Twin Disc Announces First Quarter Results

MILWAUKEE, Nov. 05, 2025 (GLOBE NEWSWIRE) -- Twin Disc, Inc. (NASDAQ: TWIN) today reported results for the first quarter ended September 26, 2025.

Fiscal First Quarter 2026 Highlights

• Sales increased 9.7% year-over-year to $80.0 million

• Gross margin of 28.7%, expanded 220 basis points over prior year

• Net loss attributable to Twin Disc was $518 thousand and EBITDA* of $4.7 million

• Robust six-month backlog of $163.3 million supported by healthy ongoing demand

• Continued momentum in defense, with accelerating orders and an expanding pipeline across U.S. and Europe

CEO Perspective

“We delivered a solid start to the year, with sales and margin growth that reflects the benefits of our operational discipline and the strength of our diversified end markets. In the Defense market, orders continued to accelerate, lifting six-month backlog by 8.5% since the end of fiscal 2025. In terms of our product groups, Marine and Propulsion delivered record new-unit bookings, secured wins in autonomous-vessel applications, and benefited from healthy aftermarket demand. Land-based transmission activity remained steady, with stable aftermarket demand in oil and gas and encouraging long-term prospects tied to replacement cycles,” commented John H. Batten, President and Chief Executive Officer of Twin Disc.

“Looking ahead, we remain focused on executing our growth strategy through disciplined operations, innovation, and customer engagement. With a healthy backlog and continued momentum in our core markets, we are well positioned to build on this progress and deliver profitable growth throughout fiscal 2026,” Mr. Batten concluded.

First Quarter Results

Sales for the fiscal 2026 first quarter increased 9.7% year-over-year to $80.0 million, driven by the addition of Kobelt, along with strength in the Company’s Veth products in Marine and Propulsion Systems, in addition to recovery in Industrial product segments. On an organic basis*, which excludes the impacts of acquisitions and foreign currency exchange, fiscal first quarter 2026 sales increased 1.1% year-over-year.

Sales by product group (certain amounts have been reclassified from Marine and Propulsion to Other):

Twin Disc delivered double-digit growth year-over-year in the North American region which drove a shift in the distribution of sales across geographical regions. A greater proportion of sales came from the North American region, with a lower proportion of sales coming from the Middle East and Asia Pacific.

Gross profit increased 18.7% to $22.9 million compared to $19.3 million for the first quarter of fiscal 2025. First quarter gross margin increased approximately 220 basis points to 28.7% from the prior year period, reflecting the benefit of incremental volume and successful margin improvement initiatives.

Marketing, engineering and administrative (ME&A) expense increased by $1.2 million, or 6.2%, to $20.7 million, compared to $19.5 million in the prior year quarter. The increased ME&A expense was primarily driven by the addition of Kobelt, along with an increase in professional fees and an inflationary impact on wages and benefits.

Net loss attributable to Twin Disc for the first quarter of fiscal 2026 was ($518) thousand, or ($0.04) per diluted share, compared to net loss attributable to Twin Disc of ($2.8) million, or ($0.20) per diluted share for the first fiscal quarter of 2025. The year-over-year change was driven by an increase in operating income and a decrease in other expense ($480 thousand) related to a reduced currency loss ($0.9 million) offset by an increase in the amortization of the net actuarial loss related to the Company’s domestic defined benefit pension plan ($0.5 million). Earnings before interest, taxes, depreciation, and amortization (EBITDA) were $4.7 million in the first quarter, up 172.3% compared to the first quarter of fiscal 2025.

Certain items impacting EBITDA for the first quarter 2026 include:

On a consolidated basis, the backlog of orders to be shipped over the next six months is approximately $163.3 million, compared to $150.5 million at the end of the fourth quarter. As a percentage of six-month backlog, inventory decreased from 101.0% at the end of the fourth quarter, to 96.9% at the end of the first quarter. Compared to the first fiscal quarter of 2025, cash decreased 14.8% to $14.2 million, total debt increased 46.7% to $43.7 million, and net debt* increased $16.4 million to $29.5 million. The increase was primarily attributable to higher long-term debt related to the Kobelt acquisition.

CFO Perspective

Jeffrey S. Knutson, Vice President of Finance, Chief Financial Officer, Treasurer and Secretary stated, “Our first quarter results reflected solid year-over-year growth and healthy margins. EBITDA improved year-over-year, supported by higher sales and margins, while sequential results reflected normal seasonal patterns and continued investments in growth. Moving forward, we remain focused on reducing inventory levels and maintaining balance sheet strength, while continuing to support growing market demand, invest in initiatives that strengthen our operations and position Twin Disc for long-term value creation.”

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 November 5, 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 November 5, 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, control systems, and braking 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,  military 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 Statements

This 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 as net sales excluding the recent acquisition of 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:
Riveron
TwinDiscIR@Riveron.com

Source: Twin Disc, Incorporated