Twin Disc, Incorporated · NASDAQ:TWIN
Twin Disc — Investor Presentation (November 2013)
36 slides from Twin Disc's investor presentation, Nov 5, 2013
Slide 1: We Put Horsepower to Work
) es WE PUT HORSEPOWER TO WORK ™
Slide 2: Safe Harbor Statement
Twin Disc, Incorporated November 5, 2013 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 assump
Slide 3: Twin Disc At A Glance
Twin Disc, Incorporated November 5, 2013 • Founded in 1918 • Headquartered in Racine, WI • ≈ 990 employees (FYE ‘13) • 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., Belgium, Italy,
Slide 4: FY 2013 Highlights
Twin Disc, Incorporated FY 2013 Highlights November 5, 2013 • Sales down 20% from record FY ‘12 – Pressure pumping transmission business continued to slow down in North America, only partially offset by China market – Commercial marine business experienced strong demand in North America (Gulf Coast)
Slide 5: 1st Quarter Highlights
Twin Disc, Incorporated 1 st Quarter Highlights November 5, 2013 • Sales down 3% from Q1 of 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 $0.11 per diluted share, flat compared to Q1 of FY
Slide 6: Marine & Propulsion Systems
Twin Disc, Incorporated November 5, 2013 Marine & Propulsion Systems • Commercial Marine: – Achieved record sales in fiscal 2013, driven by strong demand in Asia and the US Gulf Coast – European market remains uncertain, likely 2-3 years to recover – Long term growth in Asia, Latin and North America
Slide 7: Land-Based Products: Transmission Systems
Twin Disc, Incorporated November 5, 2013 Land-Based Products Transmission Systems • Pressure Pumping: – Achieved record units sales in fiscal ‘12 – North American market saw significant decline in fiscal ‘13, that has continued into ‘14 – Asian market, driven by China, has partially offset North Ame
Slide 8: Land-Based Products: Pressure Pumping
Twin Disc, Incorporated June 25, 2013 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 9: Land-Based Products: Industrial Products
Twin Disc, Incorporated November 5, 2013 Land-Based Products Industrial Products • North America Energy Related: – After a strong fiscal 2012, shipments and orders were impacted by softness in oil & gas markets – Demand will grow as North American oil & gas market strengthens • Irrigation & Pumping
Slide 10: Corporate Profile - Geographic Diversity
Twin Disc, Incorporated November 5, 2013 Corporate Profile - Geographic Diversity Sales (as a % of total sales) 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
Slide 11: Managing Our Cost Structure
Twin Disc, Incorporated November 5, 2013 Managing Our Cost Structure CAPEX • Investing in core competencies • Expanding presence in low cost manufacturing locations • Nearly $100 million over past 9 yrs
Slide 12: Managing Our Cost Structure: Low Cost Locations
Twin Disc, Incorporated Low Cost November 5, 2013 Sourcing Offices Managing Our Cost Structure Lower Cost Corporate HQ/Mfg Mfg locations
Slide 13: What Differentiates Us? Technology
Twin Disc, Incorporated November 5, 2013 • Technology – Oil & Gas • 8500 Series – ARFF • “Pump & Roll” – Military • “Legacy” Contracts What Differentiates Us? – Marine • Patented QuickShift® • Dynamic Positioning/DPII • Rolla CFD
Slide 14: What Differentiates Us?
Twin Disc, Incorporated November 5, 2013 What Differentiates Us? • 95 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 15: Looking Ahead
Twin Disc, Incorporated Looking Ahead
Slide 16: Corporate Six Month Backlog
Twin Disc, Incorporated November 5, 2013 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 17: Fiscal Year 2014 Outlook
Twin Disc, Incorporated November 5, 2013 Fiscal Year 2014 Outlook • North American Oil & Gas landscape causes near term outlook to be cautious – Six-month backlog reflects continued weakness in demand from North American oil and gas market, which is expected to continue for the balance of fiscal 201
Slide 18: Fiscal Year 2014 Outlook
Twin Disc, Incorporated November 5, 2013 Fiscal Year 2014 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
Slide 19: Appendices
Twin Disc, Incorporated Appendices
Slide 20: Corporate Profile - Market Diversity: Pleasure Craft
Twin Disc, Incorporated Appendix I November 5, 2013 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, Control
Slide 21: Corporate Profile - Market Diversity: Work Boat
Twin Disc, Incorporated Appendix II November 5, 2013 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 b
Slide 22: Corporate Profile - Market Diversity: Patrol Boat
Twin Disc, Incorporated Appendix III November 5, 2013 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, E
Slide 23: Marine Transmissions, Propulsion & Boat Management Systems
Twin Disc, Incorporated Appendix IV November 5, 2013 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 su
Slide 24: Corporate Profile - Market Diversity: Industrial Products
Twin Disc, Incorporated Appendix V November 5, 2013 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 • Custome
Slide 25: Industrial Transmissions
Twin Disc, Incorporated Appendix VI November 5, 2013 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,
Slide 26: Frac Rig Diagram
Twin Disc, Incorporated Engine Transmission Pump Appendix VII November 5, 2013 Frac Rig Diagram
Slide 27: Appendix VIII
Twin Disc, Incorporated Appendix VIII November 5, 2013 $ millions % sales * See Appendix XI for reconciliation of TTM figures to reported figures.
Slide 28: Non-GAAP Financial Disclosures
Twin Disc, Incorporated Appendix IX November 5, 2013 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”).
Slide 29: Reconciliation of Net Earnings to EBITDA
Twin Disc, Incorporated Appendix X November 5, 2013 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, 201
Slide 30: Reconciliation of TTM Data to Reported Quarterly Figures
Twin Disc, Incorporated Appendix XI November 5, 2013 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 31: Fiscal Year Condensed Consolidated Statements of Operations
Twin Disc, Incorporated November 2013 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 32: Historical Net Sales by Segment
Twin Disc, Incorporated November 2013 Appendix XIII $317 $310 $332 $296 Historical Net Sales by Segment $228 $356 $285
Slide 33: Historical Net Earnings by Segment
Twin Disc, Incorporated November 2013 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 34: 1st Fiscal Quarter: Condensed Consolidated Statements of Operations
Twin Disc, Incorporated Appendix XV November 5, 2013 1 st Fiscal Quarter: 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 November 2013 Appendix XVI $ 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 November 5, 2013 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.