CEO Perspective Exhibit 99.1 Twin Disc Announces Third Quarter Results MILWAUKEE, Wis., April 30, 2024 (GLOBE NEWSWIRE) -- Twin Disc, Inc. (NASDAQ: TWIN), today reported results for the fiscal 2024 third quarter ended March 29, 2024. Fiscal Third Quarter 2024 Highlights "We continued our trend of solid performance in the third quarter as we captured healthy end market demand in an evolving environment. Through our focus on operational discipline and working capital management, we delivered margin expansion, ...

Twin Disc, Incorporated (NASDAQ:TWIN) Q2 2024 Results Conference Call February 7, 2024 9:00 AM ET Company Participants Jeff Knutson - VP of Finance, CFO, Treasurer and Secretary John Batten - CEO Conference Call Participants Simon Wong - Gabelli Funds Rand Gesing - Neuberger Operator Ladies and gentlemen, thank you for standing by. I would like to welcome everyone to the Twin Disc, Inc. Fiscal Second Quarter 2024 Conference Call. [Operator Instructions]. Thank you. I will now hand the call over to Mr. Jeff ...

For the quarter ended December 29, 2023 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 1-7635 TWIN DISC, INCORPORATED ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 Form 10-Q Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 ...

[Part I. FINANCIAL INFORMATION](index=2&type=section&id=Part%20I.%20FINANCIAL%20INFORMATION) [Financial Statements](index=2&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for Q1 FY2024, including balance sheet, operations, and cash flows, along with detailed notes on accounting policies and key financial items [Condensed Consolidated Financial Statements](index=2&type=section&id=Condensed%20Consolidated%20Financial%20Statements) Twin Disc reported Q1 FY2024 net sales of $63.6 million, a net loss of $1.17 million, and improved operating cash flow of $9.8 million Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | Sep 29, 2023 (in thousands) | June 30, 2023 (in thousands) | | :--- | :--- | :--- | | **Total Current Assets** | $209,208 | $219,706 | | **Total Assets** | $277,981 | $289,181 | | **Total Current Liabilities** | $92,218 | $100,095 | | **Total Liabilities** | $137,806 | $143,664 | | **Total Equity** | $140,175 | $145,517 | Condensed Consolidated Statement of Operations (in thousands, except per share data) | Metric | Q1 FY2024 (ended Sep 29, 2023, in thousands) | Q1 FY2023 (ended Sep 30, 2022, in thousands) | | :--- | :--- | :--- | | Net Sales | $63,554 | $55,913 | | Gross Profit | $16,637 | $13,297 | | Loss from Operations | $(280) | $(1,793) | | Net Loss Attributable to Twin Disc | $(1,173) | $(1,422) | | Diluted Loss Per Share | $(0.09) | $(0.11) | Condensed Consolidated Statement of Cash Flows (in thousands) | Cash Flow Activity | Q1 FY2024 (ended Sep 29, 2023, in thousands) | Q1 FY2023 (ended Sep 30, 2022, in thousands) | | :--- | :--- | :--- | | Net cash provided (used) by operating activities | $9,802 | $(696) | | Net cash used by investing activities | $(3,645) | $(1,701) | | Net cash provided by financing activities | $643 | $717 | | **Net change in cash** | **$7,165** | **$693** | [Notes to Condensed Consolidated Financial Statements](index=5&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) These notes detail significant accounting policies, including a pension plan accounting change, inventory write-downs, segment performance, debt compliance, and assets held for sale - The company changed its accounting method for pension and postretirement benefit plans to recognize actuarial gains and losses immediately above a **20% threshold**, rather than amortizing them, with this change applied retrospectively[14](index=14&type=chunk)[15](index=15&type=chunk) - In Q1 FY2024, the company recognized a total inventory write-down of **$3.7 million** (**$2.1 million** in Italy and **$1.6 million** in the U.S.) related to its boat management system product line[20](index=20&type=chunk) Net Sales by Segment (in thousands) | Segment | Q1 FY2024 Sales (in thousands) | Q1 FY2023 Sales (in thousands) | | :--- | :--- | :--- | | Manufacturing | $54,537 | $48,997 | | Distribution | $32,853 | $24,307 | - The company is in compliance with its debt covenants, which include maintaining a Total Funded Debt to EBITDA ratio not exceeding **3.50 to 1.00** and a Fixed Charge Coverage Ratio of at least **1.10 to 1.00**[50](index=50&type=chunk)[54](index=54&type=chunk) - The company is actively marketing its former corporate headquarters and, in Q1 FY2024, entered an agreement to sell certain assets of its boat management systems product line, reclassifying them to '**Assets