Slide 1: We Put Horsepower to Work
Twin Disc, Incorporated WE PUT HORSEPOWER TO WORK ™
Slide 2: Safe Harbor Statement
Twin Disc, Incorporated 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 su
Slide 3: Twin Disc At A Glance
Twin Disc, Incorporated Twin Disc At A Glance • Founded in 1918 • Headquartered in Racine, WI • ≈913 employees (FYE „10) • TTM Revenues of $277M FY10 Revenues of $228M FY09 Revenues of $296M 2 1 1 FY08 Revenues of $332M • We are a global company 2 1 – Well-known customers around the world – Mfg Oper
Slide 4: FY 2010 Financial Highlights
Twin Disc, Incorporated FY 2010 Financial Highlights $ millions • Quarterly sequential sales & $70 $55.2 $61.0 $64.3 earnings improvement $50 $47.1 – Despite challenges, profitable for $30 the full fiscal year $10 • Key Markets -$10 Q1 Q2 Q3 Q4 – Mega Yacht and European markets Sales remained soft t
Slide 5: FY 2010 Financial Highlights
Twin Disc, Incorporated FY 2010 Financial Highlights $ millions $15 $12.0 • Generated $35 million of cash $10 $8.5 from operating activities $7.5 $7.1 $5 • Reduced debt by $19.6 million, or 39% $0 Q1 Q2 Q3 Q4 – Cash also increased $5.8 million, or 44%, to $19.0 million Operating Cash Flow $ millions
Slide 6: Net Sales & Net Earnings
Twin Disc, Incorporated Net Sales & Net Earnings $ millions (First Nine Months) $250 $213 • Sales up 31% $163 $200 – Oil & gas markets strong $150 – Experienced continued softness in $100 mega yacht and European markets $50 – Prior year: seasonal and temporary $0 FY10 FY11 plant shutdowns impacted Q
Slide 7: Marine & Propulsion Systems
Twin Disc, Incorporated Marine & Propulsion Systems • Pleasure Craft market continues soft worldwide – However, building share of market with new technology • Work Boat market steady – Europe soft – North America showing improvement – Asia-Pacific moderating • Patrol Boat market experiencing global
Slide 8: Land-Based Products
Twin Disc, Incorporated Land-Based Products • Industrial markets showing modest growth – Agriculture, irrigation, recycling and construction • ARFF and Military holding steady – ARFF: Continue to increase market share with „pump & roll‟ transmissions • Oil & Gas markets picking up – Orders increasin
Slide 9: Corporate Profile – Geographic Diversity
Twin Disc, Incorporated Corporate Profile – Geographic Diversity 37% Rest of 52% World USA 35% 52% 11% 13% Italy 2006 2010 48% International Sales 65% International Sales 9 April 27, 2011
Slide 10: Managing Our Cost Structure
Twin Disc, Incorporated Managing Our Cost Structure CAPEX • Investing in core competencies • Spent over $64 million over past 6 yrs 10 April 27, 2011
Slide 11: Managing Our Cost Structure
Twin Disc, Incorporated Managing Our Cost Structure Low Cost Lower Cost Sourcing Offices Corporate HQ/Mfg Mfg locations 11 April 27, 2011
Slide 12: What Differentiates Us?
Twin Disc, Incorporated What Differentiates Us? • Technology – Oil & Gas – Marine • 8500 Series • Patented QuickShift® • 7500 Series – new in Fiscal 2011 • Express Joystick System® – new in Fiscal 2011 – ARFF • Dynamic Positioning/DPII • “Pump & Roll” • Rolla CFD – Military • “Legacy” Contracts 12 A
Slide 13: What Differentiates Us?
Twin Disc, Incorporated What Differentiates Us? • 92+ Years of Proven Application Know-How • Niche Market Focus # Mfg location Co.-owned dist. 3rd Party dist. Service dealers • Global Distribution and Service Network • Product/Market & Geographic Diversity • Core Manufacturing Capabilities 13 April
Slide 14: Looking Ahead
Twin Disc, Incorporated Looking Ahead
Slide 15: Corporate Six Month Backlog
Twin Disc, Incorporated Corporate Six Month Backlog (Mfg Orders to be shipped in the next 6 months) $ millions $160 $140 $140 $126 $118 $120 +131% $100 $86 $82 $73 $80 $66 $61 $60 $52 $40 $20 $0 S D M J S D M J S D M J S D M J S D M J S D M J S D M J S D M FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 15
Slide 16: Fiscal Year 2011/12 Outlook
Twin Disc, Incorporated Fiscal Year 2011/12 Outlook • Mega Yacht & Europe – weakness expected to continue, modest growth off historic lows expected • Industrial, ARFF & Military will remain stable, modest growth • Oil & Gas – experiencing strong growth in demand • Patrol Boat market expanding • Asia
Slide 17: We Put Horsepower to Work
Twin Disc, Incorporated WE PUT HORSEPOWER TO WORK ™
Slide 18: Appendices
Twin Disc, Incorporated Appendices
Slide 19: Corporate Profile – Market Diversity: Pleasure Craft
Twin Disc, Incorporated Appendix I 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, Water Jets, Control Syst
