Good day, ladies and gentlemen. And welcome to the Douglas Dynamics’ Fourth Quarter 2013 Earnings Conference. At this time, all participants are in a listen-only mode. Later, we’ll have a question-and-answer session, and instructions will follow at that time. (Operator instructions) I would now like to introduce your host for today’s conference, Mr. Robert McCormick. Sir, you may begin.

Hello, everyone. And thank you for joining us on the call today. Two quick items as 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, 2012, filed with the Securities and Exchange Commission and the updates to these sections in our subsequently filed quarterly reports 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 are required to reconcile with GAAP. The reconciliation of these measures to the closest GAAP financial measure is included in today’s earnings press release. Joining me on the call this morning is Jim Janik, President and Chief Executive Officer. With these formalities out of the way, I would like to turn the call over to Jim.

Good morning, and thank you for joining us on today’s call to discuss our 2013 performance. I’m going to begin by providing an overview of our results, and then Bob will provide a detailed review of our financials. Finally, I will return to discuss current trends and provide additional details on our outlook for 2014. Before I discuss fourth quarter results, I would like to take a moment to recognize Mike Wickham who will retire as Non-Executive Chairman of the Board, when his term ends at the upcoming annual shareholder meeting. Mike has played an essential role in our successful corporate evolution over the last decade including shepherding the company through our transition from a private to public company, as well as multiple important acquisitions and strategic changes. His decade of dedicated service positively impacted the company in many ways, and his Sage Counsel will definitely be missed. In conjunction with this change, the board also appointed Jim Staley as Lead Independent Director and Jim is the perfect candidate for the role given his wealth knowledge as former CEO in the transportation services industry. He has already provided us with excellent advice in his four-year tenure on the board. And of course, I’m honored that I’ve been elected as chairman. I know I have big shoes to fill following Mike. I look forward to working with Jim and my fellow board members and wish Mike all the best. Turning back to our results, I’m pleased to report record fourth quarter revenue of $73 million, an increase of 159% compared to $28.2 million in the prior year. Full-year revenue for 2013 was $194.3 million compared to $140 million in the prior year. Record fourth quarter revenue in solid 2013 full-year results reflect more favorable business conditions compared to the past two…

Thanks Jim. For the fourth quarter of 2013, Douglas Dynamic generated a record sales of $73 million compared to $28.2 million in the fourth quarter of 2012, an increase of 158.9% year-over-year. Shipments of equipment units and Parts and Accessories sales increased 148.5% to 157.3% respectively. As Jim mentioned, the increase in unit volume for both segments was driven primarily by heavy snowfall across core markets during the quarter plus the addition of the TrynEx products. Cost of sales was $45.6 million or 62.4% of sales for the fourth quarter compared to $20.7 million or 73.3% of sales in the fourth quarter of 2012. This year-over-year increase was driven primarily by higher unit volume. SG&A expenses of $9.1 million for the quarter were $4.6 million higher than the prior year. The increase was driven largely by the increase in volume namely in the areas of incentive plans and advertising. Additional, Q4 SG&A included the ongoing quarterly expenses incurred in connection with the TrynEx assets totaling $1.2 million which worked hard of the business last year. Fourth quarter of 2013 adjusted EBITDA was $19.8 million compared to prior adjusted EBITDA of $4.2 million. Net income in the fourth quarter of 2013 was $8.5 million compared to prior year net loss of $1 million. Earnings per share was $0.38 cents per diluted share during in the fourth quarter of 2013 compared to a loss per share of $0.05 cents per diluted share in the prior year. Turning to TrynEx, in our Q2 range call we provided the following TrynEx out load for May to December 2013. Net sales $12 million to $14 million, adjusted EBITDA of $1 million to $1.75 million and net loss per share of $0.08 cents to $0.12 cents. We are please to confirm that TrynEx performance fell within…

