Twin Disc Reports 14.7% Revenue Growth, Net Loss in Q1 2025

As of September 27, 2024, Twin Disc, Incorporated reported total current assets of $230.2 million, up from $219.6 million on June 30, 2024. Total assets increased to $323.5 million, compared to $312.1 million in the prior period. Current liabilities rose to $103.4 million from $99.5 million, while long-term debt increased to $27.8 million from $23.8 million. Total liabilities were $165.5 million, up from $157.0 million, and retained earnings decreased to $126.3 million from $129.6 million. Total shareholders' equity rose to $157.5 million from $154.7 million.

For the quarter ended September 27, 2024, net sales reached $72.9 million, a 14.7% increase from $63.6 million in the same quarter of the previous year. Gross profit also improved to $19.3 million, representing 26.5% of net sales, compared to $16.6 million or 26.2% in the prior year. However, the company reported a net loss of $2.8 million, worsening from a loss of $1.1 million in the same quarter last year. The loss before income taxes increased to $2.1 million from $537,000.

The acquisition of Katsa Oy, completed on May 31, 2024, contributed $9.2 million to revenue in Q1 2025. However, the company faced a revenue reduction of $1.8 million from the sale of a boat management system product line. The remaining revenue increase of $1.9 million was attributed to growth in Veth propulsion systems and improved performance from European and Australian distribution entities.

Sales in the manufacturing segment increased by 14.8%, while distribution segment sales decreased by $2.6 million (7.8%). The European region saw a revenue increase of $7.7 million (35.6%) primarily due to the Katsa acquisition, while North American sales decreased by 5.6% and Asia Pacific sales declined by 15.3%.

The company recognized inventory write-downs totaling $3.7 million related to the boat management system product line. Cash at the end of the period was $16.7 million, down from $20.4 million a year earlier. The backlog of orders increased to approximately $144.3 million, up from $133.7 million at the end of June 2024.

Operating expenses rose by 15.2% to 26.7% of sales, and interest expense increased due to a higher average outstanding balance following the Katsa acquisition. The effective tax rate for the quarter was (29.2%), compared to (101.9%) in the previous year. The company expects to invest between $13 million and $15 million in capital assets in fiscal 2025, focusing on modernizing manufacturing and improving efficiencies.