Twin Disc Announces First Quarter Results
Fiscal First Quarter 2024 Highlights
- Sales increased 13.7% year-over-year to
$63.6 million - Gross margin of 26.2%, expanded 240 basis points despite one-time noncash charge of
$3.1 million - Net loss attributable to
Twin Disc was($1.2) million and EBITDA* of$2.3 million - Significantly improved operating cash flow of
$9.8 million compared to($0.7) million in the year-ago period - Free cash flow* of
$6.1 million compared to($2.9) million in the year-ago period - Robust six-month backlog of
$122.5 million supported by healthy ongoing demand - Board reinstates quarterly cash dividend of
$0.04 per share
CEO Perspective
“We delivered impressive results in the first quarter, highlighted by double-digit revenue growth, robust margin expansion, and solid cash generation, giving us the confidence to reinstate our quarterly dividend. Thanks to the hard work of our global teams, we are capturing stable demand across product groups, boosted by increased activity in oil and gas markets in what is seasonally our slowest quarter,” commented
First Quarter Results
Sales for the fiscal 2024 first quarter increased 13.7% year-over-year to
Sales by product group:
Q1 FY24 Sales |
Q1 FY23 Sales |
Change (%) |
||||
(Thousands of $): | ||||||
Marine and Propulsion Systems | $ | 36,463 | $ | 29,336 | 24.3 | % |
Land-Based Transmissions | 18,577 | 15,938 | 16.6 | % | ||
Industrial | 5,685 | 7,031 | -19.1 | % | ||
Other | 2,829 | 3,608 | -21.6 | % | ||
Total | $ | 63,554 | $ | 55,913 | 13.7 | % |
The company delivered 19% growth year-over-year in the
Gross profit increased 25.1% to
Marketing, engineering and administrative (ME&A) expense increased by
Net loss attributable to
Earnings before interest, taxes, depreciation, and amortization (EBITDA) increased by
On a consolidated basis, the backlog of orders to be shipped over the next six months is approximately
CFO Perspective
Discussion of Results
About
Forward-Looking Statements
This press release may contain statements that are forward looking as defined by the
*Non-GAAP Financial Information
Financial information excluding the impact of asset impairments, restructuring charges, foreign currency exchange rate changes and the impact of acquisitions, if any, in this press release are not measures that are defined in
Definitions
Earnings before interest, taxes, depreciation and amortization (EBITDA) is calculated as net earnings or loss excluding interest expense, the provision or benefit for income taxes, depreciation and amortization expenses.
Net debt is calculated as total debt less cash.
Free cash flow is calculated as net cash provided (used) by operating activities less acquisition of fixed assets.
Investors:
Riveron
TwinDiscIR@riveron.com
Source:
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (In thousands, except per-share data; unaudited) |
||||||||
As Adjusted | ||||||||
Net sales | $ | 63,554 | $ | 55,913 | ||||
Cost of goods sold | 43,818 | 42,616 | ||||||
Cost of goods sold - Sale of boat management system product line and related inventory | 3,099 | - | ||||||
Gross profit | 16,637 | 13,297 | ||||||
Marketing, engineering, and administrative expenses | 16,917 | 15,090 | ||||||
Loss from operations | (280 | ) | (1,793 | ) | ||||
Other Income (expense): | ||||||||
Interest expense | (394 | ) | (566 | ) | ||||
Other income, net | 137 | 347 | ||||||
(257 | ) | (219 | ) | |||||
Loss before income taxes and noncontrolling interest | (537 | ) | (2,012 | ) | ||||
Income tax expense (benefit) | 546 | (688 | ) | |||||
Net loss | (1,083 | ) | (1,324 | ) | ||||
Less: Net loss attributable to noncontrolling interest, net of tax | (90 | ) | (98 | ) | ||||
Net loss attributable to |
$ | (1,173 | ) | $ | (1,422 | ) | ||
Loss per share data: | ||||||||
Basic loss per share attributable to |
$ | (0.09 | ) | $ | (0.11 | ) | ||
Diluted loss per share attributable to |
$ | (0.09 | ) | $ | (0.11 | ) | ||
Weighted average shares outstanding data: | ||||||||
Basic shares outstanding | 13,527 | 13,407 | ||||||
Diluted shares outstanding | 13,527 | 13,407 | ||||||
Comprehensive income (loss) | ||||||||
Net loss | $ | (1,083 | ) | $ | (1,324 | ) | ||
Benefit plan adjustments, net of income taxes of |
(171 | ) | (89 | ) | ||||
Foreign currency translation adjustment | (3,036 | ) | (6,290 | ) | ||||
Unrealized (loss) gain on hedges, net of income taxes of |
(216 | ) | 793 | |||||
Comprehensive loss | (4,506 | ) | (6,910 | ) | ||||
Less: Comprehensive income attributable to noncontrolling interest | 151 | 136 | ||||||
Comprehensive loss attributable to |
$ | (4,657 | ) | $ | (7,046 | ) | ||
RECONCILIATION OF CONSOLIDATED NET INCOME TO EBITDA (In thousands; unaudited) |
