Good day, ladies and gentlemen, and welcome to the Douglas Dynamics' Fourth Quarter 2015 Earnings Conference Call. At this time all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to introduce your host for today's conference. Mr. Bob McCormick, Executive Vice President and Chief Financial Officer of Douglas Dynamics, sir you may begin.

Thank you. Welcome everyone and thank you for joining us on the call today. Two quick items before we begin. First, please note that some of the information that 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, 2014 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, and non-GAAP financial measures, which under SEC Regulation G, we are required to reconcile with GAAP. The reconciliation of this measure to the closest GAAP financial measure is included in today's earnings press release which is available at douglasdynamics.com. Joining me on the call today is Jim Janik, our Chairman, President and Chief Executive Officer. Jim will begin by providing an overview of our performance for the quarter and current industry trends. Then I will review our financial results before turning it back to Jim to discuss our outlook. Finally, we will open the call for your questions. Jim?

Thank you, Bob. Good morning and thank you for joining us. We are very pleased with our results for the fourth quarter. Especially this winter, got off to a very slow start in our core markets. The fact we were still able to produce a very strong fourth quarter indicates that near term pent up demand continued to unwind. Our results were driven by strong performance in both our core business in Henderson. Fourth quarter net sales were $118.8 million, which is 19% increase compared to the same period last year. We generated fourth quarter diluted EPS of $0.66 per share compared to $0.58 per share for the comparable quarter in the prior year. At the start of 2015, we certainly did not expect to produce another record year following a fantastic performance in 2014. However, we were able to just that because of the relentless determination of our team, the ongoing execution of DDMS. The acceptance of record number of new products introduced in 2015 and the continued release of pent up demand in the market. Our efforts were supported by external factors such as above average snowfall in certain core markets. In the winter season of October 14 to March, 2015. A stable economy and ongoing growth of light truck sales. Incredibly both our core business and Henderson built upon their record 2014 performance and separately produced record results again in 2015. I should note, that we just got back from the National Truck Equipment Association or NTEA Work Truck Show in Indianapolis last week. It was great to meet with so many of our dealers and our partners. In spite of low snowfall, we've seen this winter the people spoke to are still enthusiastic about the industry and especially our products. As you will remember, we launched…

Thanks, Jim. As you can see in our press release, our financial results significantly exceeded our initial expectation that we produce the second consecutive year of record results. For the fourth quarter 2015, net sales were $118.8 million representing a 19% increase over the same period last year. The increase reflect the addition of Henderson products and stronger than expected in season shipments of equipment service parts in the core business. Overall sales of snow and ice control equipment for the fourth quarter 2015 increased by 20% compared to the same quarter last year. Overall parts and accessories sales increased by 13% for the quarter ended December 31, 2015 compared to last year. For the fourth quarter 2015, cost of sales were $80.3 million or 68% of sales compared to $61.4 million or 61% of sales in the fourth quarter, 2014. The year-over-year increases was driven primarily by the addition of Henderson. SG&A cost were $12.9 million for the fourth quarter, 2015. They were just $400,000 higher than prior year. However, fourth quarter 2014 did include Henderson transaction cost of $1.8 million. We produced adjusted EBITDA of $27.8 million for the fourth quarter of 2015 compared to adjusted EBITDA of $29.6 million for the same period in 2014. Net income was $15.1 million or $0.66 per diluted share in the fourth quarter of 2015 compared to net income of $13 million or $0.58 per diluted share in the same period of 2014. As Jim mentioned, Henderson had a great first year as part of Douglas generating net sales of $96.1 million for 2015. These record results compare to revenue of $81.6 million in 2014. Henderson continues to see robust demand for its products and services and is continually building on its strengths to efficiently meet this demand. For the full…

Thanks, Bob. As we look to the future, we continue to see positive non-snowfall indicators in the market. Strong sales of light trucks, low gas prices and positive dealer sentiment, all bode well for our business. However, while winter isn't over yet. So far, we have seen substantially below average snowfall across North America. Winter storm Jonas was a significant weather event in January, but the season started very late and we haven't experienced a large number of significant plowable events in our core markets. And such, we do expect to see an impact during our pre-season period, which is just about to begin in April. We will know more as the second quarter unfolds and we will discuss in our earnings call in May. Following two consecutive years of record performance and extraordinary growth. The nature of our business and historical patterns indicate, it is unlikely we will produce a third record year in 2016. As always, we will focus on the factors within our control and believe, we are very well positioned for future success. Based on 2015 results, the overall economic climate, dealer sentiment, current snowfall outlook and the industry trends and manageable dealer inventories. We expect net sales for the full year 2016 to range between $310 million and $370 million in revenue. Producing adjusted EBITDA in the range of $55 million to $85 million. And EPS between $1.05 and $1.65 per share. As we noted in the release, our outlook includes an approximately $10 million related to the successful conclusion of a lawsuit, which equates $0.27 per diluted share. It should go without saying, but we consider our intellectual property a valuable asset which we will diligently defend. While we can't go into detail on this situation. I'm pleased to say, that an Appellate court…

[Operator Instructions] our first question comes from Josh Chan from Robert W Baird. Your line is now open.

I was wondering, if you could shed any insight on what channel inventory is like. I assume, it's a little bit higher based on probably the lower snowfall. But just wanted to hear from you on that and then also, you managed through a lot of these cycles in the past and how do dealers typically react to a year of lower snowfall like this. Do they make pre-season orders later or do they pick deliveries as late as possible? What's the typical pattern there?