Held for Sale**'[66](index=66&type=chunk)[69](index=69&type=chunk) [Management's Discussion and Analysis (MD&A)](index=24&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses a 13.7% increase in net sales, improved gross margin, positive free cash flow, and strengthened liquidity, driven by strong product and regional performance [Results of Operations](index=24&type=section&id=Results%20of%20Operations) Q1 FY2024 net sales increased 13.7% to $63.6 million, driven by marine and off-highway products and strong Asia Pacific/Europe sales, with gross margin improving to 26.2% Q1 FY2024 vs Q1 FY2023 Performance (in millions, except percentages) | Metric | Q1 FY2024 | Q1 FY2023 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $63.6M | $55.9M | +13.7% | | Gross Profit % | 26.2% | 23.8% | +2.4 p.p. | | Loss from Operations | $(0.3)M | $(1.8)M | +84.4% | - Sales growth was driven by strong performance in specific product lines and regions: - **Product Growth**: Marine/propulsion products (**+24.3%**), Off-highway transmission products (**+16.6%**) - **Regional Growth**: Asia Pacific (**+58.9%**), Europe (**+38.5%**) - **Decline**: Industrial products (**-19.1%**), North America sales (**-17.1%**)[97](index=97&type=chunk) - Gross margin improved to **26.2%**, and adjusted for a non-recurring **$3.1 million** inventory write-down, the gross profit percentage would have been **31.1%**[100](index=100&type=chunk) - The six-month order backlog increased to **$122.5 million** as of September 29, 2023, compared to **$108.9 million** at September 30, 2022[108](index=108&type=chunk) [Financial Condition, Liquidity and Capital Resources](index=26&type=section&id=Financial%20Condition%2C%20Liquidity%20and%20Capital%20Resources) The company's financial condition strengthened with increased cash, reduced net debt, positive free cash flow, and compliance with debt covenants, projecting $9-11 million in FY2024 capital expenditures - The company generated positive free cash flow of **$6.1 million** (defined as operating cash flow less acquisitions of fixed assets) during the quarter[111](index=111&type=chunk) Key Balance Sheet Changes (Sep 29, 2023 vs June 30, 2023, in millions) | Account | Change | Reason | | :--- | :--- | :--- | | Cash | +$7.2M | Positive free cash flow | | Inventories | -$5.7M | Asset sale and increased shipments | | Total debt, net of cash | -$4.2M | Improved to $1.2M from $5.4M | - As of September 29, 2023, the company had approximately **$27.0 million** of available borrowings under its Credit Agreement[57](index=57&type=chunk) - The company expects to invest between **$9 million** and **$11 million** in capital assets in fiscal 2024, focusing on modernizing manufacturing, assembly, and testing processes[109](index=109&type=chunk) [Quantitative and Qualitative Disclosure About Market Risk](index=28&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosure%20About%20Market%20Risk) The company, as a Smaller Reporting Company, has opted not to provide quantitative and qualitative disclosure about market risk - Due to its status as a **Smaller Reporting Company**, the company has opted out of providing the quantitative and qualitative disclosure about market risk[122](index=122&type=chunk) [Controls and Procedures](index=29&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that disclosure controls and procedures were effective as of September 29, 2023, with no material changes to internal control over financial reporting - The CEO and CFO concluded that the company's disclosure controls and procedures are **effective**[124](index=124&type=chunk) - **No material changes** were made to the company's internal control over financial reporting during the most recent fiscal quarter[125](index=125&type=chunk) [Part II. OTHER INFORMATION](index=29&type=section&id=Part%20II.%20OTHER%20INFORMATION) [Legal Proceedings](index=29&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in product liability claims, which are either insured or not considered material to its financial condition - Ongoing product liability claims are **not expected to have a material impact** on the company's financial condition, as they are either insured or the amounts are not deemed material[126](index=126&type=chunk) [Risk Factors](index=29&type=section&id=Item%201A.