Twin Disc, Inc. Announces Fiscal 2012 First Quarter Financial Results
-
Fiscal 2012 First Quarter Record Net Earnings of
$0.83 per Diluted Share - Fiscal 2012 First Quarter Sales Up 32.5% Year-Over-Year
- Six-Month Backlog Up 12.0% Sequentially to an All-Time Record
- Management Optimistic For Fiscal 2012
Sales for the fiscal 2012 first quarter, seasonally the weakest quarter
of the fiscal year, improved to
Gross margin for the fiscal 2012 first quarter was a record 37.8 percent, compared to 32.6 percent in the fiscal 2011 first quarter. The significant improvement in fiscal 2012 first-quarter gross margin was the result of continuing increased sales volumes, improved manufacturing efficiency and absorption, and a more profitable mix of business.
For the fiscal 2012 first quarter, marketing, engineering and
administrative (ME&A) expenses, as a percentage of sales, were 19.6
percent, compared to 24.1 percent for the fiscal 2011 first quarter.
ME&A expenses increased
Other income of
The effective tax rate for the fiscal 2012 first quarter was 35.3 percent, compared to the prior year's tax rate of 36.6 percent. The current year rate benefits from a higher estimated Section 199 (domestic production activities) deduction.
Net earnings attributable to
Earnings before interest, taxes, depreciation and amortization (EBITDA)*
was
Commenting on the results,
"We are pleased to have announced our strategic partnership with Caterpillar in the pleasure craft market to develop our Joystick technology solutions for vessels that use a standard conventional shaft arrangement and vessels that will utilize a future innovative Cat POD system which will incorporate Twin Disc's patented QuickShift® transmission technology. Leveraging our new transmission and controls technology through Caterpillar's sales and marketing and distribution channels should provide substantial growth opportunities in the coming years as the pleasure craft market continues its recovery."
"Fiscal 2012 is off to a great start, as we are executing our business
initiatives and capitalizing on encouraging market demand. We expect
fiscal 2012 to be another strong year," concluded
The conference call will also be broadcast live over the Internet. To
listen to the call via the Internet, access
About
Forward-Looking Statements
This press release may contain statements that are forward looking as
defined by the
*Non-GAAP Financial Disclosures
Financial information excluding the impact of foreign currency exchange rate changes and the impact of acquisitions, if any, in this press release are not measures that are defined in U.S. Generally Accepted Accounting Principles ("GAAP"). These items are measures that management believes are important to adjust for in order to have a meaningful comparison to prior and future periods and to provide a basis for future projections and for estimating our earnings growth prospects. Non-GAAP measures are used by management as a performance measure to judge profitability of our business absent the impact of foreign currency exchange rate changes and acquisitions. Management analyzes the company's business performance and trends excluding these amounts. These measures, as well as EBITDA, provide a more consistent view of performance than the closest GAAP equivalent for management and investors. Management compensates for this by using these measures in combination with the GAAP measures. The presentation of the non-GAAP measures in this press release are made alongside the most directly comparable GAAP measures.
Definition — Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA)
The sum of, net earnings and adding back provision for income taxes, interest expense, depreciation and amortization expenses: this is a financial measure of the profit generated excluding the above mentioned items.
--Financial Results Follow--
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
INCOME
(In thousands, except per-share data; unaudited) |
||||||||
Three Months Ended |
||||||||
September 30, 2011 |
September 24,
2010 |
|||||||
Net sales | $ | 81,330 | $ | 61,395 | ||||
Cost of goods sold | 50,562 | 41,372 | ||||||
Gross profit | 30,768 | 20,023 | ||||||
Marketing, engineering and administrative expenses |
15,909 |
14,777 |
||||||
Earnings from operations | 14,859 | 5,246 | ||||||
Interest expense | 359 | 439 | ||||||
Other (income) expense, net | (394 | ) | 554 | |||||
Earnings before income taxes and noncontrolling interest |
14,894 |
4,253 |
||||||
Income taxes | 5,259 | 1,556 | ||||||
Net earnings | 9,635 | 2,697 | ||||||
Less: Net earnings attributable to noncontrolling interest, net of tax |
(54 |
) |
