Twin Disc (TWIN) Q4 2024 earnings summary

Executive summary

• Fiscal 2024 sales rose 6.6% year-over-year to $295.1 million, with strong cash generation and EBITDA up 2.9% to $26.5 million.

• Q4 sales increased 0.6% year-over-year to $84.4 million, with net income of $7.4 million and gross margin up to 29.7%.

• Acquisition of Katsa Oy completed in Q4, expanding global reach, product portfolio, and contributing $12.6 million to backlog.

• Focus remains on expanding hybrid and electrification solutions, with ongoing partnerships and product innovation.

• 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 rose 9.5%.

• Q4 net income was $7.4 million ($0.53/share), down from $8.6 million ($0.62/share) last year; full-year net income was $11 million ($0.79/share), up from $10.4 million ($0.75/share).

• Gross profit margin increased to 29.7% in Q4; full-year gross margin up 140 bps to 28.2%.

• EBITDA for FY 2024 was $26.5 million, up from $25.8 million in FY 2023.

• Free cash flow for FY 2024 totaled $25.0 million; cash at year-end increased 51.3% to $20.1 million.

Outlook and guidance

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

• CapEx for 2025 targeted around $10 million, slightly higher than 2024.

• By 2030, targets include $500 million in revenue, 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.

• Updated medium-term targets provided, reflecting confidence in growth potential.