Twin Disc (TWIN) investor relations material

Executive summary

• Sales rose 19% year-over-year to $96.7 million, driven by strong demand in marine, defense, and land-based transmission markets, with contributions from the Kobelt acquisition and favorable currency translation.

• Gross margin expanded to 28.1%, reflecting higher volumes, cost initiatives, and operational improvements.

• Net income was $3.3 million, reversing a prior year net loss of $1.5 million.

• EBITDA increased 135% year-over-year to $9.4 million, with margin up 480 basis points.

• Backlog increased sequentially to $179.5 million, providing strong visibility and record order momentum.

Financial highlights

• Gross profit rose 25% to $27.1 million; gross margin expanded to 28.1%.

• Net income was $3.3 million ($0.23 per diluted share), compared to a net loss of $1.5 million in the prior year.

• EBITDA grew 135% year-over-year to $9.4 million; EBITDA margin up 480 basis points.

• Free cash flow was $1.8 million; cash at quarter-end was $16.1 million.

• Total debt rose to $45.1 million, net debt to $29 million, mainly due to the Kobelt acquisition.

Outlook and guidance

• Backlog and order momentum across core markets support confidence in near-term demand.

• Defense-related backlog up 20% year-over-year, with a pipeline of $50–$75 million.

• Management expects continued strong demand for Veth products and global defense spending to support backlog.

• Tariff impacts expected to be 1–3% of cost of goods sold in the next quarter.

• Capital expenditures for FY2026 projected between $13 and $16 million, focused on modernization and efficiency.