Thanks Bob. To close, I’d like to share our thoughts on current market conditions, what we’re seeing in the first quarter to date and some thoughts on what we’re expecting for 2014. Overall, we’re enthused by sustained strong snowfall levels across many of our core markets and not really part of our physical quarter. While the snow season is not over yet, current snowfall level nationally are 30% to 40$ above average thus far. Following the terrible market conditions we saw in 2012, the solid results for 2013 marked an important step in our two-year return to normal business conditions. Our strategy in 2014 will be to continue to focus on ongoing operational execution of our business and executing our core strategies to position us for sustainable profitable growth while at the same time enhancing long-term shareholder value. We remain committed to driving our margin performance through ongoing approach to win and prevents initiatives to take cost out of the business as well as expanding our service capabilities to customers. Along the strong snowfall levels across the core markets in early 2014, we’re excited by positive by non-snowfall indicators within our business. The expansion of our product portfolio and the addition of TrynEx products coincide well with positive indicators as our most recent field inventory results. Results from the recent report indicate that we’re continuing to see improving sediment among dealers namely lower dealer inventory levels and strong retail reorder activity. More specifically, our January field inventory assessment indicated that distributor inventories on January 30 were down double digits year-over-year and retail reorder sales from November through January were all substantial year-over-year. Another positive indicators continued positive momentum and selective pickup truck sales. Collectively, these non-snowfall indicators underscore improving optimism with the industry suggesting the potential for the gradual release…

(Operator instructions) Our first question comes from the line of Robert Kosowsky of Sidoti. Your line is open. Robert Kosowsky – Sidoti & Company: Hi, good morning, guys and congratulations Jim.

Thank you, Rob.

Hi, Rob. Robert Kosowsky – Sidoti & Company: Yes. First question is on the SG&A increase probably seem like you’re eluded to the fact that there is largely incentive compensation, so if it there wasn’t robust in a year or next year you should see a decline in SG&A, is that correct?

Well, yes, the view – that’s one of the high flex points. You also have to take into mind here that in the fourth quarter of 2012 we were ramping down variable compensation expense because the year was softening quite quickly for us, so you really kind of have it on both end – you have an abnormally low 2012 incentive plan expense in the quarter and you have a little higher than normal in 2013. Robert Kosowsky – Sidoti & Company: That makes sense. And then just a quick question on the dividend, did you – you had a little extra cash this year, was any thought on paying out of special dividends versus just kind of paying just the revolver and sustaining on the revolver just the vehicle for having more financial flexibility if there are deal that comes on the horizon by the way I’m looking at it?

Yes. I think so. When we’re – part of the reason that we use the short-term dead vehicle to make the TrynEx acquisition was number one it was the lowest interest rate vehicle that we had available to us. But number two, we had plans on really paying that off as soon as practical although we could keep that revolver power dry and that just helps – it helps to give us flexibility as we look at making additional acquisitions as we move in to 2014. I think we’re pretty fair – thrilled to buy a company for $26 million in May and have that entire debt paid off before we reach the one year point of that – of that acquisition.

Okay. Let’s get in the – in the TrynEx margin profile you talked about trying to get the PLOW’s margin, is that still doable and can you say what are the productivity improvement you did and whether or not there are other opportunities like that you see in your manufacturing footprint? Sure. I think – Douglas margins are – Douglas core business margins are very, very strong as you know. I think now that we’ve had a chance to really take a deep dive into the TrynEx business, I do believe that we see the opportunity for their spreader margins to get close to Douglas’ spreader margins overtime. I would suggest it’s probably a two to three-year preposition. Having said that, the one example Jim gave of the kaizen event that we ran in their plan was just one of four kaizen events that we did in the fall. We’ve already done a couple of kaizen events in 2014 thus far. We’ve got 10 scheduled for the entire year 2014 and those were all generated very, very positive results. When you combine that with our global searching capabilities, we owned a vehicle to do some nice things there but I think it’s a – it’s a two to three-year plan , Rob, close to normalize Douglas margins. It will happen though. Robert Kosowsky – Sidoti & Company: Okay. Thank you very much and good luck.

Thanks, Rob.

Thank you. Our next question comes from Josh Chan of Baird. Your line is open. Josh Chan – Robert W. Baird & Company, Inc.: Good morning, Jim and Bob. Congrats on the quarter.

Thank you. Josh Chan – Robert W. Baird & Company, Inc.: I guess I am wondering about the guidelines for 2014 in terms of the very low and the very high ends and whether you could elaborate what assumptions would lead to each of those results in particular?

