Twin Disc Announces Full Year and Fourth Quarter Results
MILWAUKEE, Aug. 21, 2025 (GLOBE NEWSWIRE) -- Twin Disc, Inc. (NASDAQ:TWIN) today reported results for the fourth quarter and full fiscal year 2025 ended June 30, 2025.
Fiscal Full Year 2025 Highlights
Sales increased 15.5% year-over-year to $340.7 million
Net loss attributable to Twin Disc was ($1.9) million
EBITDA* of $19.0 million, including the impact from currency translation loss, stock based compensation, and other items
Operating cash flow of $24.0 million and Free cash flow* of $8.8 million
Healthy six-month backlog of $150.5 million supported by strong ongoing order activity
Fiscal Fourth Quarter 2025 Highlights
Sales increased 14.5% year-over-year to $96.7 million
Net income attributable to Twin Disc was $1.4 million
EBITDA* of $7.0 million, including the impact from currency translation loss, stock based compensation, and other items
Operating cash flow of $16.4 million and Free cash flow* of $8.7 million
CEO Perspective
"We closed out the fiscal year with our strongest quarter, a reflection of the team's consistent execution and resilience in dynamic markets. Marine and Propulsion led the way with robust defense-driven demand, while Industrial saw steady recovery and increased shipments late in the year. Although oil and gas remained challenged, we continued to advance our electrification strategy with new e-frac activity. Throughout the year, we maintained pricing discipline and protected margins, even as we managed through tariff noise and ongoing cost pressures. Our recent acquisitions expanded our global footprint and diversified our end markets, reinforcing the strength of our platform," commented John H. Batten, President and Chief Executive Officer of Twin Disc.
"As we enter the new fiscal year, we are in a stronger position both operationally and strategically, supported by a healthy backlog, greater organizational agility, and our integration efforts that are creating new commercial opportunities across regions and segments. Our established presence in the defense market, reinforced by a steady flow of strong customer inquiries, positions us to capture additional growth. Looking ahead, we are committed to driving growth, maintaining disciplined operations, and executing on our long-term value creation strategy," concluded Mr. Batten.
Fourth Quarter and Full-Year ResultsSales for the fiscal fourth quarter 2025 increased 14.5% year-over-year to $96.7 million and fiscal full year 2025 sales increased 15.5% to $340.7 million when compared to the prior fiscal year. Fiscal 2025 fourth quarter and full year sales growth were both driven by demand for the Company's Land-Based Transmissions markets, with strength in Marine and Propulsion Systems, and a stabilization in the Industrial segment. On an organic basis*, which excludes the impacts of acquisitions and foreign currency exchange, fiscal fourth quarter 2025 revenue decreased 8.4% year-over-year, due primarily to reduced shipments of oil and gas transmissions into China. For the fiscal full year 2025, revenue increased 1.0% on an organic basis when compared to the prior fiscal year.
Sales by product group (certain amounts have been reclassified from Marine and Propulsion to Other):
Product Group
Q4 FY25 Sales
Q4 FY24 Sales
Change (%)
(Thousands of $):
Marine and Propulsion Systems
$53,011
$47,228
12.2%
Land-Based Transmissions
26,122
24,989
4.5%
Industrial
13,141
7,219
82.0%
Other
4,404
4,982
-11.6%
Total
$96,678
$84,418
14.5%
Product Group
FY25 Sales
FY24 Sales
Change (%)
(Thousands of $):
Marine and Propulsion Systems
$201,101
$171,765
17.1%
Land-Based Transmissions
80,192
78,519
2.1%
Industrial
41,502
25,669
61.7%
Other
17,943
19,174
(6.4%)
Total
$340,738
$295,127
15.5%
For the fiscal full year 2025, Twin Disc delivered double-digit growth year-over-year in the European and Asia-Pacific regions including the impact of acquisitions. The distribution of sales across geographical regions shifted, with a greater proportion of sales coming from Europe, and a lower proportion coming from the Asia-Pacific region.
