Twin Disc Inc (TWIN) SEC Filing 10-Q Quarterly Report for the period ending Friday, March 31, 2023

Exhibit 99.1

Twin Disc Reports Solid Third Quarter Results

RACINE, Wis., April 28, 2023 (GLOBE NEWSWIRE) --

Fiscal Third Quarter 2023 Highlights

CEO Perspective
“Our team remained agile during the quarter capitalizing on robust end market demand and easing supply chain headwinds to deliver a 24% increase in sales year-over-year. While we are very proud of these results, our margins were negatively impacted by a number of factors, including component shortages and inflation that more than offset the partial quarter of pricing realization. As we have discussed, we are laser-focused on margin expansion and cash flow and expect to see some of the actions we have taken bear fruit over the coming quarters. Importantly, our third quarter backlog is at the highest level we’ve seen since fiscal 2018 and inventory levels are sequentially lower on a dollar and percentage of backlog basis. As such, we remain optimistic as we look ahead and leverage our competitive strengths across the business to drive profitable growth over the long term,” commented John H. Batten, President and Chief Executive Officer of Twin Disc.

Third Quarter Results
Sales for the fiscal 2023 third quarter increased 24.4% year-over-year to $73.8 million driven by strong demand in both the Company’s Marine and Propulsion Systems, as well as Land-Based Transmission markets, and solid operational improvements resulting in higher quarterly shipments than expected.

Sales by product group:

The Company delivered double-digit growth in North American and Asia Pacific regions on both a sequential and year-over-year basis driven by strong end market demand and the expansion of our Veth business into new geographies and the luxury yacht market.

Gross profit increased 8.9% to $19.3 million compared to $17.7 million for the third quarter of fiscal 2022. Gross margin was 26.1% in the third quarter, compared to 29.8% in the prior year period. The 370-basis point year-over-year decrease was primarily driven by unfavorable mix and continued inflationary and supply chain pressures. The Company implemented, and started to realize, additional price increases during the quarter, which will favorably impact margins going forward. Year-to-date gross profit increased 11.1% to $49.6 million. Year-to-date gross margin decreased 100 basis points to 25.7%.

Marketing, engineering and administrative (ME&A) expense increased by $0.2 million, or 1.6%, to $14.6 million, compared to $14.4 million in the prior year quarter. The increased ME&A expense was primarily driven by a prior year Dutch subsidy of $0.7 million, a $0.7 million inflationary impact on wages, and a $0.4 million increase in travel costs as we return to more normal travel levels. These increases were partially offset by a $1.2 million reduction in the global bonus accrual. On a year-to-date basis, ME&A expense increased 6.9% to $45.7 million.

Net income attributable to Twin Disc for the quarter was $2.7 million, or $0.20 per diluted share, compared to a net income attributable to Twin Disc of $2.2 million, or $0.17 per share, for the third fiscal quarter of 2022. The year-over-year improvement was partially driven by lower income tax expense resulting from the geographic mix of earnings. Year-to-date, the Company generated net income attributable to Twin Disc of $1.8 million, or $0.13 per diluted share, a 564.6% and 550.2% increase, respectively, from the comparable prior year period.