sized vans, which are produced nearby. We expect revenue from the new ship-thru vehicles to ramp up in the coming years.

Our sales teams are now actively quoting new business and the long-term opportunities are exciting.

As we mentioned last quarter, with the multiple natural disasters that occurred in the second half of 2017, our OEM partners worked to help those regions impacted and as such, some Work Truck Solutions group allocations were being diverted away from our truck pool operations to other areas of the country. As we had hoped, those issues do seem to have been temporary and supply has significantly improved in recent months.

We remain focused on executing our expansion plans and expect to meet our customers' demands throughout 2018.

With that brief review of our operations complete, I'd like to step back and discuss the DDMS example. It is hard to believe, but it's been just over 3 years that Henderson become part of Douglas Dynamics.

Today, Henderson is a very important and integral part of our operations. Given the anniversary, it seems appropriate to look back and share some of the impressive results of our DDMS journey at Henderson, which remains an important focus for everyone involved.

The wisdom of many versus the knowledge of one. More than 150 people on the Henderson team have been trained in DDMS problem-solving methods, which is clearly the best way to ensure the process propagates throughout our operations.

Remarkably, over 300 process improvements have been initiated, which doesn't include all of the minor adjustments that are being made on a daily basis. We have completed more than 60 week-long Kaizen events spanning all 7 locations and across all departments.

With hundreds of people focusing on making improvements, we are starting to see tangible results of our efforts. As a result, we have produced significant improvements in quality, which have resulted in warranty dollars decreasing over 50% in 3 years; we've seen inventory turns that have improved significantly between 2014 and 2017; SG&A as a percentage of sales has decreased 60 basis points during the past 3 years; and finally, and probably most importantly, our lead times measured from receipt of order to delivery have decreased significantly.

Today, our lead times are 1/4 of what they were when we acquired Henderson, which our competitors have yet to replicate.

Suffice it to say, we have seen considerable success with DDMS at Henderson over the past few years, and the great news is that we have a lot more work to do. I want to thank everyone at Manchester and our upfit facilities around the country for their ongoing efforts to improve the business.

Your hard work is paying off and helping to ensure our future success.

With that said, I'll move on to our cash usage priorities. As previously reported, we paid a quarterly cash dividend of $0.24 per share on the company's common stock on December 29, 2017.

Once again, the Board of Directors and management decided it is appropriate to increase the dividend this year, declaring a quarterly cash dividend of $0.265 per share for the fiscal quarter -- first fiscal quarter of 2018. This increase is larger than previous years and equates to a projected full year annual increase of 10% or $0.10 per diluted share.

We felt the larger increase was appropriate given our financial performance and the projected favorable impact of our tax rate due to the 2017 tax reform.

Aside from the dividends, we remain committed to using our excess capital to reduce our debt, as Sarah will discuss later. And for M&A, we are continually tracking companies that would be a good strategic fit with our offering, and we will pursue logical deals while maintaining our disciplined approach.

For now, we are focused on integrating and pursuing DDMS projects in our Work Truck Solutions segment. While we will continue to explore other opportunities, there are no major deals on the horizon at this time.

Overall, we believe that we are in a strong position with stability in the overall economy, strength in light- and medium-duty truck sales, positive dealer sentiment and inventory all working in our favor today.

With that, I'll turn the call over to Sarah to discuss our financial results in more detail. Sarah?

Thanks, Jim. I'll first review our full year consolidated earnings and will then provide more detail on the fourth quarter consolidated and segment results.

Full year net sales were a record $475 million, increasing 14% over prior year. Revenue increased due to the incremental sales from our Dejana and Arrowhead acquisitions, both in our Work Truck Solutions segment.

This increase was partially offset by lower volumes in Work Truck Attachments, which were impacted by the significantly below-average snowfall of the last 2 seasons and chassis availability impacting our municipal operations.

Full year net income of $55.3 million or $2.40 per diluted share increased from $39 million or $1.70 per diluted share a year ago. The results include a onetime benefit of $22.5 million or $0.97 per diluted share associated with the revaluation of deferred tax liabilities due to U.S.

tax reform.

Full year adjusted net income of $33.5 million or $1.45 adjusted earnings per share decreased from $36.4 million or $1.58 in 2016. This decrease is primarily due to higher interest expense on the incremental borrowings put in place last year to fund the Dejana acquisition.

The effective tax rate for the year was a onetime benefit of 4.6% of pretax income resulting from U.S. tax reform.

