Core Insights - Twin Disc, Incorporated (TWIN) shares have increased by 6.2% since the fiscal third quarter results, outperforming the S&P 500 index which rose by 0.6% during the same period [1] - The company reported a net loss of 11 cents per share in the fiscal third quarter, compared to a net income of 27 cents per share in the previous year [2] - Net sales increased by 9.5% year-over-year to $81.2 million, driven by the Marine and Propulsion Systems and Industrial segments, along with contributions from recent acquisitions [2] - Despite revenue growth, profitability declined sharply with a net loss of $1.5 million compared to a net income of $3.8 million a year ago [3] - EBITDA fell by 42.7% to $4 million from $7 million, attributed to lower operating income, foreign currency losses, and higher pension-related amortization [3] Financial Performance - Gross profit rose to $21.7 million from $20.9 million, but gross margin decreased by approximately 150 basis points to 26.7% due to an unfavorable product mix [4] - Operating income dropped to $2 million from $3.6 million, impacted by a 13.2% increase in marketing, engineering, and administrative expenses [4] - The six-month order backlog increased to $133.7 million from $124 million, indicating stable demand across product categories [6] Regional and Segment Performance - Europe captured a larger share of revenue aided by the Katsa acquisition, while North America saw strong demand in the Marine and Propulsion segment [5] - Industrial sales surged by 56.2% to $9.7 million, while Land-Based Transmissions declined by 6.9% to $17.8 million [5] Management Insights - The CEO emphasized sequential margin improvement and strength in core marine markets, particularly in North America and Europe [7] - The CFO highlighted positive operating cash flow of $7.5 million and disciplined cost control efforts, despite foreign exchange volatility impacting earnings [8] Strategic Developments - Twin Disc completed the acquisition of Kobelt, aligning with its strategic goals to strengthen its industrial and marine technology portfolio [11] - The company's capital allocation strategy focuses on bolt-on acquisitions, debt reduction, and dividends, returning $1.7 million to shareholders during the quarter [11]

Company Overview - Twin Disc, Inc. designs, manufactures, and sells marine and heavy-duty off-highway power transmission equipment [2] - The product range includes marine transmissions, azimuth drives, surface drives, propellers, boat management systems, power-shift transmissions, hydraulic torque converters, power take-offs, industrial clutches, and control systems [2] - The company serves customers in pleasure craft, commercial and military marine markets, as well as energy and natural resources, government, and industrial markets [2] - Sales are conducted through a direct sales force and a distributor network, targeting both domestic and foreign customers [2] Recent Developments - Twin Disc's CEO John Batten and CFO Jeff Knutson will attend the D. Boral Inaugural Global Conference on May 14 in New York City [1] - Executives from Twin Disc will be available for one-on-one meetings with registered investors during the conference [1]

