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) October 21, 2005
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Twin Disc, Incorporated
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(exact name of registrant as specified in its charter)
WISCONSIN 39-0667110
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(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
1328 Racine Street Racine, Wisconsin 53403
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(Address of principal executive offices)
Registrant's telephone number, including area code: (262)638-4000
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Check the appropriate 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
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) undet the
Exchange Act
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Item 2.02 Results of Operations and Financial Condition.
Twin Disc, Inc. has reported its 1st quarter 2006 financial results. The
Company's press release dated October 21, 2005 announcing the results is
attached hereto as Exhibit 99 and is incorporated herein in its entirety
by reference.
The information in this Current Report shall not be deemed "filed" for the
purpose of Section 18 of the Securities Exchange Act of 1934, as amended, and
Section 11 of the Securities Act of 1933 as amended, or otherwise subject to
the liabilities of those sections, nor will this Current Report be deemed an
admission by the Company as to the materiality of any information in this
report that is required to be disclosed solely by Item 2.02. The Current Report
shall not be deemed to be incorporated by reference in any filing under the
Securities Act of 1933m as amended, or the Exchange Act, except as shall be
expressly set forth by specific reference in such a filing. The Company does
not undertake a duty to update the information in this Current Report and
cautions that the information included in this Current Report is current only
as of October 21, 2005, and may change thereafter.
Item 9.01 Financial Statements and Exhibits
(c) Exhibits
Exhibit 99 Twin Disc, Incorporated's 1st quarter 2006financial
results.
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SIGNATURE
Pursuant to the requirements of section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.
October 21, 2005 Twin Disc, Inc.
/s/ Christopher J. Eperjesy
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Christopher J. Eperjesy
VP - Finance, CFO and Secretary
EXHIBIT INDEX
Exhibit Number Description
Exhibit 99 Twin Disc, Incorporated's 1st quarter 2006 financial
results.
1 TWIN DISC, INC., ANNOUNCES HIGHER FISCAL 2006 FIRST-QUARTER FINANCIAL RESULTS First-Quarter Diluted EPS up 129.7% to $0.85 versus $0.37 First-Quarter Sales up 9.2% to $49,577,000 Management Optimistic about the Fiscal 2006 Outlook RACINE, WISCONSIN-October 21, 2005-Twin Disc, Inc. (NASDAQ: TWIN). today reported significantly improved financial results for the fiscal 2006 first quarter ended September 30, 2005. Sales and diluted earnings per share for the first three months of fiscal 2006 represented the best first quarter in the past 24 fiscal years. Sales for the quarter ended September 30, 2005 improved 9.2 percent to $49,577,000 from $45,382,000 in the same period a year ago. The results for the current fiscal quarter were favorably impacted by continued strong demand across all the markets the Company serves, especially from its oil and military customers. Gross margin as a percentage of sales increased 3.4 percent to 29.1 percent from 25.7 percent in last year's comparable period. This was the fourth sequential quarterly increase in gross margins as a result of the Company's previously announced cost reduction programs, shifting product mix to higher margined items, and selective price increases. Net earnings for the first quarter increased 130.8 percent, or $1,409,000 to $2,486,000, or $0.85 per diluted share, compared with $1,077,000, or $0.37 per diluted share, for the fiscal 2005 first quarter. Commenting on the results, Michael E. Batten, Chairman and Chief Executive Officer, said, "We are extremely encouraged with how the 2006 fiscal year has started out. The bottom-line growth experienced in the quarter exceeded our expectations, as we were successful in increasing sales, managing costs, and improving margins. Our trailing 12-month earnings per diluted share now stands at $2.86, representing the positive sales and earnings momentum that started in the second half of fiscal year 2004." Christopher J. Eperjesy, Vice President - Finance, Chief Financial Officer and Secretary, stated, "We remain focused on strengthening the Company's balance sheet to support our future growth. At the end of the first quarter, working capital was $52,298,000, an increase of $8,682,000 from the end of fiscal 2005. In the quarter, we invested $1,300,000 in capital expenditures, and, for the year, we expect to spend approximately $10,000,000 in investments in capital assets, compared to almost $12,000,000 in fiscal 2005. While inventories increased during the quarter as a result of our strong backlog and improved order rate, accounts receivable declined $3,556,000, or 9.4 percent. Shareholders' equity now stands at $69,438,000 an increase of 3.8 percent from $66,899,000 at fiscal year end." Mr. Batten concluded, "We received a number of new contracts during the quarter, including one of the largest orders we have ever received for our 8500 Series Transmissions. More companies throughout the markets we serve are recognizing Twin Disc as a leading provider of innovative and highly reliable power transmission products. Our backlog of orders to be shipped over the next six months, including the backlog from Rolla, was $74,700,000. Based on our strong backlog, improving margins and favorable industry dynamics, Twin Disc is well positioned to continue to expand sales and earnings throughout the year." Twin Disc designs, manufactures and sells heavy-duty off-highway power transmission equipment. Products offered include: marine transmissions, surface drives and propellers; power-shift transmissions; power take-offs and reduction gears; industrial clutches; and control systems. The Company sells its products to customers primarily in the marine, industrial equipment, government, energy and natural resources and agricultural markets. 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. --Financial Results Follow--
2 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per-share data; unaudited) Three Months Ended September 30, 2005 2004 ---- ---- Net sales $49,577 $45,382 Cost of goods sold 35,173 33,730 ------ ------ Gross profit 14,404 11,652 Marketing, engineering and administrative expenses 10,147 9,509 Interest expense 316 219 Other income, net (54) (44) ------ ------ Earnings before income taxes and minority interest 3,995 1,968 Income taxes 1,466 866 Minority interest (43) (25) Net earnings $ 2,486 $ 1,077 ------ ------ ------ ------ Earnings per share: Basic $ 0.87 $ 0.38 Diluted $ 0.85 $ 0.37 Average shares outstanding: Basic 2,866 2,836 Diluted 2,921 2,888 Dividends per share $ 0.175 $ 0.175
3 CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except per-share data; unaudited) September 30, June 30, 2005 2005 ---- ---- ASSETS Current assets: Cash and cash equivalents $9,502 $11,614 Trade accounts receivable, net 34,195 37,751 Inventories, net 53,345 48,481 Deferred income taxes 5,807 5,514 Other 4,015 3,423 ------ ------ Total current assets 106,864 106,783 Property, plant and equipment, net 39,957 40,331 Goodwill 12,764 12,854 Deferred income taxes 14,627 16,230 Other assets 8,932 9,097 ------ ------ $183,144 $185,295 -------- -------- -------- -------- LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Notes payable $3,135 $3,522 Current maturities on long-term debt 2,849 2,849 Accounts payable 15,880 21,746 Accrued liabilities 32,702 35,050 ------ ------ Total current liabilities 54,566 63,167 Long-term debt 20,277 14,958 Accrued retirement benefits 38,346 39,680 ------ ------ 113,189 117,805 Minority interest 517 591 Shareholders' equity: Common stock 11,653 11,653 Retained earnings 91,297 89,316 Unearned Compensation (150) (203) Accumulated other comprehensive loss (17,842) (17,567) ------ ------ 84,958 83,199 Less treasury stock, at cost 15,520 16,300 ------ ------ Total shareholders' equity 69,438 66,899 ------ ------ $183,144 $185,295 -------- -------- -------- --------