Gross profit increased 19.7% to $30.0 million in fiscal fourth quarter 2025 compared to $25.1 million in the prior fiscal year period. Fiscal fourth quarter 2025 gross margin improved approximately 130 basis points to 31.0% from the prior fiscal year period, supported by a favorable product mix and one-time cost capitalization adjustments in Katsa inventory. For the fiscal full year 2025, gross profit increased 11.3% year-over-year to $92.7 million, and gross margin decreased approximately 100 basis points to 27.2% from the prior fiscal year.
Marketing, engineering and administrative (ME&A) expenses increased by $4.3 million, or 20.9%, to $24.6 million in the fiscal fourth quarter 2025, compared to $20.4 million in the prior fiscal year period. The increased ME&A expense was primarily driven by the addition of Katsa and Kobelt, in addition to an increase in professional fees and an inflationary impact on wages and benefits. For the fiscal full year 2025, ME&A expense increased 15.1% to $82.4 million, primarily driven by the same factors driving the fourth quarter increase, noted above.
Net income attributable to Twin Disc for the fourth quarter of fiscal 2025 was $1.4 million, or $0.10 per diluted share, compared to net income attributable to Twin Disc of $7.4 million, or $0.53 per diluted share, for the fourth quarter of fiscal 2024. For the fiscal full year 2025, the Company generated a net loss attributable to Twin Disc of ($1.9 million), or ($0.14) per diluted share, a decrease of 116.8% and 116.5%, respectively, from fiscal full year 2024. Earnings before interest, taxes, depreciation, and amortization (EBITDA) were $7.0 million in the fiscal fourth quarter 2025, down 40.4% compared to the fourth quarter of fiscal 2024. The year-over-year change was primarily driven by increased currency translation losses, higher operating expenses, and stock based compensation. Fiscal full year 2025 EBITDA decreased 28.3% to $19.0 million from $26.5 million in fiscal full year 2024. This change was largely driven by increased currency translation losses, stock based compensation, and inventory adjustments.
Certain items impacting EBITDA for the fourth quarter and full year of fiscal 2025 and 2024 include:
(Thousands of $):
Q4 FY25
Q4 FY24
FY25
FY24
Restructuring
$52
$11
$408
$218
Non-cash stock based compensation
1,389
1,373
4,068
3,383
Non-cash strategic inventory write-down
-
-
1,579
3,099
Acquisition costs
40
488
839
856
Non-cash bargain purchase gain
-
(3,724)
-
(3,724)
Currency translation (gain)/loss
2,935
(703)
4,825
(377)
Non-cash defined benefit pension amortization
191
(258)
885
(1,076)
On a consolidated basis, the backlog of orders to be shipped over the next six months is approximately $150.5 million at the end of the fourth quarter, compared to $133.7 million at the end of the third quarter. As a percentage of six-month backlog, inventory decreased from 103.2% at the end of the third quarter, to 101.0% at the end of the fourth quarter. Compared to the end of fiscal 2024, cash decreased 19.7% to $16.1 million, total debt increased 21.8% to $31.4 million, and net debt* increased $9.6 million to $15.3 million. The increase was primarily attributable to higher long-term debt related to the Katsa and Kobelt acquisitions.
CFO PerspectiveJeffrey S. Knutson, Vice President of Finance, Chief Financial Officer, Treasurer and Secretary, stated, "We're pleased with our financial performance this year, marked by disciplined execution and strong integration progress. Our inventory is well positioned to support demand heading into the new year, and our cash position remains healthy, giving us flexibility to invest in growth while maintaining a strong balance sheet. With continued progress on global manufacturing optimization, we're well equipped to scale efficiently and support sustainable profitability."
Discussion of Results
Twin Disc will host a conference call to discuss these results and to answer questions at 9:00 a.m. Eastern time on August 21, 2025. The live audio webcast will be available on Twin Disc's website at https://ir.twindisc.com. To participate in the conference call, please dial (646) 307-1963 approximately ten minutes before the call is scheduled to begin. A replay of the webcast will be available at https://ir.twindisc.com shortly after the call until August 21, 2026.