Financial Data and Key Metrics Changes - The company reported sales of $81.2 million, an increase of approximately 10% compared to the prior period, with strong gross margins reaching 26.7% [5][16] - On an organic basis, revenue increased by 1.7%, driven by continued strength in the Veth product line, despite softened oil and gas shipments to China [5][6] - The net loss attributable to the company for the quarter was $1.5 million, or a loss of $0.11 per diluted share, compared to net income of $3.8 million, or $0.27 per diluted share in the prior year [16][17] - Gross profit margin improved sequentially from 24.1% to 26.7%, reflecting enhanced operational efficiencies and an improved product mix [17] Business Line Data and Key Metrics Changes - The Marine and Propulsion segment saw sales increase by 10.7%, largely due to acquisitions and robust demand in commercial marine and luxury yacht markets [8][10] - The Industrial segment showed stable performance, supported by positive contributions from recent acquisitions, with a backlog strengthening to approximately $134 million [11][12] - The land-based transmission business remained strong, driven by demand in the airport and firefighting markets [10] Market Data and Key Metrics Changes - Geographic sales growth was notable in European markets, benefiting from recent acquisitions and continued strength in marine-related projects [17] - The company noted stable volumes in China, although tariff uncertainties have led to a more measured pace in new build activity [11] Company Strategy and Development Direction - The company continues to execute its long-term strategy of global footprint optimization, operational excellence, and strategic acquisitions [13] - Recent acquisitions of Katsa and Cobalt are aimed at expanding engineering capabilities and enhancing market reach [13] - The company is strategically positioned to capitalize on growing customer interest in electrification and hybrid propulsion systems [10][13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term growth trajectory, supported by a robust backlog and disciplined capital allocation [20] - The company remains vigilant in managing potential tariff impacts and global market uncertainties, leveraging operational flexibility [20] - Management anticipates continued positive margin trends driven by product mix and ongoing operational improvements [18] Other Important Information - The company estimates approximately $500,000 of tariff-related impact for the upcoming fourth quarter, representing roughly 1% of the cost of goods sold [7] - The company is actively evaluating alternative sourcing options to limit potential exposure to tariffs [7] Q&A Session Summary Question: Order patterns and backlog stability - Management noted that there have been no significant cancellations in marine orders, with order rates showing a strengthening trend [26][27] - The backlog was reported to be stable, with expectations of increasing orders in North America and Europe, particularly for patrol boats and military applications [27][28] Question: Mitigating circumstances around pricing and tariffs - Management indicated proactive measures regarding pricing and sourcing strategies to mitigate tariff impacts, with expectations of minimal impact on Q4 margins [30][31] Question: Insights on CoBelt acquisition - Management expressed optimism about replicating the success of previous acquisitions, with significant growth potential identified in CoBelt's product offerings [33][34] Question: Enhanced operational efficiencies - Management highlighted efforts in improving assembly processes and sourcing strategies to drive profitability, particularly for high-demand products [39][40]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 Form 10-Q ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarter ended March 28, 2025 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 1-7635 TWIN DISC, INCORPORATED (Exact name of registrant as specified in its charter) (State or other jurisdiction of (I.R.S. Employer Incorporation or organization) Identification No.) Wis ...

Financial Performance - Sales for the fiscal 2025 third quarter increased 9.5% year-over-year to $81.2 million, driven by the addition of Katsa Oy and Kobelt, along with strength in the Marine and Propulsion Systems and Industrial product segments [5]. - Gross profit increased 3.8% to $21.7 million, while gross margin decreased approximately 150 basis points to 26.7% due to an unfavorable product mix [7]. - Net loss attributable to Twin Disc was ($1.5) million, or ($0.11) per diluted share, compared to net income of $3.8 million, or $0.27 per diluted share, for the same quarter last year [10]. - EBITDA for the third quarter was $4.0 million, down 42.7% compared to the third quarter of fiscal 2024 [10]. - Organic net sales for the quarter ended March 28, 2025, were $75,430 thousand, a slight increase from $74,161 thousand in the same quarter of 2024 [26]. Order Backlog and Market Activity - The six-month backlog of orders increased to approximately $133.7 million, compared to $124.0 million at the end of the second quarter [11]. - The company reported a healthy six-month backlog supported by strong ongoing order activity across key markets [9]. - Strong order activity for Veth continues to be driven by demand in the luxury yacht and riverboat vessels [3]. Expenses and Cash Flow - Marketing, engineering, and administrative expenses increased by $2.3 million, or 13.2%, to $19.4 million, primarily due to the addition of Katsa and Kobelt [8]. - Cash provided by operating activities for the three quarters ended March 28, 2025, was $7,531 thousand, down from $22,273 thousand for the same period in 2024 [30]. - The company incurred depreciation and amortization expenses of $10,194 thousand for the three quarters ended March 28, 2025, compared to $7,497 thousand for the same period in 2024 [30]. - Cash at the end of the period was $16,245 thousand, down from $20,070 thousand at the beginning of the period [30]. Debt and Liabilities - Cash decreased 19.1% to $16.2 million, while total debt increased 139.3% to $40.8 million, primarily due to higher long-term debt related to acquisitions [11]. - Total debt increased to $40,774 thousand as of March 28, 2025, from $17,042 thousand as of March 29, 2024 [24]. - Total liabilities increased to $182,693 thousand as of March 28, 2025, from $157,004 thousand as of June 30, 2024 [28]. Acquisitions and Strategic Focus - The company remains focused on integrating recent acquisitions and advancing its strategic priorities in hybrid and electric marine solutions [4]. - The company acquired Kobelt, resulting in an investment of $16,346 thousand during the three quarters ended March 28, 2025 [30]. Inventory and Write-downs - The company reported a loss on the write-down of industrial product inventory amounting to $1,579 thousand for the three quarters ended March 28, 2025 [30].

