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Douglas Dynamics CEO James Janik discusses how the winter storm hitting the Northeast will impact quarterly numbers.
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The one business that's just dying for the snow storm as a massive blizzard moved up the northeast and many company shut down.
We've got that one company that's so excited they've been praying for snow they are the leading.
Publicly traded company maker of snowplows that -- on two tracks the CEO and president James -- Joining me now in -- Fox Business exclusive.
Douglas' the company and at tell me first James first saw welcome to the show here.
It roughly Scottsdale Arizona -- don't know what to be developed that ridiculous picture welcome -- about what the last.
A couple of days as soon as this storm really hit the radar what -- -- these days been like for you as that snow -- mountain company.
Sure.
There's an awful lot of preparation for the storm.
Most of our dealers are becoming prepared for.
All sorts of eventuality is but but clearly they want to be prepared for.
Anything that might come up.
Particularly.
On parts service parts and accessories.
And making sure that they can keep the -- -- on the road during the storm well the one.
Thing if you compare to what happened last year where we had -- usually light if any snow falling there was one measly storm here on the East Coast at least in New York.
That really hurt you guys mean you had to system really -- down estimates for Q4 and full year 2012.
Does this change the picture cat one storm change your numbers.
The storm by itself -- Doesn't necessarily change the numbers I think we take go -- statistical look at the whole year from October through.
March and and that will really determine.
The following year and how we do.
Having said that absolutely.
A storm of this magnitude -- does terrific job.
Not only for sales but I think the psyche of people who make money from plowing and with snow.
I think becomes much more positive.
Look we're looking at -- dirtier lowered EPS guidance but but I'm I'm talking about say for example here's -- leader when it comes to these names like blizzard -- Fisher engineering western products you you market under those names -- -- -- has gone to the front of truck so I would imagine that's begin in say apartment complexes malls.
Developers.
Contractors.
-- -- your basic client or do you have one.
Yeah will we sell through dealers we saw nothing nothing direct through 720 dealers worldwide.
But the end user is primarily the largest group is people who -- for a living.
Their contractors.
There -- snowplow.
Landscape contractors who in the summer might might do something at your yard and then -- for you in the winter.
That is the largest segment of our business.
Your sales though it correct me if I'm wrong are driven very much in part by in need to replace after 15 to seven years.
That I look at what we've seen with all durable goods -- -- products that last more than three to five years.
People have stretched it because of a weaker economy -- hope that something will last a little bit longer -- -- products are strong but what's the replacement cycle look at work.
Well the -- the replacement cycle for us is that it averages about seven to ten years.
The replacement cycle of course gets delayed because of the low snowfall last year true and frankly the first part of this year.
But the storms like this will help people get on a much more normal replacement cycle.
But but yes the more it snows more of the product -- use the markets use the faster it's replaced.
-- A lot of cities and and municipalities have gone to other types of beef from California it's a little hard for beat I agree that the word -- -- -- different stand for example.
Which one causes the most erosion for your products.
Well I I I think Syria are assault by itself is is.
Them you know the most caustic to into the landscapes into two concrete.
I think that's probably -- the the more difficult but frankly it's one of the areas that creates the most safety for passengers.
Who -- on the roads -- and other places so.
You know it's a double edged sword.
Is there any way that you can make a snowplow that as a 'cause by doesn't push all the snow.
To the edge of my driveway so I have a mountain but it could go through it but.
But yeah well I.
I think you could pay the people in the city to not do that in front of your driveway Clinton but everyone else has to suffer through that.
Yeah I know I know that this is a tough business though especially when we have had such light snowfall in the past.
How do you anticipate how do you hedge you have to buy a lot of metal because that's what your products are made -- but what does your toughest to operate now.
Yeah I think I think what we've always focused on loses to manage the things we can't control understanding and -- business like cars that.
Every other year could be a weather driven recession so we make sure that our our fixed costs are very low -- our variable cost are quite high.
And as a result we can ramp up and down very very quickly and and as a result they think.
You know with with the fifty year record low snow fall last year I think we turned in some very nice financial results and cash flow results which frankly.
I think -- -- people.
-- and a dividend of nearly 6%.
Yes.
That's impressive people people certainly liked that that alone is is attractive for the ticker symbol -- perfect I love that PL OW.
The market cap is small 307 million dollars we do want to always point that out because sometimes the -- The swings can get a little more dramatic but it's nice to see -- thank you Jim for getting in the chair -- in lovely warm.
Scottsdale.
Good -- but but but yeah we -- the New York thanks so much.
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