Well, you know, I think anytime that we put this initial range guidance together which obviously is fairly wide here, you’re really looking at two different things – you’ve got the balance of the snow season. The month of March still has the play out here so we need to see what that brings us, but you’ve also got the start of next year snow season which begins in the fourth quarter. And so, when you look at 2012 the results has an example and you see just how poor it can potentially be. That’s what drives the low end of the range. If you look at a very strong start to next fall snow season that would then drive the very high end of the range, it really that you do have that kind of variability driven largely by what happens next fall. I might – I might also comment here is that as we’ve done in the past, we get a pretty wide range early in the year and one of the things that does for you as well is indicates that above that range and below that range are pretty much unlikely. So, given some very, very unusual circumstances, you know the lowest and probably the highest as well, so at this particular point, we’re confident in giving up pretty wide range and feeling good that it’s within that range. Josh Chan – Robert W. Baird & Company, Inc.: Okay. Right. Appreciate the difficulty in providing a tight range because of the dependent of the snowfall so that doesn’t make a lot of sense. I want to ask you about the inventory levels, you said that the dealers were done double digits. I was wondering if you could put more color around that in terms of either bleed times or rush delivery or regions of the country, any more color you can add in terms of the inventory?

Sure. We don’t – we don’t give specific inventory numbers but I will say that dealer inventory in January was at very positive levels and for that means very low inventory. That also indicates that sell through is very strong. That also means that that was what drove really third quarter and we saw that – or fourth quarter and we saw that continue into the January period. So, in general what that would indicate to you is certainly reflected in our guideline. It should create a positive environment for our business and the distribution going forward. I think where the snow fell – so far, it’s been a terrific snow year and what makes it unusual – more unusual than just a lot of snow fall is that it fell consistently each month throughout the winter season. Usually, it’s more lumpy than that and this year we had very, very good snow fall each of the months and it’s been cold enough that it didn’t melt. So, people had to look at it and move it multiple times throughout the winter. So, from our perspective it is the type of snowfall that is very favorable for our business. The only area that didn’t get what I would consider to be average or above average would probably be some of your Western States; Colorado, Utah and a couple of spots in Canada interestingly enough have gotten slightly below or below average snowfall. But for the most part, all of the major cities I think have a lot of very good snow. Josh Chan – Robert W. Baird & Company, Inc.: And then the last question, given your intention to pay down the TrynEx debt and working capital needs at the beginning of the year, is it reasonable to think that that probably won’t be an acquisition for much of 2014, is that the right way to think about it?

You know, we – I don’t think – I don’t think you can make that kind of conclusion at this point Josh. We’ll be back to a zero draw on the revolver from acquisition. We will start to use the revolver for working capital purposes but always have a little bit of cushion there just in case another opportunity comes along. We continue to look. We are –diligent in that process and as you know we don’t necessarily get the call to shots in terms of timing. Josh Chan – Robert W. Baird & Company, Inc.: Okay, great. All right. Thank you for your time. Congrats again in the quarter.

Thanks, Josh.

Our next question come from the line of Jason Ursaner of CJS Securities. Your line is open. Jason Ursaner – CJS Securities: Good morning. Congrats on a great finish to the year. Just first thing that’s kind of surprising about the revenue and the quarter, obviously, there are a lot of factors that were put in the right direction but the weather haven’t really snowed a whole let in during the quarter so the reorder activity you sought, how much of that was just more driven by low inventory levels entering the season versus the actual weather tranch [ph]?

Yes. That’s a great question. I think that it’s a combination of factors, Jason, and it’s difficult to indicate which one had the greatest impact. I will say if you go back a couple of quarters what I was saying even then was the conditions for the marketplace were such that based on distributor inventory, cautiousness about ordering that if we got some decent snow in the fourth quarter there was the potential for a pretty decent fourth quarter so what we really saw was snow that was certainly better than average and it started early. And I – and I think the reaction was as it always occurs when the snow starts early that it is always best for our industry because flowers and distributors understand that it’s going to be a long season or at least it’s the psychological feeling. And as it continued to snow in November and December, it only exaggerated the impact of low deal inventories. And interestingly, while we don’t get granularity getting into next year, dealer inventories are probably lower than they were last January. So, it’s a positive position for us to be in but I can’t tell you what specifically causes it. I think it’s a combination of factors. The other thing is, just given how off normal levels 2012’s performance was, and 2013 looking much better, all of our annual bonus incentive plan accruals this year are going to be much stronger than they were a year ago. So that’s something I would expect – I would expect both of those working capital favorability is the whole – as the fourth quarter progresses. Jason Ursaner – CJS Securities: Okay. And you mentioned that January field inventory down double digits. Last winter there were two particularly late storms that help get your inventory down quite a bit at the end of the season and you have some idea for when inventory levels will end out and whether the order activity that you saw – the reorder activity in November, December, does that fulfill it kind of at the end of season where maybe there isn’t this gap to the end as you’re looking towards the preseason?