%20Risk%20Factors) No material changes have occurred to the risk factors previously disclosed in the company's 2023 Annual Report on Form 10-K - **No material changes** to the risk factors disclosed in the 2023 Annual Report on Form 10-K have occurred[127](index=127&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=29&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company did not sell unregistered equity or make open market purchases, but acquired 138,141 shares for tax obligations, with 315,000 shares authorized for repurchase - The company did not purchase any shares on the open market during the quarter, but **138,141 shares** were acquired from employees to cover withholding taxes on vested stock awards[131](index=131&type=chunk) - A board authorization to repurchase **315,000 shares** of common stock remains outstanding and has no expiration date[132](index=132&type=chunk) [Exhibits](index=31&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including CEO and CFO certifications required by Sarbanes-Oxley Act and Inline XBRL financial data - The exhibits include required **CEO and CFO certifications** under the **Sarbanes-Oxley Act** and interactive data files (**Inline XBRL**)[138](index=138&type=chunk)

Twin Disc, Incorporated (NASDAQ:TWIN) Q1 2024 Earnings Conference Call November 2, 2023 8:30 AM ET Company Participants Jeff Knutson - VP of Finance, CFO, Treasurer and Secretary John Batten - CEO Conference Call Participants Operator Ladies and gentlemen, thank you for standing by, and welcome to the Twin Disc, Inc. Fiscal First Quarter 2024 Conference Call. [Operator Instructions] Thank you. Jeff Knutson, you may begin your conference. Jeff Knutson Good morning, and thank you for joining us today to discu ...

Financial Performance - Net sales for fiscal 2023 increased by 14.0%, or $34.1 million, to $277.0 million from $242.9 million in fiscal 2022[76] - Gross profit improved by $5.5 million, or 8.0%, to $74.3 million, but gross profit as a percentage of sales decreased to 26.8% from 28.3%[81] - Distribution segment sales rose by 14.3%, or $15.2 million, with North American operations experiencing significant growth of 35.7%[78] - The manufacturing segment saw a sales increase of 12.2%, or $26.6 million, with the Veth propulsion operation in the Netherlands achieving a 17.1% increase despite a $3.2 million unfavorable currency translation impact[77] Order Backlog and Future Expectations - As of June 30, 2023, the backlog of orders was $119.2 million, an 18% increase from $101.2 million as of June 30, 2022[90] - The Company expects capital expenditures to be approximately $9 million to $11 million in fiscal 2024[104] Cash Flow and Working Capital - Net cash provided by operating activities totaled $22.9 million, an improvement of $31.2 million from the prior fiscal year[91] - Net working capital decreased by $3.8 million, or 3.0%, during fiscal 2023, with the current ratio decreasing from 2.5 to 2.2[103] - Cash of $13.3 million is primarily held at overseas operations, available for repatriation with some restrictions[102] Tax and Restructuring - The effective tax rate for fiscal 2023 was 26.2%, compared to 14.5% for fiscal 2022[88] - The Company incurred $0.2 million in restructuring charges during fiscal 2023, down from $1.0 million in fiscal 2022[85] Capital and Liquidity - The Company has 315,000 shares remaining under its authorized stock repurchase plan[94] - The Company had approximately $33.0 million of available borrowings under the Credit Agreement as of June 30, 2023[102] - The Company has no material off-balance-sheet arrangements and continues to maintain sufficient liquidity for near-term needs[102] Pension and Medical Claims - The Company anticipates contributing $0.6 million to its defined benefit pension plans in fiscal 2024, which is the minimum required contribution[102] - The Company expects to pay $0.7 million in postretirement medical claims in fiscal 2024 based on actuarial estimates[105] Trade Payables and Liabilities - Trade payables increased by $8.0 million and accrued liabilities by $11.0 million, driven by growing demand and supply chain imbalances[103] Borrowings and Agreements - The Company has entered into various agreements to secure borrowings, including pledging 100% of equity interests in certain domestic subsidiaries[98] - The Company has a full domestic valuation allowance of $22.3 million recognized as of June 30, 2023, due to the likelihood of not realizing deferred tax assets[118]

Twin Disc, Incorporated (NASDAQ:TWIN) Q4 2023 Earnings Call Transcript August 16, 2023 9:00 AM ET Company Participants Jeff Knutson - VP of Finance, CFO, Treasurer and Secretary John Batten - CEO Conference Call Participants Simon Wong - Gabelli Funds Operator Good day, and welcome to the Twin Disc Fiscal Fourth Quarter 2023 Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instruction ...

