Twin Disc Announces Second Quarter Results

Core Insights - Twin Disc, Inc. reported a strong fiscal second quarter 2025 with a 23.2% year-over-year increase in sales to $89.9 million, driven by the acquisition of Katsa Oy and strong demand in the marine and industrial segments [4][7] - The company is focusing on strategic priorities and operational efficiencies to enhance its business and capitalize on growth opportunities in hybrid and electric solutions [3][10] Financial Performance - Sales increased by 23.2% year-over-year to $89.9 million, with organic sales growth of 10.1% [4][7] - Gross profit rose 5.0% to $21.7 million, but gross margin decreased by approximately 420 basis points to 24.1% due to inventory write-downs and unfavorable product mix [5] - Net income attributable to Twin Disc was $0.9 million, consistent with the previous year, while EBITDA increased 13.5% to $6.3 million [8][7] Product Segment Performance - Marine and Propulsion Systems sales increased by 23.9% to $56.7 million, while Industrial segment sales surged by 44.8% to $9.5 million [4] - The Land-Based Transmissions segment also saw a 19.8% increase in sales [4] Geographic Sales Distribution - The company experienced double-digit growth in both European and North American regions, with a shift in sales distribution favoring Europe and a decline in the Asian Pacific region [4] Operational Metrics - The backlog of orders to be shipped over the next six months is approximately $124.0 million, supported by strong ongoing order activity [9] - Cash decreased by 24.3% to $15.9 million, while total debt increased by 40.5% to $24.9 million, primarily due to the Katsa acquisition [9] Management Commentary - The CEO highlighted the stable marine market and the recovery in the industrial segment, while also acknowledging ongoing challenges in the Asian oil and gas markets [2][3] - The CFO noted near-term pressure on margins due to product mix and charges associated with the Katsa acquisition, but expressed confidence in the company's financial position and operational priorities [10]