TWIN DISC, INC Investor Presentation DISCLOSURES Safe Harbor Statement This presentation contains statements that are forward-looking within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. These statements are based on management's current expectations that are based on assumptions that are subject to risks and uncertainties. Actual results may vary because of variations between these assumptions and actual performance. Investors are referred to Twin Disc's fiscal year 2024 An ...

MILWAUKEE, May 07, 2025 (GLOBE NEWSWIRE) -- Twin Disc, Inc. (NASDAQ: TWIN) today reported results for the third quarter ended March 28, 2025. Fiscal Third Quarter 2025 Highlights CEO Perspective "Our third quarter results reflect another solid performance, with sequential margin improvement and strong momentum exiting the quarter. Strength across our core marine propulsion markets, particularly in North America and Europe, supported results, while order activity for Veth remained robust, continuing to be dr ...

Core Viewpoint - Twin Disc, Inc. has successfully completed the acquisition of Kobelt Manufacturing Co. Ltd. for $16.5 million, enhancing its product offerings and global reach in the marine and industrial sectors [1][2][4]. Company Overview - Twin Disc, Inc. specializes in power transmission technology for marine and land-based applications, offering products such as marine transmissions, azimuth drives, and hydraulic torque converters [5]. - Kobelt Manufacturing Co. Ltd. is a Canadian company with over 60 years of experience in designing and producing high-quality products for marine and industrial sectors, focusing on propulsion, steering, and braking control systems [6]. Acquisition Details - The acquisition of Kobelt, which generated approximately $14 million in revenue for the year ending December 31, 2024, is expected to be immediately accretive to Twin Disc's U.S. GAAP earnings [3]. - Kobelt's extensive after-sales services and manufacturing capabilities, including an in-house foundry and precision machining, will enhance Twin Disc's quality control and product diversification [2][4]. Strategic Implications - The acquisition is anticipated to expand Twin Disc's international reach and create growth opportunities through enhanced partnerships and a broader product offering [2][4]. - Both companies share a strong reputation and extensive history, which is expected to add value to their combined customer base [4].

Core Insights - Twin Disc reported a net income per share of 7 cents for the second quarter of fiscal 2025, unchanged from the prior year, with sales reaching $89.9 million, a 23.2% year-over-year increase [2][3] - The company experienced a decline in gross profit margins by 420 basis points to 24.1% due to inventory write-downs related to the Katsa Oy acquisition and an unfavorable product mix [3] Segment Performance - Marine and Propulsion Systems segment sales increased by 23.9% year over year to $56.7 million, driven by strong demand in North America, particularly in commercial and luxury yacht applications [4] - Land-Based Transmissions revenues rose 19.8% year over year to $19 million, attributed to strong demand for transmissions used in airport rescue and firefighting vehicles [5] - The Industrial segment saw the strongest growth, with sales surging 44.8% year over year to $9.5 million, partly due to contributions from Katsa Oy and increased orders from the Lufkin facility [6] - Revenues from Other Products decreased by 1.8% year over year to $4.8 million [7] Management Commentary - CEO John Batten emphasized the focus on integrating Katsa Oy and capitalizing on cross-selling opportunities, particularly in Europe and North America, with strong demand for hybrid and electric propulsion systems [8] - CFO Jeff Knutson acknowledged near-term margin pressures due to inventory rationalization but expressed confidence in improving operational efficiencies and reducing costs [9] Financial Position - Twin Disc reported a six-month backlog of $124 million, down from $144.3 million in the prior quarter, attributed to strong shipments rather than weakening demand [10] - Cash levels decreased by 24.3% year over year to $15.9 million, while total debt increased by 40.5% to $24.9 million, primarily due to the Katsa acquisition [10] Capital Allocation and Guidance - Management plans to spend approximately $12 million to $14 million on capital expenditures for fiscal 2025, with increased investment expected in the second half of the year [11] - The company aims to convert 60% of EBITDA into free cash flow, although management acknowledged challenges in achieving this target due to weaker first-quarter performance [11] Other Developments - Twin Disc is exploring strategic acquisitions aligned with its core expertise in industrial and marine technology, with a focus on integrating Katsa Oy and enhancing operational synergies [12]