Yes. I think from our perspective our perception will be that field inventories will be quite low. I, again, don’t know the exact amount because again our next field inventory that we take is at the end of May. And as a result, our belief in talking to distributors is that they believe their inventories are low considering the kind of demand that has been taking place and therefore we’re anticipating some pretty strong preseason orders. Jason Ursaner – CJS Securities: Okay. And there’s some indication – maybe the psychological would see dealers ordering to a higher starting inventory level, is that one of the impacts possibly? It wasn’t just the ending inventory based – it seemed like dealers are reducing or starting?

That’s always – the history of this business Jason is that about every three or four years there’s a new normal and after three or four years of low retail activity distributors by nature really take a wait and see approach and I believe that for many distributors who really worked hard to get inventory in once the season took off will find that they will be a little bit more aggressive in their preseason ordering positions because they have a pretty sense of how hard the product’s been used and what the replacement cycle is for their customers. Jason Ursaner – CJS Securities: Okay. And then just the initial revenue range for next year, obviously, it’s wide to account for snowfall variability but even at the low end it was pretty strong – strongly above prior years guidelines and it’s not simple adding 20 million or so for TrynEx. So, last year looks like there’s almost an extra 20 million of revenue in there, is that the right way to be thinking about it and is that all you want or that get spread over the preseason as well?

I think – I think you’re – the way you’re splitting the numbers has some logic to it. Keep in mind, Q1, you can’t get too far over your Qs because Q1 is typically a very soft quarter for us because dealers are no longer order inventory as they line down retail inventories. But having said that, 70% of the snowfall many given year falls after January 1, you have to do is take a look outside at your window to know that it’s been a strong first quarter from a – from a snow perspective, so we would expect first quarter results to reflect that and probably fill in part of that gap that you’re – that you’re talking about. We would – we would expect the preseason orders to be better as well and quite frankly we’re anxious to see where dealers want to take their inventories so that we can know the guidelines in August and we’ll have a much better feel from where these things going to shake up. Jason Ursaner – CJS Securities: Okay. And just last question, you mentioned for TrynEx on the margin side, if for the core of this business, how large are variants are there between plows [ph] and spreaders?

But, you know, I don’t – I don’t have that information with me right off the chart [ph], Jason. Jason Ursaner – CJS Securities: Okay. I appreciate all the commentary. Thanks, thanks.

Thank you.

(Operator instructions) Our next question is a follow up question from Robert Kosowsky of Sidoti. Your line is open, sir. Robert Kosowsky – Sidoti & Company: Hey, guys. Just one last question on the gross margin. If I look at 4Q ‘11, which is the last good snow December quarter, we had about a 33% gross margin and that is about 38% in 4Q13 and I’m just wondering if you can bridge those two data points with a basis of just operating leverage. Is there anything else going on there? Just to get a better…

I would say without getting deep in to a – to a numbers analysis, we continue to improve profit per unit, you know is an important objective for us, so when you look at the two years that have passed from 2011 to 2013, there’s no question that base unit profitability improves and that that is the driver of that for sure. Secondly, when you get a look at the K [ph] when that comes out later on today, you will see that Parts and Accessories revenues were very, very strong in the fourth quarter – pretty strong in the fourth quarter of 2011 as well but anytime those are high, those carry just a little bit higher margin percentage if you will so that mix is going to have a favorable impact as well Rob. Robert Kosowsky – Sidoti & Company: Okay. Thank you.

Thank you.

And our question comes from the line of Kevin Leary of Spitfire Capital. Your line is open. Kevin Leary – Spitfire Capital: Hi, good morning.

Hi, Kevin Kevin Leary – Spitfire Capital: First question on 2013, I don’t know if you disclose yet but how many unit shipments were there of snow control – snow and ice control equipment?

Yes. We don’t have that information on this call but that will be – that will be in the 10-K that’s going to come out later on today, Kevin. Kevin Leary – Spitfire Capital: Okay, are we going to be able to breakout the units between Legacy PLOW and TrynEx from the data (inaudible)?