(41 |
) |
||||
Net earnings attributable to |
$ | 9,581 | $ | 2,656 | ||||
Earnings per share: | ||||||||
Basic earnings per share attributable to |
$ |
0.84 |
$ |
0.24 |
||||
Diluted earnings per share attributable to |
$ |
0.83 |
$ |
0.24 |
||||
Weighted average shares outstanding: | ||||||||
Basic | 11,396 | 10,882 | ||||||
Diluted | 11,541 | 11,100 | ||||||
Dividends per share | $ | 0.08 | $ | 0.07 | ||||
Comprehensive income: | ||||||||
Net earnings | $ | 9,635 | $ | 2,697 | ||||
Other comprehensive income: | ||||||||
Foreign currency translation adjustment | (2,275 | ) | 7,395 | |||||
Benefit plan adjustments, net | 474 | 553 | ||||||
Comprehensive income | 7,834 | 10,645 | ||||||
Comprehensive income attributable to noncontrolling interest |
(54 |
) |
(41 |
) |
||||
Comprehensive income attributable to |
$ |
7,780 |
$ |
10,604 |
||||
RECONCILIATION OF CONSOLIDATED NET EARNINGS TO EBITDA
(In thousands; unaudited) |
||||||
Three Months Ended |
||||||
September 30,
2011 |
September 24,
2010 |
|||||
Net earnings attributable to |
$ | 9,581 | $ | 2,656 | ||
Interest expense | 359 | 439 | ||||
Income taxes | 5,259 | 1,556 | ||||
Depreciation and amortization | 2,573 | 2,272 | ||||
Earnings before interest, taxes, depreciation and amortization |
$ |
17,772 |
$ |
6,923 |
||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
(In thousands; unaudited) |
||||||||
|
June 30, | |||||||
2011 | 2011 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash | $ | 24,698 | $ | 20,167 | ||||
Trade accounts receivable, net | 60,216 | 61,007 | ||||||
Inventories, net | 104,976 | 99,139 | ||||||
Deferred income taxes | 5,097 | 5,765 | ||||||
Other | 8,536 | 9,090 | ||||||
Total current assets | 203,523 | 195,168 | ||||||
Property, plant and equipment, net | 66,940 | 65,791 | ||||||
Goodwill, net | 18,063 | 17,871 | ||||||
Deferred income taxes | 13,642 | 16,480 | ||||||
Intangible assets, net | 6,336 | 6,439 | ||||||
Other assets | 7,926 | 7,371 | ||||||
TOTAL ASSETS | $ | 316,430 | $ | 309,120 | ||||
LIABILITIES AND EQUITY | ||||||||
Current liabilities: | ||||||||
Short-term borrowings and current maturities of long-term debt |
$ | 3,867 | $ | 3,915 | ||||
Accounts payable | 34,997 | 38,372 | ||||||
Accrued liabilities | 38,301 | 41,673 | ||||||
Total current liabilities | 77,165 | 83,960 | ||||||
Long-term debt | 36,940 | 25,784 | ||||||
Accrued retirement benefits | 47,981 | 50,063 | ||||||
Deferred income taxes | 4,170 | 4,170 | ||||||
Other long-term liabilities | 4,286 | 7,089 | ||||||
Total liabilities | 170,542 | 171,066 | ||||||
|
11,079 |
10,863 |
||||||
Retained earnings | 171,524 | 162,857 | ||||||
Accumulated other comprehensive loss | (13,200 | ) | (11,383 | ) | ||||
169,403 | 162,337 | |||||||
Less treasury stock, at cost |
24,499 |
25,252 |
||||||
Total |
144,904 | 137,085 | ||||||
Noncontrolling interest | 984 | 969 | ||||||
Total equity | 145,888 | 138,054 | ||||||
TOTAL LIABILITIES AND EQUITY | $ | 316,430 | $ | 309,120 | ||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands; unaudited) |
||||||||
Three Months Ended | ||||||||
September 30,
2011 |
September 24,
2010 |
|||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Net earnings | $ | 9,635 | $ | 2,697 | ||||
Adjustments to reconcile net earnings to net cash provided (used) by operating activities: |
||||||||
Depreciation and amortization | 2,573 | 2,272 | ||||||
Other non-cash changes, net | 2,950 | 1,713 | ||||||
Net change in working capital, excluding cash |
(16,354 |
) |
(2,601 |
) |
||||
Net cash (used) provided by operating activities | (1,196 | ) | 4,081 | |||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
Acquisitions of fixed assets | (3,587 | ) | (1,247 | ) | ||||
Proceeds from sale of fixed assets | - | 49 | ||||||
Other, net | (293 | ) | (293 | ) | ||||
Net cash used by investing activities | (3,880 | ) | (1,491 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
Proceeds from notes payable | - | 18 | ||||||
Principal payments of notes payable | (53 | ) | (42 | ) | ||||
Proceeds from long-term debt | 11,164 | 1,695 | ||||||
Proceeds from exercise of stock options | 169 | 71 | ||||||
Dividends paid to shareholders | (914 | ) | (792 | ) | ||||
Dividends paid to noncontrolling interest | (130 | ) | (138 | ) | ||||
Other | (185 | ) | 132 | |||||
Net cash provided by financing activities | 10,051 | 944 | ||||||
Effect of exchange rate changes on cash | (444 | ) | 558 | |||||
Net change in cash | 4,531 | 4,092 | ||||||
Cash: | ||||||||
Beginning of period | 20,167 | 19,022 | ||||||
End of period | $ | 24,698 | $ | 23,114 | ||||
Source:
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