Slide 1: Twin Disc, Inc Investor Presentation
TWIN DISC, INC Investor Presentation
Slide 2: Disclosures
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 ris
Slide 3: Investment Highlights
INVESTMENT HIGHLIGHTS A leader in global power transmission technology with an increasingly diversified IP-protected portfolio Well-positioned to benefit from tailwinds in defense markets and hybrid transmissions supported by robust backlog Margin enhancement and operational initiatives driving favo
Slide 4: Second Quarter Highlights
SECOND QUARTER HIGHLIGHTS Strategic Financial Q2 sales +30 bps vs. YA to $90.2 million Sales growth supported by execution across Organic sales -7.9% vs. YA diversified global portfolio and enhanced market reach from acquisitions EBITDA of $4.7 million, down 25.0% vs. YA, including higher ex
Slide 5: Capturing Robust Defense Market Demand with Runway for Growth
CAPTURING ROBUST DEFENSE MARKET DEMAND WITH RUNWAY FOR GROWTH Robust TWIN Delivering Defense Activity Well Positioned Results Select Defense Products Defense as a +13% ~15% percentage of Total Backlog YoY Increase in 2026 US Defense Spending (1) Marine Transmissions, Transmissions, Propulsions Contr
Slide 6: Marine & Propulsion Systems
MARINE & PROPULSION SYSTEMS Sales flat vs. YA Continued strength in workboats, government contracts, and Veth’s ELITE thruster products Softness in Asia Pacific commercial marine Sustained demand for higher-content solutions, including hybrid propulsion, advanced maneuvering, and integrated
Slide 7: Land-Based Transmissions
LAND-BASED TRANSMISSIONS Sales decreased by 8.1% vs. YA, primarily driven by shipment delays to ARFF customers Customer behavior cautious in North America; rebuilds and refurbishments continue to outpace new equipment purchases Early signs of improvement internationally, including significant
Slide 8: Industrial
INDUSTRIAL Sales increased by 22.0% vs. YA, largely due to the acquisition of Kobelt Steady sequential recovery in demand and order trends with growth in customer activity Expanded use of Katsa capabilities to support higher-content, differentiated solutions across industrial end markets Foc
Slide 9: Continued Backlog Growth
CONTINUED BACKLOG GROWTH BACKLOG AND INVENTORY % OF BACKLOG $180.0 $175.3 $163.3 190.0% $160.0 $150.5 Healthy 6-month backlog higher $140.0 $133.7 170.0% sequentially and on a year-over-year $124.0 basis $120.0 150.0% $100.0 Growth in backlog led by 130.0% propulsion and defense $80.0 103% 103%
Slide 10: Long-Term Strategy
LONG-TERM STRATEGY Leading Hybrid/Electric solution provider for niche marine and land-based applications 2030 FY Targets Continued expansion of acquisitions to reach new markets and geographies $500M Revenue Rationalize global footprint for efficiency and customer response 30% Gross Margins Increas
Slide 11: Financial Overview
FINANCIAL OVERVIEW nos
Slide 12: Financial Performance
FINANCIAL PERFORMANCE SALES ($ in millions) $89.9 $90.2 Continued healthy demand across global markets Contribution from acquisitions and operational execution driving performance and sales growth 2QF25 2QF26 EARNINGS PER SHARE $1.55 EPS improvement attributable to an income tax benefit of $21
Slide 13: Sales Diversity
SALES DIVERSITY SALES BY PRODUCT GROUP ($ in millions) $4.8 $4.5 $9.5 $11.5 Sales growth driven by strength $19.0 $17.5 within Marine and Propulsion Systems and Industrials: $56.7 $56.7 Consistent market demand Geographic expansion 2QF25 2QF26 Recovery in Industrials sales Marine & Propulsion
Slide 14: Strong Balance Sheet
STRONG BALANCE SHEET BALANCE SHEET ($ in millions) $44.5 $29.6 $24.9 NET LEVERAGE RATIO $15.9 $14.9 $9.0 1.3x Total Debt Cash Net Debt 2QF25 2QF26 0.3x LTM EBITDA ($ in millions) 2QF25 2QF26 $26.8 $22.0 Increase primarily due to acquisition of Kobelt 2QF25 2QF26 14
Slide 15: Margins & Near-Term Expectations
MARGINS & NEAR-TERM EXPECTATIONS SECOND QUARTER GROSS MARGIN DRIVERS Gross margin increased by 70 basis SECOND QUARTER TWIN DISC GROSS MARGIN points vs. YA, largely due to the absence of inventory-related charges recorded last year 24.1% 24.8% Benefits of incremental volume and successful margin
Slide 16: Capital Allocation Framework
CAPITAL ALLOCATION FRAMEWORK Debt Reduction Research & Development Focus Areas Geographic diversification / expansion Marketing Return Capital to Shareholders (Dividends) Diversification away from Oil & Gas Strategic Fit Acquisition logic immediately evident Organic Growth Clear value cr
Slide 17: Key Takeaways
KEY TAKEAWAYS Navigated challenging operating environment with resilient demand across diversified portfolio supporting record backlog levels and solid 2H visibility Tariff-related impacts elevated during the quarter, influencing shipment timing and margins, with mitigation actions underway and
Slide 18: Q&A
Q&A Fiscal 2026 Second Quarter Earnings Call 18
Slide 19: Appendix
APPENDIX a>.
Slide 20: Reconciliation of Non-GAAP Financial Measures: Net Sales to Organic Net Sales
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO REPORTED FINANCIAL MEASURES RECONCILIATION OF REPORTED NET SALES TO ORGANIC NET SALES (In thousands; unaudited) 2Q26 2Q25 Net Sales $90,180 $89,921 Less: Acquisition(1) (3,191) - Less: Foreign Currency Impact (4,149) - Organic Net Sales $82,839 $89,92
Slide 21: Reconciliation of Non-GAAP Financial Measures: Total Debt to Net Debt
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO REPORTED FINANCIAL MEASURES RECONCILIATION OF TOTAL DEBT TO NET DEBT TO EBITDA LEVERAGE RATIO CALCULATION (In thousands; unaudited) December 26, 2025 December 27, 2024 Current maturities of long-term debt $3,000 $2,000 Long-term debt 41,515 22,873 Tot
Slide 22: Reconciliation of Non-GAAP Financial Measures: Net Income to EBITDA
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO REPORTED FINANCIAL MEASURES RECONCILIATION OF CONSOLIDATED NET INCOME TO EBITDA (In thousands; unaudited) 2Q26 1Q26 FY25 4Q25 3QF25 2QF25 Net Income (loss) attributable to Twin $22,371 ($518) ($1,894) $1,424 ($1,472) $919 Disc Interest expense 772 800
Slide 23: Reconciliation of Non-GAAP Financial Measures: Operating Cash Flow to Free Cash Flow
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO REPORTED FINANCIAL MEASURES RECONCILIATION OF NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES TO FREE CASH FLOW (In thousands; unaudited) For the Quarter Ended December 26, 2025 December 27, 2024 Net cash provided (used) by operating $4,555 $8,658 ac