Slide 20: Corporate Profile – Market Diversity: Work Boat
Twin Disc, Incorporated Appendix II 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 builders & distrib
Slide 21: Corporate Profile – Market Diversity: Patrol Boat
Twin Disc, Incorporated Appendix III 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, Water Jets, Controls, EJS •
Slide 22: Marine Transmissions, Propulsion & Boat Management Systems
Twin Disc, Incorporated Appendix IV Corporate Profile – Market Diversity Marine Transmissions, Propulsion & Boat Management Systems EJS®/Electronic Controls Anchor Winches Power Steering QuickShift® Transmissions Gangways Bow Thrusters Trim Tabs, Stern Thrusters Arneson Surface Drives, Rolla Propell
Slide 23: Corporate Profile – Market Diversity: Industrial Products
Twin Disc, Incorporated Appendix V 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: Bandit, Morba
Slide 24: Corporate Profile – Market Diversity: Industrial Transmissions
Twin Disc, Incorporated Appendix VI Corporate Profile – Market Diversity 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, T
Slide 25: EBITDA
Twin Disc, Incorporated Appendix VII EBITDA (See Appendices VIII & IX for note on non-GAAP Financial Disclosures and a $ millions % sales reconciliation of net earnings to EBITDA) $50 14.0% 16% 13.9% $46.1 14% $44.5 $40 12.5% 12.5% 10.2% 12% $34.6 10% $30 $30.5 $33.0 6.0% 8% 7.4% $20 6% $16.2 4% $13
Slide 26: Non-GAAP Financial Disclosures
Twin Disc, Incorporated Appendix VIII 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”). These items ar
Slide 27: Reconciliation of Net Earnings to EBITDA
Twin Disc, Incorporated Appendix IX Reconciliation of Net Earnings to EBITDA in $ thousands, except % data TTM 2010 2009 2008 2007 2006 2005 Net Earnings $ 13,278 $ 597 $ 11,502 $ 24,252 $ 21,852 $ 14,453 $ 6,910 Income Taxes 10,094 992 6,257 10,904 12,273 8,470 2,485 Interest Expense 1,770 2,282 2,
Slide 28: Reconciliation of TTM Data to Reported Quarterly Figures
Twin Disc, Incorporated Appendix X Reconciliation of TTM Data to Reported Quarterly Figures Q4 10 FY 10** Q1 11* Q2 11* Q3 11* TTM Sales $ 64,313 $ 227,534 $ 61,395 $ 75,160 $ 76,471 $ 277,339 Gross Profit 19,426 60,465 20,023 23,757 27,782 90,988 Operating Income 4,274 3,085 5,246 5,118 10,728 25,3
Slide 29: Fiscal Year Condensed Consolidated Statements of Operations
Twin Disc, Incorporated Appendix XI Fiscal Year Condensed Consolidated Statements of Operations ($ thousands, per Form 10-K) 2010 2009 2008 2007 2006 Sales $ 227,534 $ 295,618 $ 331,694 $ 317,200 $ 243,287 Gross Profit 60,465 81,443 104,868 102,909 74,390 26.6% 27.6% 31.6% 32.4% 30.6% MEA Expense 56
Slide 30: 3rd Fiscal Qtr Condensed Consolidated Statements of Operations
Twin Disc, Incorporated Appendix XII 3rd Fiscal Qtr Condensed Consolidated Statements of Operations ($ thousands, unaudited) 2011 2010 2009 2008 2007 Sales $ 76,471 $ 60,977 $ 69,292 $ 85,838 $ 86,405 Gross Profit 27,782 16,505 19,151 26,627 28,185 36.3% 27.1% 27.6% 31.0% 32.6% MEA Expense 17,054 14
Slide 31: YTD Condensed Consolidated Statements of Operations
Twin Disc, Incorporated Appendix XIII YTD Condensed Consolidated Statements of Operations (first nine months of the fiscal year) ($ thousands, unaudited) 2011 2010 2009 2008 2007 Sales $ 213,026 $ 163,220 $ 223,562 $ 241,345 $ 226,418 Gross Profit 71,562 41,038 62,176 75,823 72,887 33.6% 25.1% 27.8%
Slide 32: Net Sales by Segment
Twin Disc, Incorporated Appendix XIV Net Sales by Segment $332 $350 $317 $296 $300 $98 $243 $87 $228 $250 $91 $213 $200 $69 $85 $80 $150 $230 $234 $100 $205 $174 $143 $133 $50 $0 FY06 FY07 FY08 FY09 FY10 YTD 11 (9 months) Manufacturing Distribution 32 April 27, 2011
Slide 33: Net Earnings by Segment (before Corporate Expense)
Twin Disc, Incorporated Appendix XV Net Earnings by Segment (before Corporate Expense) $50 $6 $40 $6 $30 $7 $20 $4 $40 $6 $32 $25 $10 $19 $17 $5 $0 $0 FY06 FY07 FY08 FY09 FY10 YTD 11 (9 months) Manufacturing Distribution 33 April 27, 2011
Slide 34: Operating Cash Flows – Fiscal Year
Twin Disc, Incorporated Appendix XVI Operating Cash Flows – Fiscal Year $ millions % sales 15.4% $40 16% $35 14% $30 12% $25 10% $20 7.5% 8% $35.1 5.8% 6.0% $15 5.5% 6% 3.9% $10 $18.3 $17.5 $19.9 4% $16.1 $5 $11.6 2% $0 0% FY06 FY07 FY08 FY09 FY10 TTM Cash Flows from Operations % of Sales 34 April 2
Slide 35: Express Joystick System in Action
Twin Disc, Incorporated 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. 35 April 27, 2011
Slide 36: We Put Horsepower to Work
Twin Disc, Incorporated WE PUT HORSEPOWER TO WORK ™