No. Kevin Leary – Spitfire Capital: Okay. How should we all think that in terms of you know – from about five-year average and ten-year average shipments in the past? What’s the good way to think about number of unit shipment happening in TrynEx in a given year?

Boy, I think – I think when we look at TrynEx, what we told people so far is that it’s about a $20 million revenue business when we – when we purchased it and it’s basically it’s a spreader business along with some Parts and Accessories revenue. I would think that unit shipments on that business are between 8,000 and 10,000 units probably a year. Kevin Leary – Spitfire Capital: Okay, that’s helpful. And then second question. Just with respect to guidance and kind of the two-year return to normal shipments, how should we be thinking about normal? Is that kind of a 10-year average just kind of 50,000 level that you’re thinking about as “normal year?”

Yes. That’s the – if you go back and look at the five and 10-year averages it’s – it was around 52 or so given what’s happened with the economic downturn starting in 2008. We’ve revised that in our minds between 48 and 50, so we think that’s more normal range these days. Kevin Leary – Spitfire Capital: Got it. That’s helpful. And then lastly, so preseason is kind of 2Q, 3Q if I remember correctly, when do you how – is the reason that you take an inventory in May to sort of gauge demand for the rest of the preseason or when do you know what the preseason is shaping up as it just happen as you go through the summer?

We typically we’ll know by about the middle of June what – how preseason has finished. It goes from – really the active order writing period goes from the 1st of April through about the middle of June. I’d like to say that we, we generally know earlier than the middle of June but we find a lot of our distributors – our larger distributors really wait until that last week or two so we don’t really have all the orders in until that point, so it really about the middle of June. The months that we take inventory, there’s nothing magical about May, actually it gives us an opportunity to take a look at about where people are starting the season and the other times of the year I think have some historical significant how you’re ending up a year, how you’re beginning a year – yes, we do take it four times a year but the May 1 is to really give ourselves the temperature of what’s going on in the marketplace. Kevin Leary – Spitfire Capital: Okay. Okay, got it. Thanks for taking my questions.

Thanks Kevin. Thanks. Josh Chan – Robert W. Baird & Company, Inc.: And our final question comes from the line of Jim Lacore [ph] of Oppenheimer. Your line is open.

Good morning, gentlemen and congratulations.

Thanks, Jim.

Thanks, Jim.

Trying to get a beat on 1Q, I know you don’t give quarterly guidance, but we did a bunch of call arounds in our channel check suggested to us or we came away thinking that 1Q is particularly strong just go around and I’m just trying to marry that with your comments to an earlier question on just the timing of your deliveries versus distributor actually selling a PLOW because, again, our sense was that January and February with such a heavy snowfall, they couldn’t get enough PLOWs to satisfied demand and this seems to be a little bit of a disconnect fully appreciating that it’s your seasonally softest quarter. I’m just struggling with this as far as how you envision the timing of your sales in the first three quarters knowing that 4Q is just up for grabs relative to the snowfall that’s going to happen in November and December? And you know color that you can provide is greatly appreciated.

I think Jim, your channel checks are obviously some of the same feedback we get as well. The trick here is how much of that strong demand through our dealers are they going to replenish during Q1 and how much that are they going to replenish during their preseason order period, and I think what we would suggest is that you’re going to see a stronger than normal Q1 just because of the heavy snowfall and you will likely see – we hope we see a stronger reorder period during the preseason order to put our products back on the shelf. So, I think that optimism that you sense is real. It’s likely to be split between the first quarter and the preseason order period probably with most of the whole good portion of that coming in preseason whereas Parts and Accessories would be stronger during the first quarter just because of snowfall.

Okay, that’s helpful. And anything that you can tell us on pricing for the year, what your expectations are for 2014 from a price class perspective?

Sure. We certainly anticipate taking a price increase but we don’t make that decision until May and don’t signal that prior to the – coming out.

Yes. I can tell you from a cost perspective we’re not seeing anything alarming in any of our key raw material components at this point.

Thank you, guys.

Sure. Thank you.

And I’m not showing any further questions in the cue at this time. I’d like to turn the program back to Jim Janik for closing remarks.

Thank you for your interest in Douglas Dynamics. We look forward to speaking with you about our first quarter 2014 results in May. Have a great day.

Ladies and gentlemen, thank you for participating in today’s conference. This does conclude this program and you may all disconnect. Have a wonderful day.