Twin Disc (NASDAQ:TWIN) Announces Earnings Results

Key Points

• Sales and backlog strength: Revenue rose 19% YoY to $96.7M (organic +7%) with gross margin expanding to 28.1% and EBITDA improving to $9.4M, and backlog strengthened to about $179.5M with a growing defense pipeline.
• Earnings miss but higher leverage: Twin Disc reported EPS of $0.23, missing the $0.25 consensus despite the revenue beat, and recent acquisition activity increased total debt to $45.1M (net ~$29M), up ~18% YoY.
• Near-term risks and shareholder actions: Management expects tariff-related cost pressure of roughly 1%–3% of COGS next quarter while pursuing footprint adjustments; the stock jumped to $18.48 and the company announced a quarterly dividend of $0.04 (0.9% yield).

Twin Disc (NASDAQ:TWIN - Get Free Report) issued its earnings results on Wednesday. The industrial products company reported $0.23 EPS for the quarter, missing analysts' consensus estimates of $0.25 by ($0.02), FiscalAI reports. Twin Disc had a net margin of 6.26% and a return on equity of 0.02%. The company had revenue of $96.69 million during the quarter, compared to analyst estimates of $94.70 million.

Here are the key takeaways from Twin Disc's conference call:

• Sales rose 19% YoY to $96.7M (organic +7%) with gross margin expanding to 28.1% and EBITDA improving to $9.4M, reflecting meaningful margin expansion and operational leverage.
• Backlog strengthened to ~$179.5M, giving better near-term revenue visibility; defense now ~15% of backlog, defense backlog +20% YoY with a pipeline of ~$50M–$75M supporting durable growth prospects.
• Free cash flow generation improved to $1.8M in the quarter, inventory declined ~$3M and inventory as a percentage of backlog improved to ~89%, signaling progress on working capital conversion.
• Recent acquisition activity (Kobelt) contributed to sales and margin improvement but increased leverage, with total debt at $45.1M and net debt at ~$29M, up ~18% year-over-year.
• The company expects tariff-related cost pressure of roughly 1%–3% of COGS next quarter, though management is pursuing manufacturing and footprint adjustments to mitigate impacts.

Twin Disc Price Performance

NASDAQ TWIN traded up $2.64 on Wednesday, reaching $18.48. 97,137 shares of the stock traded hands, compared to its average volume of 48,048. The firm's fifty day simple moving average is $16.58 and its 200 day simple moving average is $16.50. The company has a quick ratio of 0.75, a current ratio of 2.12 and a debt-to-equity ratio of 0.22. The company has a market cap of $266.48 million, a price-to-earnings ratio of 12.32 and a beta of 0.71. Twin Disc has a 12 month low of $6.80 and a 12 month high of $19.63.

Twin Disc Dividend Announcement

The company also recently announced a quarterly dividend, which will be paid on Monday, June 1st. Shareholders of record on Monday, May 18th will be given a $0.04 dividend. This represents a $0.16 dividend on an annualized basis and a yield of 0.9%. The ex-dividend date is Monday, May 18th. Twin Disc's dividend payout ratio is 10.67%.

Analysts Set New Price Targets

Several equities analysts have recently issued reports on the company. Weiss Ratings upgraded Twin Disc from a "hold (c+)" rating to a "buy (b-)" rating in a research report on Thursday, April 16th. Wall Street Zen downgraded Twin Disc from a "strong-buy" rating to a "buy" rating in a research note on Saturday, April 18th. One research analyst has rated the stock with a Buy rating and one has issued a Hold rating to the company's stock. According to MarketBeat.com, Twin Disc presently has an average rating of "Moderate Buy".

Institutional Trading of Twin Disc

Several institutional investors have recently modified their holdings of the company. Goldman Sachs Group Inc. grew its holdings in Twin Disc by 19.4% during the first quarter. Goldman Sachs Group Inc. now owns 41,712 shares of the industrial products company's stock worth $316,000 after acquiring an additional 6,774 shares during the period. Strs Ohio acquired a new position in Twin Disc in the first quarter worth approximately $74,000. Arrowstreet Capital Limited Partnership bought a new position in shares of Twin Disc in the second quarter valued at $566,000. First Trust Advisors LP lifted its position in shares of Twin Disc by 4.1% during the 2nd quarter. First Trust Advisors LP now owns 35,168 shares of the industrial products company's stock valued at $311,000 after acquiring an additional 1,378 shares during the last quarter. Finally, Marshall Wace LLP acquired a new stake in shares of Twin Disc during the 2nd quarter valued at $186,000. Institutional investors and hedge funds own 65.25% of the company's stock.

About Twin Disc

Twin Disc, Inc NASDAQ: TWIN is a global designer and manufacturer of power transmission equipment for marine and industrial applications. Headquartered in Racine, Wisconsin, the company develops a range of mechanical and digital solutions that control power delivery in demanding environments. Its portfolio includes marine gears, power take-offs, clutches, brakes, transmissions and controllable pitch propeller systems engineered to withstand heavy loads and corrosive conditions.

In addition to original equipment manufacturing, Twin Disc offers aftermarket parts and services, including maintenance, repair and overhaul support through a network of service centers worldwide.

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