Twin Disc Inc (TWIN, Financial), a leader in marine and heavy-duty off-highway power transmission equipment, disclosed its financial results for the third quarter of fiscal year 2024 on April 30, 2024. The company's detailed performance was revealed in its 8-K filing. Key highlights include a slight increase in sales and a stronger net income compared to the same period last year, alongside significant improvements in cash flow and debt reduction.
Financial Performance Overview
For the quarter ended March 29, 2024, Twin Disc reported sales of $74.2 million, a modest rise of 0.5% from $73.8 million in the prior year. This growth was primarily driven by robust demand in the Marine and Propulsion Systems market, despite mixed performance across geographical regions. The company's net income attributable to Twin Disc was $3.8 million, or $0.27 per diluted share, up from $3.3 million, or $0.24 per share, in the fiscal third quarter of 2023.
The gross margin improved notably to 28.2%, reflecting a 210 basis point increase, thanks to prior pricing actions and a favorable product mix. This margin expansion contributed to a gross profit of $20.9 million, up 8.7% year-over-year. However, marketing, engineering, and administrative expenses also rose by 17.6% to $17.2 million, largely due to investments in hybrid electric strategy and inflationary pressures.
Strategic Moves and Operational Highlights
John H. Batten, President and CEO of Twin Disc, emphasized the company's operational discipline and capital management strategies that have led to improved margins and strong EBITDA generation. The quarter also marked a strategic expansion with the acquisition of Katsa Oy, aiming to enhance Twin Disc's global footprint and product offerings in industrial, marine, and hybrid/electrification markets.
The company's financial health was further highlighted by a robust operating cash flow of $22.3 million for the year to date, a significant increase from $6.9 million in the previous year. Free cash flow also improved dramatically to $14.7 million from a breakeven point last year. These factors have contributed to a solid balance sheet with a net debt reduction of $24.1 million, positioning the company well for future growth and shareholder value creation.
Future Outlook and Analyst Commentary
Looking ahead, Twin Disc appears well-positioned to continue its growth trajectory. The company's backlog of orders stands at $130.5 million, promising a steady flow of future revenues. Management's focus on reducing inventory further and enhancing cash generation could provide additional financial flexibility.
Jeffrey S. Knutson, CFO of Twin Disc, noted the ongoing improvements and potential for enhanced cash generation, indicating a strong end to the fiscal year and optimism for the company's strategic and financial goals.
Twin Disc will host a conference call to discuss these results and provide further insights into its operations and outlook, underscoring its commitment to transparency and stakeholder communication.
Conclusion
With a strategic acquisition, improved financial metrics, and a strong order backlog, Twin Disc Inc continues to navigate the complexities of the global market while positioning itself for sustainable long-term growth. Investors and stakeholders may look forward to the company's continued progress in operational efficiency and market expansion.
For more detailed information and analysis, interested parties are encouraged to review the full 8-K filing and tune into the upcoming earnings call.
Explore the complete 8-K earnings release (here) from Twin Disc Inc for further details.