|||||||
For the Quarter Ended | |||||||
Net loss attributable to Twin Disc | $ | (1,173 | ) | $ | (1,422 | ) | |
Interest expense | 394 | 566 | |||||
Income tax expense | 546 | (688 | ) | ||||
Depreciation and amortization | 2,488 | 2,140 | |||||
Earnings before interest, taxes, depreciation, and amortization (EBITDA) | $ | 2,255 | $ | 596 |
RECONCILIATION OF TOTAL DEBT TO NET DEBT (In thousands; unaudited) |
|||||||
Current maturities of long-term debt | $ | 2,002 | $ | 2,010 | |||
Long-term debt | 19,655 | 16,617 | |||||
Total debt | 21,657 | 18,627 | |||||
Less cash | 20,428 | 13,263 | |||||
Net debt | $ | 1,229 | 5,364 |
RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW (In thousands; unaudited) |
|||||||
For the Quarter Ended | |||||||
Net cash provided (used) by operating activities | $ | 9,802 | $ | (696 | ) | ||
Acquisition of fixed assets | (3,690 | ) | (2,237 | ) | |||
Free cash flow | $ | 6,112 | $ | (2,933 | ) |
CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands; except share amounts, unaudited) |
|||||||
ASSETS | |||||||
Current assets: | |||||||
Cash | $ | 20,428 | $ | 13,263 | |||
Trade accounts receivable, net | 39,756 | 54,760 | |||||
Inventories | 126,236 | 131,930 | |||||
Assets held for sale | 4,559 | 2,968 | |||||
Prepaid expenses | 9,466 | 8,459 | |||||
Other | 8,763 | 8,326 | |||||
Total current assets | 209,208 | 219,706 | |||||
Property, plant and equipment, net | 40,065 | 38,650 | |||||
Right-of-use assets operating leases | 12,093 | 13,133 | |||||
Intangible assets, net | 11,517 | 12,637 | |||||
Deferred income taxes | 2,204 | 2,244 | |||||
Other assets | 2,894 | 2,811 | |||||
Total assets | $ | 277,981 | $ | 289,181 | |||
LIABILITIES AND EQUITY | |||||||
Current liabilities: | |||||||
Current maturities of long-term debt | $ | 2,002 | $ | 2,010 | |||
Accounts payable | 29,584 | 36,499 | |||||
Accrued liabilities | 60,632 | 61,586 | |||||
Total current liabilities | 92,218 | 100,095 | |||||
. | |||||||
Long-term debt | 19,655 | 16,617 | |||||
Lease obligations | 9,896 | 10,811 | |||||
Accrued retirement benefits | 7,138 | 7,608 | |||||
Deferred income taxes | 3,150 | 3,280 | |||||
Other long-term liabilities | 5,749 | 5,253 | |||||
Total liabilities | 137,806 | 143,664 | |||||
Preferred shares authorized: 200,000; issued: none; no par value | - | - | |||||
Common shares authorized: 30,000,000; issued: 14,632,802; no par value | 39,439 | 42,855 | |||||
Retained earnings | 119,126 | 120,299 | |||||
Accumulated other comprehensive loss | (8,621 | ) | (5,570 | ) | |||
149,944 | 157,584 | ||||||
Less treasury stock, at cost (674,354 and 814,734 shares, respectively) | 10,343 | 12,491 | |||||
Total |
139,601 | 145,093 | |||||
Noncontrolling interest | 574 | 424 | |||||
Total equity | 140,175 | 145,517 | |||||
Total liabilities and equity | $ | 277,981 | $ | 289,181 |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands; unaudited) |
|||||||
For the Quarters Ended | |||||||
As Adjusted | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||
Net loss | $ | (1,083 | ) | $ | (1,324 | ) | |
Adjustments to reconcile net loss to net cash provided (used) by operating activities: | |||||||
Depreciation and amortization | 2,488 | 2,140 | |||||
Gain on sale of assets | (16 | ) | (42 | ) | |||
Loss on sale of boat management product line and related inventory | 3,099 | ||||||
Restructuring expenses | (57 | ) | (68 | ) | |||
Provision for deferred income taxes | 97 | (1,623 | ) | ||||
Stock compensation expense and other non-cash changes, net | 1,140 | 864 | |||||
Net change in operating assets and liabilities | 4,134 | (643 | ) | ||||
Net cash provided (used) by operating activities | 9,802 | (696 | ) | ||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||
Acquisition of property, plant, and equipment | (3,690 | ) | (2,237 | ) | |||
Proceeds from sale of fixed assets | - | 2 | |||||
Other, net | 45 | 534 | |||||
Net cash used by investing activities | (3,645 | ) | (1,701 | ) | |||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||
Borrowings under revolving loan arrangements | 27,184 | 20,221 | |||||
Repayments of revolving loan arrangements | (23,423 | ) | (18,685 | ) | |||
Repayments of other long-term debt | (508 | ) | (519 | ) | |||
Payments of finance lease obligations | (847 | ) | (132 | ) | |||
Payments of withholding taxes on stock compensation | (1,763 | ) | (168 | ) | |||
Net cash provided by financing activities | 643 | 717 | |||||
Effect of exchange rate changes on cash | 365 | 2,373 | |||||
Net change in cash | 7,165 | 693 | |||||
Cash: | |||||||
Beginning of period | 13,263 | 12,521 | |||||
End of period | $ | 20,428 | $ | 13,214 |
Source: Twin Disc, Incorporated