The successful conclusion of a patent infringement lawsuit pulled earnings higher for Milwaukee-based Douglas Dynamics, Inc., but a lack of snowfall hampered sales for the first quarter of 2016.
The maker of snowplows and other vehicle attachments recorded a $10 million gain during the quarter after an appellate court ruled in its favor in a patent infringement lawsuit against Buyers Products Company, owner of the SnowDogg line of products.
The gain allowed the company to report net income of $5.3 million for the quarter, up from $383,000 last year. It increased earnings by 27 cents per diluted share. The company reported earnings of 23 cents per diluted share, up from 1 cent last year.
“After our employees and dealers, we consider our intellectual property our most valuable asset and one which we will diligently defend,” said James Janik, Douglas chairman, president and chief executive officer.
However, a lack of snowfall hampered the company’s performance during the quarter and revenue was down 9.5 percent to $48.8 million.
“As always, when we experience significantly below average snowfall we implement our low snowfall playbook,” Janik said. “We have already reduced or postponed discretionary spending plans and are focusing on improvements that will directly increase service levels and quality for our customers, while improving commercial snow and ice profitability.”
He said the initiatives would enhance the company’s competitive position and be especially helpful when snowfall returns to normal levels.
Janik also said the quarter demonstrated the importance of acquiring Iowa-based Henderson Products, Inc. in 2014. The business is less weather dependent with income and revenue spread more evenly throughout the year.
“While the weather trends across North America this past winter impacted our commercial snow and ice products, non-snowfall indicators remain positive, including ongoing strength in light truck sales, relatively low gas prices and positive dealer sentiment,” Janik said.
