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twin20151109_8k.htm

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

Current Report Pursuant to Section 13 or 15(d) of

The Securities Exchange Act of 1934

 

 

Date of Report (Date of Earliest Event Reported): November 6, 2015

 

 

TWIN DISC, INCORPORATED

 

(exact name of registrant as specified in its charter)

 

 

WISCONSIN

001-7635

39-0667110

(State or other jurisdiction

(Commission

(IRS Employer

of incorporation)

File Number)

Identification No.)

 

 

1328 Racine Street                  Racine, Wisconsin 53403

 

(Address of principal executive offices)

 

Registrant's telephone number, including area code:     (262)638-4000

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

[   ]

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

[   ]

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

[   ]

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

[   ]

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 
 
 

  

Item 5.02

Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

  

At a meeting on November 6, 2015, the Compensation and Executive Development Committee of the Board of Directors of Twin Disc, Incorporated (the “Company”) approved a 10% reduction in the base salary of the Company’s principal executive officer, and a 6% reduction in the base salaries of the Company’s principal financial officer and other “named executive officers” (as used in Instruction 4 to Item 5.02 of Form 8-K). The new annualized base salaries of the Company’s named executive officers are as follows:

 

Name and Position  

  

Base Salary  

  

  

  

John H. Batten  

  

$450,000

President and Chief  

  

  

Executive Officer  

  

  

     

Jeffrey S. Knutson  

  

$296,100

Vice President – Finance,  

  

  

Chief Financial Officer,

    

Treasurer, and Secretary 

    
     

Dean J. Bratel 

  

$258,500

Vice President – Global Sales

  

  

and Marketing

    
     

Denise L. Wilcox  

  

$216,200

Vice President – Human Resources  

  

  

     

Michael B. Gee

  

$178,600

Vice President – Engineering

    

 

 

The above reductions in base salary are effective on the pay period that begins November 9, 2015.

 

At its November 6, 2015 meeting, the Compensation and Executive Development Committee also suspended the FY 2016 Corporate Incentive Plan (“CIP”). The CIP established target bonuses for the named executive officers as a specified percentage of each named executive officer’s base salary based on certain performance criteria. It is not expected that the CIP will be re-established for the 2016 fiscal year.

 

Item 8.01 

Other Events

 

The Company has taken several additional steps to reduce future expenses.  In addition to the salary reductions affecting named executive officers discussed in Item 5.02 above, two other corporate officers are taking a 6% reduction in their base salaries.  The Company has eliminated 15 salaried positions and will implement a 4% reduction in base salaries and wages of salaried and hourly employees at its Racine headquarters and domestic manufacturing facilities, along with additional temporary layoffs at its Racine operation.  The Company also intends to reduce marketing, travel, and professional service expenses.  The annualized combined expected savings from these actions is approximately $4.3 million. The Company will continue to evaluate global staffing and manufacturing capacity for reorganization opportunities in light of current and forecasted market demand.

 

 
 
 

  

These actions follow a fiscal 2015 fourth quarter restructuring plan to reduce costs and improve efficiencies at the Company’s North American manufacturing operations. This restructuring resulted in a reduction of 79 people through a combination of early retirement and reduction in force, resulting in a charge of $3.3 million in the fourth quarter of fiscal 2015. This restructuring action is expected to provide annual cost saving benefits of nearly $6.0 million.

 

The Company has also executed capital reallocation initiatives, including the sale of its distribution territories in the mid-Atlantic and south east regions of the United States. These divestitures were completed in the third quarter of fiscal 2015 and the first quarter of fiscal 2016, respectively, and generated approximately $5.0 million in capital for investment in new technologies or product line enhancements aimed at generating growth and greater profitability.

 

The Company remains firmly committed to long term growth, and is confident these cost reduction and capital reallocation initiatives will improve competitiveness as global markets recover. With a strong customer base and outstanding global reputation for technical innovation, product quality and service, the Company is well positioned for future growth.

 

 

FORWARD LOOKING STATEMENTS

 

The disclosures in this report on Form 8-K and in the documents incorporated herein by reference contain or may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. The words “believes,” “expects,” “intends,” “plans,” “anticipates,” “hopes,” “likely,” “will,” and similar expressions identify such forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause the actual results, performance or achievements of the Company (or entities in which the Company has interests), or industry results, to differ materially from future results, performance or achievements expressed or implied by such forward-looking statements. Certain factors that could cause the Company’s actual future results to differ materially from those discussed are noted in connection with such statements, but other unanticipated factors could arise. Readers are cautioned not to place undue reliance on these forward-looking statements which reflect management’s view only as of the date of this Form 8-K. The Company undertakes no obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events, conditions or circumstances. 

