Twin Disc (TWIN) Q4 2024 earnings summary

Executive summary

• Fiscal 2024 sales rose 6.6% year-over-year to $295.1 million, with net income of $11.0 million and EBITDA up 2.9% to $26.5 million; Q4 sales increased 0.6% to $84.4 million, with net income of $7.4 million.

• Achieved strong operating and free cash flow, with $33.7 million and $25.0 million respectively for the year, supporting strategic priorities and a robust balance sheet.

• Completed the acquisition of Katsa Oy, expanding the global footprint, product portfolio, and contributing $12.6 million to backlog; recognized a $3.7 million bargain purchase gain.

• Maintained a strong balance sheet, reinstated quarterly cash dividend, and continued disciplined capital allocation.

• Backlog at fiscal year-end was $133.7 million, reflecting steady demand in core markets.

Financial highlights

• Full year sales reached $295.1 million, up 6.6%; adjusted for divestitures, revenue increased 9.5% year-over-year.

• Q4 gross profit was $25.1 million, up 1.4%; full-year gross profit rose 12.1% to $83.3 million.

• Q4 gross margin increased to 29.7%, up 20 bps year-over-year and 150 bps sequentially; full-year gross margin up 140 bps to 28.2%.

• Q4 EBITDA was $11.8 million; full-year EBITDA improved to $26.5 million.

• Q4 free cash flow was $10.4 million; full-year free cash flow totaled $25.0 million.

Outlook and guidance

• Fiscal 2025 is expected to be in line with 2024 for revenue and EBITDA, excluding Katsa; Katsa's addition is expected to drive revenue growth.

• CapEx for 2025 is targeted around $10 million, slightly higher than the prior year.

• Updated medium-term targets: $500 million revenue by 2030 (9% CAGR), 30% gross margin, and at least 60% free cash flow conversion.

• Entering fiscal 2025 with a healthy backlog and strong end-market demand; market conditions expected to remain consistent.