Excluding that item, the effective tax rate would have been 37.9% for the year, a slight decline compared to an effective tax rate of 38.8% for the prior year.

Next I'd like to cover our fourth quarter results, which showed strength in both segments when compared to the prior year. For the fourth quarter of 2017, net sales were $138 million, representing a 6% increase over net sales of $130.1 million during the same period prior year.

The increase was due to greater snowfall versus the past 2 years, which resulted in higher demand in Work Truck Attachments and incrementally higher sales in Work Truck Solutions as our new facilities ramped up operations.

SG&A expenses were $16.5 million for the fourth quarter of 2017 compared to $16.3 million in the same quarter of 2016. SG&A spend remains relatively flat on higher sales due to implemented income protection plans in our Work Truck Attachments segment in light of lower snowfall, offset with cost related to new facilities in Work Truck Solutions.

We produced adjusted EBITDA of $30.3 million in the fourth quarter of 2017, an increase of $2.9 million over last year's adjusted EBITDA of $27.4 million. The 10.6% increase was due to higher overall volumes and improved margins in both Work Truck Attachments and Work Truck Solutions.

During the fourth quarter of 2017, the company realized net income of $34.5 million or $1.50 per diluted share, an increase of $24.4 million or $1.06 per diluted share compared to the fourth quarter of 2016. The dramatic increase is related to the onetime benefit of $22.5 million that I mentioned earlier associated with U.S.

tax reform. On an adjusted basis, net income was $12.1 million or $0.53 per diluted share, a marked increase compared to adjusted net income of $10.3 million or $0.45 per diluted share for the fourth quarter of 2016.

Again, this increase is primarily related to stronger sales in Work Truck Attachments with higher snowfall levels seen in the fourth quarter of 2017 versus the same period in 2016, and sales from our new facilities ramping up in the Work Truck Solutions segment.

Turning to the earnings information for the 2 segments. Work Truck Attachments reported revenue of $103.5 million and income from operations of $25.9 million during the fourth quarter of 2017.

In the same period prior year, the segment's revenue and income from operations were $97.8 million and $23.3 million, respectively. The year-over-year increase was driven by improved demand for our commercial snow and ice products, which ultimately offset the negative impact caused by the disruption to our chassis supply chain.

Next, the Work Truck Solutions segment reported revenue of $41 million and income from operations of $4.7 million during the fourth quarter of 2017. Revenue increased 8.1% when compared to $37.9 million in the same quarter of prior year, while income from operations increased 34.3% compared to $3.5 million in the fourth quarter of 2016.

The Work Truck Solutions segment was also negatively impacted by chassis availability issues. However, the impact was less severe than originally expected and was offset by overall higher sales volume.

Moving on, we'll now take a look at liquidity and the balance sheet. Total liquidity, which is comprised of $36.9 million in cash and $99.5 million in borrowing capacity under our revolver, was approximately $136.4 million at year-end.

Total liquidity increased $28.1 million over prior year as we had used more cash in the prior year after funding the Dejana acquisition in July of 2016. For the full year 2017, net cash provided by operating activities was $67.2 million, down slightly from the $69.9 million in 2016.

However, in 2016, the company received approximately $6.2 million net of tax as a cash settlement following the successful conclusion of a patent infringement lawsuit. Excluding this settlement, year-over-year, net cash from operating activities actually increased $3.5 million.

As Jim mentioned, aside from funding the dividend, we are committed to reducing our debt. Based on our higher cash balance exiting the year and our financial performance, we made recent principal prepayments over our scheduled payments.

We made an excess cash flow payment of $11.3 million, which was paid on January 31, 2018, along with a voluntary payment of $18.7 million, a total of $30 million reduction to our borrowings. It's also worth mentioning that earlier this month, we entered into additional interest rate swap agreements to reduce our exposure to interest rate volatility, which we believe is a logical and prudent move as the interest rate environment evolves in 2018.

Capital expenditure for 2017 totaled $8.4 million, a decrease of $1.5 million when compared to 2016 capital expenditures of $9.8 million. Accounts receivable at the end of 2017 totaled $79.1 million, which was comparable to the $78.6 million at the same point prior year.

And finally, our inventory was $71.5 million at December 31, 2017, compared to $70.9 million at the end of 2016. The nominal increase was related to the opening of the 4 new facilities in our Work Truck Solutions segment, offset by higher sales volume in the Work Truck Attachments segment.

Our financial results closing out 2017 allowed us to pay down additional debt in 2018. Our projected performance, along with the expected benefit of a lower effective tax rate, allows us to declare a dividend with a 10% increase over prior year.