 

 

Item 9.01

Financial Statements and Exhibits

 

(d)

Exhibits

 

EXHIBIT NUMBER

DESCRIPTION

   

99.1

Press Release issued by the Company on November 9, 2015 regarding the additional activities to further reduce expenses.

  

 
 
 

 

SIGNATURE

 

Pursuant to the requirements of section 13 or 15(d) of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

Date: November 9, 2015

 

Twin Disc, Inc.

 

 

 

 

 

 

 

/s/ JEFFREY S. KNUTSON

 

 

 

Jeffrey S. Knutson

 

 

 

Vice President - Finance, Chief Financial Officer, Treasurer and Secretary

 

 

ex99-1.htm

Exhibit 99.1

 

 

 

FOR IMMEDIATE RELEASE

 

  

 

Contact: Jeffrey S. Knutson

 

(262) 638-4242

 

TWIN DISC, INC. ANNOUNCES ADDITIONAL RESTRUCTURING ACTIVITIES TO FURTHER REDUCE EXPENSES

 

●

Annualized Savings from These Actions is approximately $4.3 million; in addition to $6.0 million of Savings Announced in the Fiscal 2015 Fourth Quarter

  
 

●

Management to Present at Robert W. Baird & Co. 2015 Industrial Conference

  

 

 

RACINE, WISCONSIN—November 9, 2015—Twin Disc, Inc. (NASDAQ: TWIN), today announced additional restructuring and cost reduction activities to further reduce expenses, as a result of challenging global market conditions within the Company’s oil and gas, global pleasure craft and Asian commercial marine markets. Once fully implemented, the Company expects $4.3 million of annual savings from these actions, in addition to $6.0 million of annual savings announced in the fiscal 2015 fourth quarter.

 

Initiatives under the current plan include the reductions in the base salaries of the Company’s corporate officers, the elimination of 15 salaried positions, reductions in base salaries and wages of salaried and hourly employees at the Company’s headquarters and domestic manufacturing facilities, and temporary layoffs at its Racine operation. In addition, the Company intends to reduce marketing, travel and professional service expenses.

 

John H. Batten, President and Chief Executive Officer, said: “As we discussed over the past two quarters, we are adjusting our business for challenging global market conditions within the Company’s oil and gas, global pleasure craft and Asian commercial marine markets. We understand the actions we announced today and in the fourth quarter are difficult for our employees and communities. But given the uncertainty in many of our traditional markets, these cost reduction activities are necessary. We will continue to evaluate additional activities to align our global staffing and manufacturing capacity with current and forecasted market demand.”

 

 
 
 

  

“In addition, we recently announced capital reallocation initiatives, including the sale of our distribution territories in the mid-Atlantic and south east regions of the United States. These divestitures were completed in the third quarter of fiscal 2015 and the first quarter of fiscal 2016, respectively, and generated approximately $5.0 million in capital. The proceeds from these divestitures will be used for investments in new technologies and product line enhancements aimed at generating growth and greater profitability. We remain firmly committed to the long-term growth potential of our markets, and we are confident these cost reduction and capital reallocation initiatives will improve our competitiveness as global markets recover. With a strong customer base and outstanding global reputation for technical innovation, product quality and service, I am confident the Company is well positioned for future growth.”

 

John H. Batten, President and Chief Executive Officer, and Jeffrey S. Knutson, Vice President - Finance, Chief Financial Officer, Treasurer and Secretary, will present at the Robert W. Baird & Co. 2015 Industrial Conference in Chicago, Illinois on November 10, 2015 at 7:30 a.m. CT.

 

About Twin Disc, Inc.

Twin Disc, Inc. designs, manufactures and sells marine and heavy-duty off-highway power transmission equipment. Products offered include: marine transmissions, surface drives, propellers and boat management systems, as well as power-shift transmissions, hydraulic torque converters, power take-offs, industrial clutches and control systems. The Company sells its products to customers primarily in the pleasure craft, commercial and military marine markets, as well as in the energy and natural resources, government and industrial markets. The Company’s worldwide sales to both domestic and foreign customers are transacted through a direct sales force and a distributor network.

 

Forward-Looking Statements

This press release may contain statements that are forward looking as defined by the Securities and Exchange Commission in its rules, regulations and releases. The Company intends that such forward-looking statements be subject to the safe harbors created thereby. All forward-looking statements are based on current expectations regarding important risk factors including those identified in the Company’s most recent periodic report and other filings with the Securities and Exchange Commission. Accordingly, actual results may differ materially from those expressed in the forward-looking statements, and the making of such statements should not be regarded as a representation by the Company or any other person that the results expressed therein will be achieved.