[Part I. FINANCIAL INFORMATION](index=2&type=section&id=Part%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=2&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for Twin Disc, Incorporated for the quarter ended March 31, 2023, including Balance Sheets, Statements of Operations and Comprehensive Income, and Statements of Cash Flows, with detailed notes [Condensed Consolidated Balance Sheets](index=2&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets increased to **$285.5 million** as of March 31, 2023, from **$276.5 million** at June 30, 2022, primarily driven by a **$9.0 million** increase in inventories, while total liabilities saw a slight increase to **$146.9 million**, and total equity grew by **$7.4 million** to **$138.6 million** over the same period Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2023 | June 30, 2022 | | :--- | :--- | :--- | | **Total Current Assets** | $215,949 | $204,452 | | Inventories | $136,153 | $127,109 | | **Total Assets** | **$285,513** | **$276,523** | | **Total Current Liabilities** | $88,612 | $81,078 | | Long-term debt, less current maturities | $29,276 | $34,543 | | **Total Liabilities** | **$146,894** | **$145,335** | | **Total Equity** | **$138,619** | **$131,188** | [Condensed Consolidated Statements of Operations and Comprehensive Income](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income) For the third quarter of fiscal 2023, net sales grew **24.4%** year-over-year to **$73.8 million**, and net income attributable to Twin Disc increased to **$2.7 million** from **$2.2 million**, while for the nine-month period, net sales rose **15.6%** to **$193.0 million**, with net income attributable to Twin Disc significantly improving to **$1.8 million** from **$0.3 million** in the prior year period Q3 Performance Comparison (in thousands, except per share data) | Metric | Q3 FY2023 | Q3 FY2022 | YoY Change | | :--- | :--- | :--- | :--- | | Net Sales | $73,772 | $59,289 | +24.4% | | Gross Profit | $19,265 | $17,691 | +8.9% | | Income from Operations | $4,605 | $3,055 | +50.7% | | Net Income Attributable to Twin Disc | $2,674 | $2,231 | +19.9% | | Diluted EPS | $0.20 | $0.17 | +17.6% | Nine-Month Performance Comparison (in thousands, except per share data) | Metric | Nine Months FY2023 | Nine Months FY2022 | YoY Change | | :--- | :--- | :--- | :--- | | Net Sales | $193,036 | $166,939 | +15.6% | | Gross Profit | $49,585 | $44,620 | +11.1% | | Income from Operations | $7,838 | $3,282 | +138.8% | | Net Income Attributable to Twin Disc | $1,785 | $316 | +464.9% | | Diluted EPS | $0.13 | $0.02 | +550.0% | [Condensed Consolidated Statements of Cash Flows](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the nine months ended March 31, 2023, net cash provided by operating activities was **$6.9 million**, a significant improvement from the **$7.2 million** used in the prior year period, with net cash from investing activities at **$0.6 million**, primarily from asset sales, and financing activities using **$6.2 million**, leading to a net increase in cash of **$1.5 million** Cash Flow Summary (in thousands) | Cash Flow Activity | Nine Months Ended Mar 31, 2023 | Nine Months Ended Mar 25, 2022 | | :--- | :--- | :--- | | Net cash provided (used) by operating activities | $6,859 | $(7,223) | | Net cash provided by investing activities | $593 | $7,746 | | Net cash (used) provided by financing activities | $(6,189) | $1,674 | | **Net change in cash** | **$1,503** | **$485** | [Notes to Condensed Consolidated Financial Statements](index=6&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes provide detailed disclosures on the basis of presentation, segment performance, debt structure, restructuring activities, and other key accounting policies, highlighting strong sales growth in both Manufacturing and Distribution segments, gains from asset sales as part of restructuring, and stable debt management under the amended credit facility - The company operates under two reportable segments: Manufacturing and Distribution. Both segments saw year-over-year sales growth for the quarter and nine-month periods[24](index=24&type=chunk)[26](index=26&type=chunk) - As part of its restructuring, the company sold a real estate property in Belgium during the second quarter of fiscal 2023, receiving **$7.15 million** in proceeds and recording a gain of **$4.16 million**[78](index=78&type=chunk) - The company's credit agreement was amended in June 2022, extending the maturity to June 2025 and replacing LIBOR-based rates with SOFR and EURIBO