Twin Disc Inc (TWIN) 10-Q Quarterly Report November 2023

“We delivered impressive results in the first quarter, highlighted by double-digit revenue growth, robust margin expansion, and solid cash generation, giving us the confidence to reinstate our quarterly dividend. Thanks to the hard work of our global teams, we are capturing stable demand across product groups, boosted by increased activity in oil and gas markets in what is seasonally our slowest quarter.” commented John H. Batten, President and Chief Executive Officer of Twin Disc. “We are encouraged by our strong performance and upward trend in backlog this far in the fiscal year; however, the broader macroeconomic environment remains volatile, which has somewhat impacted our visibility. That said, our results have further strengthened our overall financial profile, enabling us to navigate through potential challenges while putting us on a path for sustained growth. We look forward to keeping this momentum up as the year moves on to create long-term value for all stakeholders,” concluded Mr. Batten.

First Quarter Results

Sales for the fiscal 2024 first quarter increased 13.7% year-over-year to $63.6 million, driven by demand for the Company’s Marine and Propulsion Systems and Land-Based Transmissions markets, and favorable product mix.

Sales by product group:

Product Group
(Thousands of $):	Q1 FY24 Sales		Q1 FY23 Sales		Change (%)
Marine and Propulsion Systems	$	36,463	$	29,336		24.3	%
Land-Based Transmissions		18,577		15,938		16.6	%
Industrial		5,685		7,031		-19.1	%
Other		2,829		3,608		-21.6	%
Total	$	63,554	$	55,913		13.7	%

The company delivered 19% growth year-over-year in the Europe, North America, and Asia-Pacific regions. The proportion of total sales increased in the Europe and Asia-Pacific regions, with a relative decrease in North America.

Gross profit increased 25.1% to $16.6 million compared to $13.3 million for the first fiscal quarter of 2023. First quarter gross margin increased approximately 240 basis points sequentially to 26.2%, despite a one-time non-cash charge of $3.1 million related to the sale of our boat management system product line. This improvement reflects the benefit of prior pricing actions, continued easing of supply chain headwinds, a favorable product mix and successfully executing our operational playbook.

Marketing, engineering and administrative (ME&A) expense increased by $1.8 million, or 12.2%, to $16.9 million, compared to $15.1 million in the prior year quarter. The increased ME&A expense was primarily driven by the investment in resources to drive our hybrid electric strategy, the impact of inflation and currency translation.

The following information was filed by Twin Disc Inc (TWIN) on Thursday, November 2, 2023 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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Inside Twin Disc Inc's 10-Q Quarterly Report:

Revenue - Geography Highlight
The Companys distribution operation in Australia, which provides boat accessories, propulsion and marine transmission systems for the pleasure craft market, saw a decline in revenue (16.6% decrease from the prior year first fiscal quarter), primarily due to timing of shipments and an unfavorable currency impact.

Other - Other Highlight
Similarly, the Companys Belgian operation saw an increase compared to the prior year first quarter (25.2% or $1.1 million), with a favorable translation effect and improved delivery performance driven by operational and supply chain execution.
Financial - Cash Flow Highlight
During the first quarter, the Company reported positive free cash flow of $6.1 million (defined as operating cash flow less acquisitions of fixed assets), driven by positive operating results and working capital performance, partially offset by the payment of a bonus accrual and capital spending.
Revenue - Geography Highlight
The Asia Pacific region enjoyed the most significant sales improvement ($7.3 million or 58.9%) due to improved shipments of oil and gas transmissions into China, an improved demand for commercial marine products and continued strength in pleasure craft demand in Australia.
Revenue - Product Highlight
The Companys operation in the Netherlands saw increased revenue of $7.6 million (102.1%) compared to the first fiscal quarter of 2023, primarily due to a record level of incoming orders over the past few quarters, along with a favorable currency impact and improved operational and supply chain performance.
Other - Other
In addition to the assumptions...Read more
Financial - Expense
ME&A expenses increased $1.8 million...Read more
Financial - Shares
The net loss during the...Read more
Financial - Shares
The net change in common...Read more
Revenue - Product
The U.S. manufacturing operations experienced...Read more
Other - Other
Cash increased by $7.2 million...Read more
Other - Other
The Company?s capital program is...Read more
Revenue - Geography
The Company?s Asian distribution operations...Read more
Other - Other
Upon the occurrence of an...Read more
Revenue - Geography
The European region also saw...Read more
Financial - Earnings
The Company?s Tangible Net Worth...Read more
Revenue - Product
The current year first quarter...Read more
Financial - Debt
Specifically, the Company?s Total Funded...Read more
Other - Other
26 New Accounting Releases See...Read more
Revenue - Product
(In thousands) 23 Comparison of...Read more
Financial - Income
Other income of $0.1 million...Read more
Revenue - Geography
The impact of foreign currency...Read more
Revenue - Product
Currency translation had a favorable...Read more

Financial Statements, Disclosures and Schedules

Inside this 10-Q Quarterly Report

Material Contracts, Statements, Certifications & more

Twin Disc Inc provided additional information to their SEC Filing as exhibits

Exhibit 31.A: Rule 13A-14(A)/15D-14(A) Certification

Exhibit 31.B: Rule 13A-14(A)/15D-14(A) Certification

Exhibit 32.A: Section 1350 Certification

Exhibit 32.B: Section 1350 Certification

Ticker: TWIN
CIK: 100378
Form Type: 10-Q Quarterly Report
Accession Number: 0001437749-23-030777
Submitted to the SEC: Wed Nov 08 2023 8:00:40 AM EST
Accepted by the SEC: Wed Nov 08 2023
Period: Friday, September 29, 2023
Industry: General Industrial Machinery And Equipment