Financial Data and Key Metrics Changes - The company reported sales of $89.9 million for Q2 2025, reflecting a 23.2% year-over-year increase, driven by a $10 million incremental benefit from the Casa acquisition [4][17] - Net income attributable to Twin Disc was $900,000 or $0.07 per diluted share, compared to a net loss of $900,000 or $0.07 per diluted share in Q2 2024 [18] - Gross profit margin decreased to 24.1% from 28.3% in the prior year, with gross profit increasing 5% to $21.7 million [19][21] - EBITDA increased to $6.3 million in Q2, up 13.5% compared to Q2 2024 [21] Business Line Data and Key Metrics Changes - Marine propulsion segment sales grew 23.9% year-over-year, driven by strong demand for VET products [6][19] - Land-based transmission sales increased 19.8% year-over-year, supported by strong demand in airport rescue and firefighting transmission [8][19] - The industrial segment grew 44.8% year-over-year, driven by the addition of Casa and a rebound in Lufkin orders [11][19] Market Data and Key Metrics Changes - The company experienced a decline in oil and gas exports, which accounted for a little under 8% of revenue for the quarter, down about 24% year-over-year [34] - Increased sales were noted in Europe due to the Casa acquisition and a larger proportion of sales from North America, particularly in VET projects [20] Company Strategy and Development Direction - The company is focused on integrating Casa to enhance engineering capabilities and market reach, particularly in Europe and North America [5][14] - There is a commitment to capitalizing on cross-selling opportunities, optimizing shared cost efficiencies, and maintaining strong execution [5][15] - The company aims to balance disciplined external investments with internal initiatives to ensure sustained growth and shareholder value creation [24][27] Management's Comments on Operating Environment and Future Outlook - Management noted ongoing strength in shipments of VET products and a healthy backlog across all end markets [6][10] - The company is optimistic about the stabilization of its industrial business and anticipates momentum in oil and gas as quoting activity increases [10][12] - Management emphasized a focus on higher-margin products and services while maintaining pricing discipline [22][27] Other Important Information - The company is committed to generating consistent cash flow and maintaining leverage within a comfortable range [23] - There is a focus on research and development to drive innovation and expand market presence [24] Q&A Session Summary Question: Can you quantify how much your oil and gas business is this quarter and how much was it down year over year? - The oil and gas business accounted for a little under 8% of revenue for the quarter, down about 24% compared to the prior year Q2 [34] Question: Is the quoting activity primarily from North America or Asia? - The quoting activity is from both North America and Asia, as well as some South American activity [36] Question: Can you refresh your CapEx outlook for the year and your free cash flow target? - The company targets to convert 60% of EBITDA to free cash flow, with Q2 free cash flow at about $6.4 million. CapEx is projected to be in the range of $12 to $14 million for the second half of the year [41][43] Question: Any new products or technologies being commercialized this year? - There are no specific new products or technologies ready to be discussed, but the company continues to focus on the hybrid electric market [45] Question: Any updates on the electric track fleet product? - The electric track fleet product remains stable, with no significant news to report for the quarter [49]