Twin Disc, Incorporated · NASDAQ:TWIN
Twin Disc — Q3 FY2024 Earnings Presentation
20 slides from Twin Disc's earnings presentation, Apr 30, 2024
Slide 1: Twin Disc, Inc Investor Presentation
ae TWIN DISC, INC Investor Presentation
Slide 2: Disclosures
DISCLOSURES c> Sale Harbor Statement This presentation contains statements that are faward ooking wih the meaning of Secton 21 of he Secures Exchange Actof 1934, as amended. These siemens te based nmenaganerscurertexpedsors hal at besedonxsunpors alae sue tsk endunctanies, Actua results may vary bec
Slide 3: Third Quarter Highlights
THIRD QUARTER HIGHLIGHTS c> = = Q3 sales +0.5% vs. YA to $74.2 million = Gross margin increased ~210 bpsvs. YA to 28.2% = EBITDA of $7.0 million (net income of $3.5) vs. $7.0 million (net income of $3.3) YA * Robust operating cash flow of $22.3 million YTD; free cash flow of $14.7 million YTD —_ = I
Slide 4: Marine & Propulsion
MARINE & PROPULSIO! = Increased sales by 3% vs. YA * Global commercial markets show sustained activity, fostering robust demand = Government defense spending surge fueling growth, particularlyin patrol boat projects * Veth six-month backlog increased 16% sequentially = Resulting in the recent Veth i
Slide 5: Land-Based Transmissions
ND-BASED TRANSMISSIONS = Decreased sales 2.5% vs. YA * Oil & Gas exports to Asia were flat = Initial orders secured in North America for Oil & Gas units signifying market penetration = Expansion in backlog fueled by ARFF transmissions demand
Slide 6: Industrial
INDUSTRIA| * Decreased sales 15% vs. YA = Ongoing softness amongst key industrial customers * Continuedweakness primarily for commoditized products; higher-content products showing resilience * Ongoing progress in advancing OEM partnerships
Slide 7: Continued Backlog Growth
CONTINUED BACKLOG GROWTH BACKLOG AND INVENTORY % OF BACKLOG + 6-month backlog continuing to increase on sequential and year-over-year basis + Expecting additional inventory reductions in 4Q 2024 as backlog is worked through sors aap23 r0F28 20828 sar2 mm Bochog (SMM) inventory (% Backlog) ‘Nev: Boci
Slide 8: Long-Term Strategy
LONG-TERM STRATEGY Leading Hybrid/Electric solution provider for niche marine and land-based applications Continued expansion of Veth Rationalize global footprint product to reach new for efficiency and customer markets and geographies response Increased focus on controls and system integration rath
Slide 9: Financial Overview
FINANCIAL OVERVIEW
Slide 10: Financial Performance
FINANCIAL PERFORMANCE ‘SALES Bam se39 $38 | sar san EARNINGS PER SHARE 5052 $028 30R23 40923 $636 s0R8 $730 nan 20824 sma 3082 $027 30F28 Generally stable demand across global markets Capitalizing on realization of price increases Increase in earnings vs YA due to strong operational execution Increa
Slide 11: Sales Diversity
SALES DIVERSITY SALES BY PRODUCT GROUP Banned SALES MIX BY GEOGRAPHY 30 337 2, fo 528 $65 ss nos 303 aarts narra lnntarine & Propuion ystems m Land. Based Teansmissions 30R23 R23 10R28 20828 North America mEurope mAsioPaciie mOther sare Continued strength within Marine and Propulsion Systems and Lan
Slide 12: Strong Balance Sheet
STRONG BA BALANCE SHEET Bantid $313 il EBITDA LANCE SHEET ol a 303 sar $260 s234 s0F23 em sor2uum™ CD 3 LEVERAGE RATIO. 07 s0R23 2
Slide 13: Margins & Near-Term Expectations
MARGINS & NEAR-TERM EXPECTATIONS ‘TWIN DISC GROSS MARGIN 261% 30823 sans THIRD QUARTER GROSS PROFIT BY PRODUCT GROUP ‘mMaxine & Propulsion Stems Land-BacedTranamisions m Industral w Other THIRD QUARTER GROSS MARGIN DRIVERS + Gross margin increased 210 basis points vs. YA = Capturing tailwinds from p
Slide 14: Capital Allocation Framework
CAPITAL ALLOCATION FRAMEWORK Debt Reduction Return Capital to Shareholders (Dividends) Organic Growth Investments Bolt-On & Transformational Acquisitions Return Capital to Shareholders (Share Repurchases) Focus Areas Research& Development Geographic diversification / expansion Marketing Strategic Fi
Slide 15: Continued trend of outperformance in Q3
=> = Continued trend of outperformance in Q3 highlighted by margin expansion and robust cash generation = Strengthened balance sheet, supported by consistent profitable growth, providing flexibility to pursue strategic growth opportunities as part of balanced capital allocation approach = Maintainin
Slide 16: Q&A
Q&A Fiscal 2024 Third Quarter Earnings Call 16
Slide 17: Appendix
APPENDIX fons
Slide 18: Reconciliation of Non-GAAP Financial Measures
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO REPORTED FINANCI. MEASURES RECONCILIATION OF TOTAL DEBT TONETDEBT (Inthousends; unaudited) March29, 2028 March 31,2023 Current maturities of fong-term debt 2,000 2,000 Long-termdebt 15,082 29,276 Total debt suz082 931276 Less cash 23,883 18,028 Netdeb
Slide 19: Reconciliation of Non-GAAP Financial Measures
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO REPORTED FINANCIAL MEASURES RECONCILIATION OF CONSOLIDATED NETINCOME TO EBITDA (ln thousands; unaudited) sarzs.ura 20828 0 F2 suoase soa $10,300 $910 stam) Income taxexpense 4085 $25,939 $6957 25781 $5515 $2260 0r23 $75 1438 susa08 saf23 sam $7001 19
Slide 20: Reconciliation of Non-GAAP Financial Measures
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO REPORTED FINANCIAL MEASURES NET DEBT TO EBITDALEVERAGE RATIO CALCULATION 30824 30823 ‘Net debt ($6,801) EBITDA (LTM) Leverage Ratio $17,252 23,360 07 20