benchmarks[52](index=52&type=chunk)[54](index=54&type=chunk)[56](index=56&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the significant increase in net sales for both the third quarter and first nine months of fiscal 2023, driven by strong demand across most markets, particularly in North American oil and gas, which, despite supply chain challenges and inflationary pressures affecting gross margins, led to higher operating and net income, strengthening the company's financial condition with increased working capital, reduced net debt, and sufficient liquidity to fund future operations and capital expenditures [Results of Operations](index=26&type=section&id=Results%20of%20Operations) Q3 FY2023 net sales rose **24.4%** YoY to **$73.8 million**, driven by strong demand in marine, propulsion, and off-highway transmissions, especially in North America, though gross margin declined to **26.1%** from **29.8%** due to inflation; for the first nine months, sales grew **15.6%** to **$193.0 million**, with gross margin at **25.7%**, slightly down from **26.7%**, but an improvement from **25.5%** after adjusting for prior-year government subsidies - Q3 FY2023 net sales increased **24.4% ($14.5 million)** YoY, driven by strong demand in the North American oil and gas market and recovery across most sectors, despite ongoing supply chain challenges[100](index=100&type=chunk) Q3 FY2023 Sales Growth by Product/Region | Category | YoY Growth | | :--- | :--- | | Marine and propulsion products | +32.2% | | Off-highway transmission shipments | +21.7% | | Industrial products | -13.7% | | North American region | +33.9% | | Asia Pacific region | +43.1% | - Gross profit percentage for Q3 FY2023 declined to **26.1%** from **29.8%** in the prior year, primarily due to inflationary cost pressures of **$2.5 million**[103](index=103&type=chunk) - For the first nine months of FY2023, net sales increased **15.6% ($26.1 million)** YoY. Adjusting for prior-year COVID-19 relief subsidies, the gross profit margin improved from **25.5%** to **25.7%**[108](index=108&type=chunk)[111](index=111&type=chunk) [Financial Condition, Liquidity and Capital Resources](index=29&type=section&id=Financial%20Condition,%20Liquidity%20and%20Capital%20Resources) As of March 31, 2023, the company's financial condition improved, with net working capital increasing by **$3.9 million** to **$127.3 million** since June 30, 2022, total debt decreasing by **$5.3 million** to **$31.3 million**, and net debt (total debt less cash) improving by **$6.8 million** to **$17.3 million**, while maintaining adequate liquidity with **$20.8 million** available under its revolving credit facility and expecting capital expenditures of **$9 to $11 million** in fiscal 2023 - Inventories increased by **$9.0 million (7.1%)** to **$136.2 million** compared to June 30, 2022, mainly due to supply chain imbalances, though the inventory-to-backlog ratio improved[119](index=119&type=chunk) - The six-month order backlog grew to **$127.7 million** as of March 31, 2023, up from **$101.2 million** at June 30, 2022[119](index=119&type=chunk) - Total debt decreased by **$5.3 million** since June 30, 2022, with net debt improving by **$6.8 million** to **$17.3 million**, aided by positive free cash flow and proceeds from an asset sale[122](index=122&type=chunk) - The company has approximately **$20.8 million** of available borrowings under its credit facility and plans for **$9 to $11 million** in capital expenditures for fiscal 2023[124](index=124&type=chunk)[125](index=125&type=chunk) [Part II. OTHER INFORMATION](index=31&type=section&id=Part%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=31&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in several product liability claims, which are considered either adequately covered by insurance or not material to its financial condition - The Company is a defendant in several product liability or related claims which are considered either adequately covered by appropriate liability insurance or involving amounts not deemed material[134](index=134&type=chunk) [Item 1A. Risk Factors](index=31&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's 2022 Annual Report on Form 10-K - No material changes to risk factors have occurred since the 2022 Annual Report on Form 10-K[135](index=135&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=31&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company did not sell any unregistered equity securities during the quarter, and no shares were repurchased during the quarter ended March 31, 2023, with **315,000 shares** remaining authorized for