And positive economic indicators and strong backlog and demand trends mean we're well positioned to execute our plans in 2018.

With that, I'll turn the call back over to Jim.

Thanks, Sarah. As 2018 starts to unfold, we will continue to execute our plans effectively.

The chassis availability constraints at Henderson are slowly improving but will continue in one form or another in 2018. Thankfully, the chassis availability of Work Truck Solutions has improved and the supply restrictions are returning towards normal.

Overall, we feel confident about our long-term business prospects for both segments.

We still have just over 30 days of winter left, and we have approximately average snowfall across most of our core markets so far this season. It will depend on how weather patterns unfold in the coming weeks as to whether we will reach average snowfall totals or fall below.

Turning to the actual numbers, which are outlined in our press release. We expect net sales for the full year 2018 to come in between $475 million and $535 million.

This should produce adjusted EBITDA in the range of $85 million and $115 million, which would translate into adjusted earnings per share of between $1.60 and $2.20 per share. Lastly, these figures are based on an assumed effective tax rate within a range of 26% to 27%, reflecting the changes from the U.S.

tax reform of 2017.

We continue to implement DDMS across all of our operations and make strategic investments that position us for future growth. We experienced various issues beyond our control in 2017, and we are proud of the way our teams have stepped up to the challenges.

We continue to see tremendous opportunities in the years ahead and our teams are doing everything to deliver for our customers, strengthening relationships and building our brand power. We firmly believe that we have the right team and strategy in place to deliver positive results and growth over the long term.

We are now ready to take your questions. Operator?

My first question is on the Solutions business. It seems like the ramp up of the new facilities are going pretty well.

And so is there a way you can ballpark for us kind of how much capacity have you recently added or maybe how you're thinking about growth going into next year in terms of your outlook in the Solutions business?

I think in the overall business, Josh, we've -- on the solutions side, longer term, we look at mid to high single-digit growth. It will probably ebb and flow a little bit based on how quickly some of these locations ramp up, but we're confident that there's very nice growth in the future.

Okay. And then in the same business, you mentioned that the chassis availability in that business is normalizing, so should we interpret that as pretty much kind of behind us?

Or is there some lingering impact still into the beginning of the year?

Yes, terrific question. There's a little bit of a lingering issue, but I am comfortable in saying it's behind us most of the way.

Okay. Yes.

Okay. And then on inflation.

I guess, traditionally steel, but maybe also on the labor side, I mean, what are you seeing in terms of cost? And what's your ability to kind of offset it with price this year?

Sure. We -- from a labor perspective, we're not seeing a lot of inflation at this particular point.

As you and most people know, it's more and more difficult to find good, skilled laborers, which at some point, will probably result in a level of inflation. But I don't think that it's going to be unmanageable.

From a material inflation perspective, we're seeing some. Again, prices of steel and aluminum and other things were so incredibly low for so long, we do believe that they're coming back towards a more normal environment.

One of the things that's out there for everyone is the potential of Bill 232 and what the impact there is. But I think we've got some time before we see any impact on that.

We're always committed should we see some incredible inflation that we will cover it in pricing. And so we have the ability to cover it in pricing, but we want to do that very judiciously.

This is Jordan Bender on for Mike this morning. So you touched on the Section 232 a little bit.

I was wondering, could you get -- do you have anything left in DDMS to pull any levers there should we see any additional steel inflation?

Sure. That's ongoing from our perspective in terms of buying, in terms of the types of steel that we use.

We do this as a regular course of our business and I think we're going to have to wait and see. At this particular point, we've heard that some domestic steel suppliers are already optimistically -- or opportunistically raising prices even though the bill hasn't passed.

So we're going to have to see what the impact of that on our business is. But we've gone through this 2 or 3x in my career here at Douglas, and I think we've been very successful at managing through it because it does tend to be somewhat temporary.

Okay. And with the average snowfall season that took place, is your 2018 outlook now a picture of what you think Douglas Dynamics can achieve in a normal average year outside of incremental DDMS improvements and new products?

I'm not entirely sure I understand the question. Could you clarify that a little bit?

Yes. So I guess, what are you guys assuming for your guidance for snowfall for the year, more of an average type of year?

Well, sure. Sure, every year we use average snowfall until something else happens.

Up until the middle of February, we've continued to use average because, frankly, it has been about average. The last couple of weeks have been awfully warm around most of the country, so we're still using average snowfall because we've got 30 days left, and it does snow in March.

