Twin Disc, Incorporated · NASDAQ:TWIN
Twin Disc — Investor Presentation (June 2014)
36 slides from Twin Disc's investor presentation, Jun 23, 2014
Slide 1: Twin Disc, Incorporated June 23, 2014
Twin Disc, Incorporated June 23, 2014
Slide 2: Safe Harbor Statement
Twin Disc, Incorporated June 23, 2014 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 assumptio
Slide 3: Twin Disc At A Glance
Twin Disc, Incorporated June 23, 2014 • Founded in 1918 • Headquartered in Racine, WI • ≈ 966 employees (May ‘14) • TTM Revenues of $266M FY13 Revenues of $285M FY12 Revenues of $356M FY11 Revenues of $310M • We are a global company – Well-known customers around the world – Mfg Operations in the U.S
Slide 4: FY 2014 - First Nine Months
Twin Disc, Incorporated FY 2014 - First Nine Months June 23, 2014 • Sales down 9% from FY ‘13 – Reflects lower level of business in North America and Europe – Offset by increased shipments to customers in Asian markets • $1.3 million profit, or $0.12 per diluted share, down $0.22 compared to FY ‘13
Slide 5: Marine & Propulsion Systems
Twin Disc, Incorporated June 23, 2014 Marine & Propulsion Systems • Commercial Marine: – European market remains uncertain, likely 2-3 years to recover – Long term growth in Asia, Latin and North America expected to continue • Patrol Boat: – Experienced recent growth as demand for coastal security a
Slide 6: Land-Based Products: Transmission Systems
Twin Disc, Incorporated June 23, 2014 Land-Based Products Transmission Systems • Pressure Pumping: – Achieved record units sales in fiscal ‘12 – Asian market, driven by China, has partially offset North American softening – Cautiously optimistic that order activity will start to build in second half
Slide 7: Land-Based Products: Pressure Pumping
Twin Disc, Incorporated June 23, 2014 Land-Based Products Pressure Pumping U.S. dry natural gas production by source,1990-2040 (trillion cubic feet) Source: EIA, Annual Energy Outlook 2013 (Early Release Overview). U.S. domestic crude oil production by source, 1990-2040 (million barrels per day) Sou
Slide 8: Land-Based Products: Industrial Products
Twin Disc, Incorporated June 23, 2014 Land-Based Products Industrial Products • North America Energy Related: – Demand will grow as North American oil & gas market strengthens • Irrigation & Pumping Applications: – PTO and industrial gearbox lines drove growth – Solid reputation for quality, global
Slide 9: Sales by geography highlights
Twin Disc, Incorporated June 23, 2014 FY2013 FY2008 • Highlights: – More than 55% of sales were outside the USA in fiscal 2013 – Sales to Canada were nearly 13% in 2012 (oil & gas driven) – In 2012, Asia surpassed Europe as 2 nd largest end market (achieving record sales) – Sales to China have tripl
Slide 10: Managing Our Cost Structure
Twin Disc, Incorporated June 23, 2014 Managing Our Cost Structure CAPEX • Investing in core competencies • Expanding presence in low cost manufacturing locations • Nearly $100 million over past 9 yrs
Slide 11: Managing Our Cost Structure: Low Cost Locations
Twin Disc, Incorporated Low Cost June 23, 2014 Sourcing Offices Managing Our Cost Structure Lower Cost Corporate HQ/Mfg Mfg locations
Slide 12: What Differentiates Us? Technology
Twin Disc, Incorporated June 23, 2014 • Technology – Oil & Gas • 8500 Series – ARFF • “Pump & Roll” – Military • “Legacy” Contracts What Differentiates Us? – Marine • Patented QuickShift® • Dynamic Positioning/DPII • Rolla CFD
Slide 13: What Differentiates Us?
Twin Disc, Incorporated June 23, 2014 What Differentiates Us? • 96 Years of Proven Application Know-How • Niche Market Focus • Product/Market & Geographic Diversity • Core Manufacturing Capabilities Mfg location Co.-owned dist. 3 rd Party dist. Service dealers
Slide 14: Looking Ahead
Twin Disc, Incorporated June 23, 2014 Looking Ahead
Slide 15: Corporate Six Month Backlog
Twin Disc, Incorporated June 23, 2014 FY05 FY06 FY07 $ millions Corporate Six Month Backlog (Mfg Orders to be shipped in the next 6 months) FY08 FY09 FY11 FY10 FY12 FY13 FY14
Slide 16: Fiscal Year 2015 Outlook
Twin Disc, Incorporated June 23, 2014 Fiscal Year 2015 Outlook • North American Oil & Gas landscape causes near term outlook to be cautiously optimistic – Six-month backlog reflects recent increased demand from North American oil and gas market, which is expected to continue for the balance of calen
Slide 17: Fiscal Year 2015 Outlook
Twin Disc, Incorporated June 23, 2014 Fiscal Year 2015 Outlook • ARFF, Military and North American industrial markets are expected to remain stable • Global markets will remain mixed – European markets will remain challenged in the near term – Asia continues to offer significant opportunities for ab
Slide 18: Appendices
Twin Disc, Incorporated June 23, 2014 Appendices
Slide 19: Market Diversity: Pleasure Craft Market
Twin Disc, Incorporated Appendix I June 23, 2014 Corporate Profile - Market Diversity Pleasure Craft Market: • Target Markets: High speed planing and displacement yachts from 50’ to 150’, diesel-powered • Products: Transmissions, Surface Drives, Propellers, Steering/Thruster/Trim Systems, Controls,