purchase under existing plans - The company did not purchase any of its common stock during the quarter ended March 31, 2023[138](index=138&type=chunk) - As of March 31, 2023, **315,000 shares** remain authorized for repurchase under the company's existing programs[138](index=138&type=chunk) [Item 4. Controls and Procedures](index=30&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of the end of the period, with no material changes made to internal control over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures are effective as of the end of the reporting period[132](index=132&type=chunk) - No changes were made during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[133](index=133&type=chunk)

Financial Data and Key Metrics Changes - Sales for Q3 2023 reached $73.8 million, a 24.4% increase year-over-year, driven by strong demand across end markets [16] - Net income attributable to Twin Disc was $2.7 million or $0.20 per diluted share, compared to $2.2 million or $0.17 per diluted share in Q3 of fiscal '22, reflecting a 20% year-over-year improvement [16] - Gross margin decreased to 26.1%, down 370 basis points from the prior year, primarily due to a noncash LIFO charge related to inventory [17] Business Line Data and Key Metrics Changes - Marine and Propulsion Systems and Land-Based Transmissions both experienced double-digit growth sequentially and year-over-year, while the Industrial Product Group maintained sales in line with expectations [16] - The backlog reached its highest level in over four years, indicating strong demand and improved operational execution [10][12] Market Data and Key Metrics Changes - North America and Asia Pacific regions saw year-over-year and sequential sales increases, largely due to efforts to diversify the Veth business beyond Northern Europe [17] - The oil and gas sector contributed approximately 25% to 30% of total revenue for the quarter, with more than half of that being aftermarket sales [20][21] Company Strategy and Development Direction - The company aims to be a leading provider of hybrid and electric solutions for marine and off-highway land-based applications, focusing on controls and systems integration for greater sales and margin opportunities [12] - Capital allocation priorities include reducing net debt, resuming dividends only after establishing a track record of free cash flow generation, and pursuing bolt-on or transformational acquisitions [13][14] Management Comments on Operating Environment and Future Outlook - Management noted that supply chain headwinds are moderating, and they are actively working to resolve component shortages [20] - The company expects to achieve revenues of approximately $400 million with gross margins of 30% over the next 3 to 5 years, driven by hybrid and electrification opportunities [19] Other Important Information - The company generated nearly $7 million in cash from operations during the quarter [6] - Despite commodity pricing trends downward, raw material costs have not decreased, and the company has implemented pricing actions to protect margins [15] Q&A Session Summary Question: How much revenue was generated from the oil and gas business in the quarter? - The oil and gas business contributed approximately 25% to 30% of total revenue for the quarter [20] Question: What is the breakdown between new equipment and consumables or aftermarket in the oil and gas sector? - The breakdown is approximately 60% aftermarket and 40% new equipment, with most new equipment headed to Asia [21] Question: Are customers continuing activity in light of recent oil price volatility? - There has been no slowdown in rebuild activity; customers are actively looking to rebuild or replace equipment [23] Question: What was the size of the offshore business during the last up-cycle? - The offshore business historically accounted for about 10% of total revenue at its peak [24] Question: Are there any new products in the pipeline that the company is excited about? - The company is seeing traction in industrial products and hybrid/electrification applications, with several exciting projects in development [25]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 Form 10-Q TWIN DISC, INCORPORATED (Exact name of registrant as specified in its charter) Wisconsin 39-0667110 (State or other jurisdiction of (I.R.S. Employer Incorporation or organization) Identification No.) 1328 Racine Street, Racine, Wisconsin 53403 (Address of principal executive offices) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarter ended December 30, 2022 ☐ TRANSITION RE ...