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: Second Quarter Highlights
SECOND QUARTER HIGHLIGHTS Financial Strategic Q2 sales +23.2% vs. YA to $89.9 million Driving progress with Katsa Oy Organic sales increased 10.1% vs. YA integration Gross margin decreased ~420 bps vs. YA Focus on improving profitability though to 24.1% operational efficiency Q2 EBITDA o
Slide 4: Marine & Propulsion Systems
MARINE & PROPULSION SYSTEMS Sales increased by 23.9% vs. YA Commercial markets show consistent activity globally Veth product supporting synergies and record orders through the quarter, with six-month backlog remaining healthy Strength in new North American projects Rolla & Veth partnershi
Slide 5: Land-Based Transmissions
LAND-BASED TRANSMISSIONS Sales increased by 19.8% vs. YA ARFF transmissions with strong shipments in the quarter Oil & Gas challenged due to continued slowdown in Asia Pacific and subdued new build in North America Meeting demand for replacement parts with aftermarket remaining stable 5
Slide 6: Industrial
INDUSTRIAL Sales increased by 44.8% vs. YA Continued sequential stabilization in demand and order trends Volume growth supported by recovery of Lufkin orders and strengthened by Katsa Oy Channel inventory replenishment provided a lift to demand 6
Slide 7: Continued Backlog Growth
CONTINUED BACKLOG GROWTH BACKLOG AND INVENTORY % OF BACKLOG $144.3 $130.5 $133.7 $125.2 $124.0 1.05 6-month backlog lower sequentially 1.03 and on a year-over-year basis on high shipments in the quarter 1.00 1.00 FX contributed $11.5 million from 0.98 prior year quarter Veth backlog growing on
Slide 8: Long-Term Strategy
LONG-TERM STRATEGY Leading Hybrid/Electric Continued expansion of Veth Rationalize global footprint solution provider for niche product to reach new for efficiency and customer marine and land-based markets and geographies response applications Increased focus on controls M&A priorities: Industrial
Slide 9: Financial Overview
FINANCIAL OVERVIEW 9
Slide 10: Financial Performance
FINANCIAL PERFORMANCE SALES ($ in millions) $89.9 $84.4 $73.0 $74.2 $72.9 Continued healthy demand across global markets Operational execution driving performance 2QF24 3QF24 4QF24 1QF25 2QF25 EARNINGS PER SHARE $0.53 $0.27 $0.07 $0.07 EPS impacted by additional interest expense on the Katsa O
Slide 11: Sales Diversity
SALES DIVERSITY SALES BY PRODUCT GROUP ($ in millions) $4.8 $5.0 Sales growth driven by strength within $4.8 $4.3 $4.3 $9.5 $7.2 Marine and Propulsion Systems and $6.5 $6.2 $9.2 $19.0 $15.9 $25.0 Industrials: $19.1 $17.3 • Consistent market demand $56.7 $46.9 $44.5 $47.2 $42.1 • Geographic expansion
Slide 12: Strong Balance Sheet
STRONG BALANCE SHEET BALANCE SHEET ($ in millions) $24.9 $21.0 $17.7 LEVERAGE RATIO $15.9 $9.0 0.4x -$3.3 Total Debt Cash Net Debt 2QF24 2QF25 EBITDA ($ in millions) $6.3 $5.5 -0.1x 2QF24 2QF25 2QF24 2QF25 12
Slide 13: Margins & Near-Term Expectations
MARGINS & NEAR-TERM EXPECTATIONS TWIN DISC GROSS MARGIN SECOND QUARTER GROSS MARGIN DRIVERS 28.3% 24.1% Gross margin decreased sequentially by 420 basis points vs. YA Impact of product rationalization and amortization expense following Katsa acquisition, in addition to unfavorable 2QF24 2QF25 mi
Slide 14: 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 Evident value
Slide 15: Key Takeaways
KEY TAKEAWAYS Strong sales growth fueled performance improvements, with short-term margin impacts offset by ongoing initiatives aimed at enhancing profitability Healthy backlog supported by consistent demand across end markets Positioned to navigate economic uncertainty with confidence, suppor
Slide 16: Q&A Fiscal 2025 Second Quarter Earnings Call
Q&A Fiscal 2025 Second Quarter Earnings Call 16
Slide 17: Appendix
APPENDIX a>.
Slide 18: Reconciliation of Reported 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) 2Q25 2Q24 Net Sales $89,921 $72,994 Less: Acquisitions/Divestitures(1) 9,987 751 Less: Foreign Currency Impact 355 - Organic Net Sales $79,
Slide 19: Reconciliation of Total Debt to Net Debt
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO REPORTED FINANCIAL MEASURES RECONCILIATION OF TOTAL DEBT TO NET DEBT (In thousands; unaudited) December 27, 2024 December 29, 2023 Current maturities of long-term debt 2,000 2,000 Long-term debt 22,873 15,698 Total debt $24,873 $17,698 Less cash 15,90
Slide 20: Reconciliation of Consolidated Net Income to EBITDA
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO REPORTED FINANCIAL MEASURES RECONCILIATION OF CONSOLIDATED NET INCOME TO EBITDA (In thousands; unaudited) 2Q25 LTM 2QF25 FY24 1QF25 4QF24 3QF24 2QF24 Net Income (loss) attributable to Twin Disc $9,386 $919 $10,989 $(2,765) $7,410 $3,822 $930 Interest
Slide 21: Net Debt to EBITDA Leverage Ratio Calculation
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO REPORTED FINANCIAL MEASURES NET DEBT TO EBITDA LEVERAGE RATIO CALCULATION 2QF25 2QF24 Net debt $8,967 $(3,323) LTM EBITDA 26,759 26,004 Leverage Ratio 0.3x -0.01x 21