Twin Disc (TWIN) Q1 2027 earnings summary

Executive summary

• Q1 FY27 sales rose 10.9% YoY to $88.7M; net income attributable was $3.445M versus a $0.518M loss, diluted EPS was $0.24, and EBITDA increased 62.6% to $7.687M.

• Six-month backlog reached a record $190.6M, supported by accelerating defense orders; free cash flow was $5.556M and net debt declined to $13.067M.

Financial highlights

• Reported sales increased 10.9% to $88.7M; organic sales rose 11.8%, excluding acquisitions and FX.

• Gross profit rose 10.9% to $25.4M; gross margin held at 28.7% YoY.

• ME&A expense was $20.8M versus $20.7M; operating income more than doubled to $4.6M from $2.2M.

• Free cash flow was $5.556M versus an outflow of $10.954M; operating cash flow was $11.340M versus an outflow of $7.524M.

Outlook and guidance

• FY27 capital investment is expected to be $20M–$25M, focused on manufacturing, assembly and testing modernization, growth, and efficiency.

• FY27 free-cash-flow conversion is expected in the 20%–40% range, depending partly on growth CapEx timing and execution; the long-term goal remains above 60%.

• FY2030 targets remain $500M revenue, 30% gross margin, and free-cash-flow conversion above 60%.

• Gross margins are expected to improve over time as end markets diversify and operating leverage increases.