But our hopes are that the weather that we're seeing in most of the country right now turns a little bit colder and we get some snow.

Okay. And then are you guys making any changes to your distribution networks in Attachments in 2018?

Nothing material. I mean, in that segment, we regularly will make some incremental changes and improvements, but I don't think there's anything worth calling out.

This is Ryan on for Steve. As it relates to the chassis availability issues, it sounds Dejana is mostly back to normal but some potential lingering issues with Henderson, and then you mentioned kind of later in the year you might see some more.

But as we look at the full year and everything kind of combined, Dejana, Henderson, do you expect more or less of a headwind in 2018 versus 2017?

More or less of a headwind? Is that your question, is it more or less of a headwind?

At this particular point, one of the things I have to share with you is we have a lot more knowledge and information about the chassis availability challenges within the industry. So we're dealing with a lot more information than we had last year, which is very positive and very comforting.

And again, I don't know for sure, but we've had direct conversations with the key chassis manufacturers, and they have reiterated to us that they understand how important our business is to their success. So we've had direct dialogue with manufacturers.

They indicate that they're working very hard. What we're anticipating this year is while the issues we were dealing with last year are really sort of solving themselves and we're in a better place, orders for Class A trucks in January and maybe even December just were way off the charts.

And internally, we have some concerns about overall industry capacity if that trend kind of continues for a little while. So we don't know exactly how that plays out.

We're really going to have to wait until May, another quarter, before we have a better handle on the puts and takes and how that impacts us. But we have gotten assurance that we're very important to them and we're going to take them to heart on it.

Got you. And then kind of as it relates to that, I think you're running at 13 consecutive years of growth in Henderson.

Were you able to grow that business in 2017, or were those chassis supply issues too much to overcome?

Yes. Without being too granular, we ended up flat or slightly down from last year, and that's entirely due to those chassis issues.

We had the orders, we didn't have the vehicles.

Okay, makes sense. And then any issue with those orders as they kind of linger out a little bit?

Anyone canceling orders or not understanding the situation and maybe going to someone else?

No. Absolutely, not.

We monitor that. And to this point, that hasn't happened.

And I will say that our quoting activity so far this year is actually stronger than last year. So we're enthused by that.

Good. One final one for me here.

So following tax reform, lower tax rates, some accelerated depreciation for customers, all the good stuff in there, have you seen a change in demand from your customers, whether that's on the Work Truck side or the commercial snowfall side?

It's a terrific question. I don't know that we've gotten any signals from the marketplace that indicated that there's demand driven by tax reform.

Anecdotally, I would say that there's got to be a little bit. We're hearing on the Class A trucks, in particular, that some of the depreciation in the tax reform may encourage people to perhaps replace their fleets a little bit faster.

But we don't have any hard evidence of that yet.

Just a couple of follow-ups, and I apologize if any are redundant, as I just kind of hopped on. In thinking about Henderson, is that -- I think you just commented that you're seeing strong order demand.

Is there an issue with, I guess, backlog and the ability to get it through at some point with kind of the chassis delay and that impact in the operations, or do you think you can catch up over time?

We can catch up over time, that isn't an issue. But some of the margin challenge that we see at Henderson is really because we're fully staffed, and you can't be entirely efficient when you're fully staffed and you're waiting for vehicles to get -- to be delivered so that you can deliver them to our end users.

So we can't be as efficient or as effective, and it does impact, to some degree, our margin.

Okay, and that makes sense, actually. Interesting.

And then, I know some prior analysts asked, but I guess just thinking about the Solutions business, you expanded last year, I think it's 5 facilities, all in, if I'm correct, maybe it's 4. Do you have any expectations in 2018 to expand as well?

And what kind of triggers that, in your mind, for investment along the way?

Sure. I think most of those things are well thought out and opportunistic from our perspective in taking care of the customers.

At this particular point, we don't have any plans to add any additional locations. I think getting these up and running is important and beginning to implement DDMS.

One of our mantras is do a few things, do them well and then move on. And this would probably be the environment where that is, in fact, what we want to do.

Okay. And then just last question.

Just the tax rate you're expecting for 2018?

Yes. Our -- the effective tax rate that's embedded in our guidance is about 26% to 27%.

Operator, if there are no more questions, I'll close.

Okay. Well, thank you all for your time and ongoing interest in Douglas Dynamics.

We look forward to updating you on our first quarter 2018 results in early May. Thank you, all, and have a great day.