Twin Disc(US:TWIN)2023-09-08 12:15Financial 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]