Slide 20: Market Diversity: Work Boat Market
Twin Disc, Incorporated Appendix II June 23, 2014 Corporate Profile - Market Diversity Work Boat Market: • Target Markets: planing and displacement vessels from 30’ to 250’, diesel-powered • Products: Transmissions, Propellers, MCD’s, Water Jets, Controls • Channels: Engine OEMs & dealers, boat buil
Slide 21: Market Diversity: Patrol Boat Market
Twin Disc, Incorporated Appendix III June 23, 2014 Corporate Profile - Market Diversity Patrol Boat Market: • Target Markets: military, patrol and coast guard vessels from 30’ to 90’, diesel-powered • Products: Transmissions, Surface Drives, Propellers, Steering/Thruster/Trim Systems, Controls, EJS
Slide 22: Marine Transmissions, Propulsion & Boat Management Systems
Twin Disc, Incorporated Appendix IV June 23, 2014 QuickShift® Transmissions EJS®/Electronic Controls Bow Thrusters Anchor Winches Gangways Trim Tabs, Stern Thrusters Power Steering Marine Transmissions, Propulsion & Boat Management Systems Corporate Profile - Market Diversity We have been very succe
Slide 23: Market Diversity: Industrial Products
Twin Disc, Incorporated Appendix V June 23, 2014 Corporate Profile - Market Diversity Industrial Products: • Target Market: Heavy duty industrial disconnect applications • Products: Mechanical & hydraulic clutches, PTOs & pump mount drives, 100 - 2,500 HP • Channels: Distribution & OEMs • Customers:
Slide 24: Industrial Transmissions
Twin Disc, Incorporated Appendix VI June 23, 2014 Industrial Transmissions: • Target Market: Off-highway and all-terrain specialty vehicles, diesel powered • Products: Powertrain components - 400 to 3,000 HP • Channel: OEM vehicle mfrs. • Customers: BAE, Rosenbauer, Oshkosh, Tatra / BJ Services, Cis
Slide 25: Frac Rig Diagram
Twin Disc, Incorporated Engine Transmission Pump Appendix VII June 23, 2014 Frac Rig Diagram
Slide 26: Appendix VIII
Twin Disc, Incorporated Appendix VIII June 23, 2014 $ millions % sales * See Appendix XI for reconciliation of TTM figures to reported figures.
Slide 27: Non-GAAP Financial Disclosures
Twin Disc, Incorporated Appendix IX June 23, 2014 Non-GAAP Financial Disclosures Non-GAAP Financial Disclosures Financial information excluding the impact of certain significant items in this presentation are not measures that are defined in U.S. Generally Accepted Accounting Principles (“GAAP”). Th
Slide 28: Reconciliation of Net Earnings to EBITDA
Twin Disc, Incorporated Appendix X June 23, 2014 Reconciliation of Net Earnings to EBITDA * See Appendix XI for reconciliation of TTM figures to reported figures. NOTE: 2011 and 2012 fiscal year figures have been revised. See Footnote A in the Company’s Form 10K for the period ending June 30, 2013.
Slide 29: Reconciliation of TTM Data to Reported Quarterly Figures
Twin Disc, Incorporated Appendix XI June 23, 2014 Reconciliation of TTM Data to Reported Quarterly Figures NOTE: 2011 and 2012 fiscal year figures have been revised. See Footnote A in the Company’s Form 10K for the period ending June 30, 2013.
Slide 30: Fiscal Year Condensed Consolidated Statements of Operations
Twin Disc, Incorporated June 23, 2014 Appendix XII Fiscal Year Condensed Consolidated Statements of Operations NOTE: 2011 and 2012 fiscal year figures have been revised. See Footnote A in the Company’s Form 10K for the period ending June 30, 2013.
Slide 31: Historical Net Sales by Segment
Twin Disc, Incorporated June 23, 2014 Appendix XIII $317 $310 $332 $296 Historical Net Sales by Segment $228 $356 $285
Slide 32: Historical Net Earnings by Segment
Twin Disc, Incorporated June 23, 2014 Appendix XIV Historical Net Earnings by Segment (before Corporate Expense) NOTE: 2011 and 2012 fiscal year figures have been revised. See Footnote A in the Company’s Form 10K for the period ending June 30, 2013.
Slide 33: Fiscal Qtr Condensed Consolidated Statements of Operations
Twin Disc, Incorporated June 23, 2014 Appendix XV 3 rd Fiscal Qtr Condensed Consolidated Statements of Operations NOTE: 2011 and 2012 fiscal year figures have been revised. See Footnote A in the Company’s Form 10K for the period ending June 30, 2013.
Slide 34: First Nine Months: Condensed Consolidated Statements of Operations
Twin Disc, Incorporated Appendix XVI June 23, 2014 First Nine Months: Condensed Consolidated Statements of Operations NOTE: 2011 and 2012 fiscal year figures have been revised. See Footnote A in the Company’s Form 10K for the period ending June 30, 2013.
Slide 35: Operating Cash Flows - Fiscal Year
Twin Disc, Incorporated June 23, 2014 Appendix XVII $ millions % sales Operating Cash Flows - Fiscal Year * See Appendix X for reconciliation of TTM figures to reported figures.
Slide 36: Express Joystick System in Action
Twin Disc, Incorporated June 23, 2014 Express Joystick System® in Action Go to http://www.twindisc.com/MarineProducts/EJS.html to see the new revolutionary Twin Disc Express Joystick System® in action.