About Twin Disc
Twin Disc, Inc. designs, manufactures, and sells marine and heavy-duty off-highway power transmission equipment. Products offered include marine transmissions, azimuth drives, surface drives, propellers, and boat management systems, as well as power-shift transmissions, hydraulic torque converters, power take-offs, industrial clutches, and control systems. The Company sells its products to customers primarily in the pleasure craft, commercial and military marine markets, as well as in the energy and natural resources, government, and industrial markets. The Company's worldwide sales to both domestic and foreign customers are transacted through a direct sales force and a distributor network. For more information, please visit www.twindisc.com.
Forward-Looking StatementsThis press release may contain statements that are forward looking as defined by the Securities and Exchange Commission in its rules, regulations, and releases. The words "anticipates," "believes," "intends," "estimates," and "expects," or similar anticipatory expressions, usually identify forward-looking statements. The Company intends that such forward-looking statements qualify for the safe harbors from liability established by the Private Securities Litigation Reform Act of 1995. All forward-looking statements are based on current expectations and are subject to certain risks and uncertainties that could cause actual results or outcomes to differ materially from current expectations. Such risks and uncertainties include the impact of general economic conditions and the cyclical nature of many of the Company's product markets; foreign currency risks and other risks associated with the Company's international sales and operations; the ability of the Company to successfully implement price increases to offset increasing commodity costs; the ability of the Company to generate sufficient cash to pay its indebtedness as it becomes due; and the possibility of unforeseen tax consequences and the impact of tax reform in the U.S. or other jurisdictions. These and other risks are described under the caption "Risk Factors" in Item 1A of the Company's most recent Form 10-K filed with the Securities and Exchange Commission, as supplemented in subsequent periodic reports filed with the Securities and Exchange Commission. Accordingly, the making of such statements should not be regarded as a representation by the Company or any other person that the results expressed therein will be achieved. The Company assumes no obligation, and disclaims any obligation, to publicly update or revise any forward-looking statements to reflect subsequent events, new information, or otherwise.
*Non-GAAP Financial Information
Financial information excluding the impact of asset impairments, restructuring charges, foreign currency exchange rate changes and the impact of acquisitions, if any, in this press release are not measures that are defined in U.S. Generally Accepted Accounting Principles ("GAAP"). These items are measures that management believes are important to adjust for in order to have a meaningful comparison to prior and future periods and to provide a basis for future projections and for estimating our earnings growth prospects. Non-GAAP measures are used by management as a performance measure to judge profitability of our business absent the impact of foreign currency exchange rate changes and acquisitions. Management analyzes the company's business performance and trends excluding these amounts. These measures, as well as EBITDA, provide a more consistent view of performance than the closest GAAP equivalent for management and investors. Management compensates for this by using these measures in combination with the GAAP measures. The presentation of the non-GAAP measures in this press release are made alongside the most directly comparable GAAP measures.
Definitions
Organic net sales is defined respectively as net sales excluding the recent acquisitions of Katsa and Kobelt while adjusting for the effects of foreign currency exchange.
Earnings before interest, taxes, depreciation, and amortization (EBITDA) is calculated as net earnings or loss excluding interest expense, the provision or benefit for income taxes, depreciation, and amortization expenses.
Net debt is calculated as total debt less cash.
Free cash flow is calculated as net cash provided (used) by operating activities less acquisition of fixed assets.
Investors:
Source: Twin Disc, Incorporated
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE INCOME (LOSS)
(In thousands, except per-share data; unaudited)
For the Quarter Ended
For the Year Ended
June 30, 2025
June 30, 2024
June 30, 2025
June 30, 2024
Net sales
$
96,678
$
84,418
$
340,738
$
295,127
Cost of goods sold
66,660
59,332
246,433
208,709
Cost of goods sold - Other
-
-
1,579
3,099
Gross profit
30,018
25,086
92,726
83,319
Marketing, engineering, and administrative expenses
24,620
20,356
82,431
71,622
Restructuring expenses
53
11
408
218
Income from operations
5,345
4,719
9,887
11,479
Other (expense) income:
Interest expense
(855
)
(394
)
(2,646
)
(1,443
)
Bargain purchase gain
3,724
3,724
Other (expense) income, net
(2,947
)
961
(5,472
)
1,607
(3,802
)
4,291
(8,118
)
3,888
Income before income taxes and noncontrolling interest
1,543
9,010
1,769
15,367