Sure. Two questions, the first one that I'll answer is about inventory. For us, it is marginally higher, but I think from my perspective and from the dealers perspective very manageable. So it is, it won't have a huge impact on the business in 2016. The second question little bit lower snowfall, how do dealers order patterns change, that's all over the board and it really is based on geography. The areas, where it has snowed a little bit more. Those people tend to be a little bit more aggressive and the areas where it hasn't snowed as much, I think people tend to be a little bit more cautious. But I would state that, based on our field surveys and the NTEA, which I said we just returned from. I think in general, the distribution is cautiously optimistic. Which is from my perspective a very nice place for them to be?

Okay, great. And then, I wanted to switch over the Henderson. You mentioned as one of your strategic priority. Does your guidance in 2016 assumed continued growth from the record this year and is there a way you can size, kind of the runway or the opportunity that you see, whether in terms of share or margin potential there?

Sure. We certainly do expect Henderson's growth to continue into 2016, capitalized in its record 2015 results. But we're not going to go into that level of granularity in terms of providing Henderson's revenue forecast. But safe to say, that their growth platform is strong DDMS is allowing them to quote lead times, which the industry likes and all signs point to a very, very positive year for them and those growth projections while not shared at this point are reflected in our overall 2016 guidance.

Okay and then and lastly. You talked about exploring adjacent markets. Has the basket of opportunity sort of expanded for you, I guess in terms of what you're looking at and what markets and what types of products you're looking at, relative to I guess the past comments or have you kind of expanded the horizon in terms of the types of companies you're looking at?

Sure. I think from an M&A perspective or just a quick summary is that. I think the markets are still really pretty active and we're open to a lot of conversations. We have seen things slow down a little bit and as the credit markets tighten up compared to last summer fall, but we're seeing private deals. As we've been out in the market, I think more actively we have a number of private owners who had at least approached us to try and determine, if there's any fit for the two businesses. But overall little bit slower. I don't think, we're going in any different directions than we've gone in the past.

Okay, great. Thanks for the color and good luck, next year.

Our next question comes from Les Sulewski from Sidoti and Company. Your line is now open.

Hi, can you comment a little bit more on the new products. What kind of activity you're seeing there and then also, maybe some feedback you're getting on specifically on the spreaders and versus what you're seeing a year ago?

Sure, this time of year. Most companies within our industry will have a couple of newer refresh products, as we were at the NTEA last week, that's typically when people will introduce their new products. I would suspect that, Douglas has probably between four and eight new products most of our competition was probably half of that. And I think, this year industry-wise, the products are pretty much incremental except for perhaps the SnowEx V-plow [ph] which we just introduced this year. I think that will be a significant new introduction. So yes, I think this is a year where there are new products but there isn't anything other than the SnowEx V-plow [ph] industry-wise that is, that I think is going to have a significant impact on the industry.

Got it, thank you. As far as Henderson goes, were there any somewhat notable contracts during 2015 or is there anything you would announce as far as that business type goes?

Can you repeat that, I'm not entirely sure that I understood the question?

Sure. Yes, just wanted to get an idea of any notable contracts that you won with Henderson's since your acquisition and if not perhaps, is there something that you would announce for us to moving forward?

Yes, I don't think it's going to be our practice to announce which contracts we get for competitive reasons. If anything, if something really significant occurs. I may say, we've gotten a new contract but I won't give you the details as to who it is because all of these contracts are very, very competitive and we're not entirely sure we want the world to know.

Got it, fair enough. Going to backtrack a little bit, as far as the pent up demand you talked about unwinding. Is there a see through to what visibility you have or how much - how many quarters we have left to that or from any, perhaps pre-seasons, if you will?

Sure. That level of granularity is a little bit challenging to provide you and let me explain the reasoning for that. I believe that pent up demand still exists, but how and when it unwinds is impacted by snowfall. And frankly pent up demand act sort of as a multiplier when we have average or above average snow. And it also, it impacts us in low snowfall seasons. But the impact is definitely reduced. So, it's a little situational. But we still believe there is some out there. But it is more likely in an average or above average snow year that will be obvious.

Thank you. I guess one more, I'll jump back in the queue. As far as competitive pressure goes and some I guess, specifically a number two player there. Are you seeing any kind of increased pricing pressure on specifically on the landscaping product dealers? Thanks.

We are not at this particular point. We really haven't seen anything. Not just from our major competitors but all competitors from time-to-time. They will run programs in certain geographies that have limited time, limited scope to see if they can wiggle up a needle. In general, when those occur they're very, they're limited and thus far ones that we've seen have really had much impact.

Got it. Thank you.

And our next question comes from Paul [indiscernible] from Go Shop [ph] Global Investments. Your line is now open.

I guess, you mentioned 13% rise in ports and accessories. I wondered if you wanted to give any color commentary on that.

Nothing more than part of that is the addition of Henderson. Henderson does have parts and accessories revenue a little bit less of percentage of their sales than the core business. So part of that growth is adding Henderson in 2015 versus not having their income statement results in 2014. And the core business continued to have strong parts and accessories revenue all year long.

Okay, great. Thanks very much.

You're welcome.

[Operator Instructions] and I'm showing no further questions at this time. I would like to turn the call back over to Mr. Jim Janik for closing remarks.

Thank you, operator. And thank all of you for your interest in Douglas Dynamics and we look forward to speaking with you about our first quarter 2016 results in May. Have a great day.

Ladies and gentlemen. Thank you for your participation in today's conference. This does conclude the program. You may all disconnect. Everyone have a great day.