twin20220930

twin20220930_10q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

Form 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarter ended September 30, 2022

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 1-7635

TWIN DISC, INCORPORATED

(Exact name of registrant as specified in its charter)

Wisconsin	39-0667110
(State or other jurisdiction of	(I.R.S. Employer
Incorporation or organization)	Identification No.)

1328 Racine Street, Racine, Wisconsin 53403

(Address of principal executive offices)

(262) 638-4000

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Exchange Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock (No Par Value)	TWIN	The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer ☐	Accelerated Filer ☒
Non-accelerated filer ☐	Smaller reporting company ☒
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

At October 24, 2022, the registrant had 13,787,132 shares of its common stock outstanding.

Part I.

FINANCIAL INFORMATION

Item 1.

Financial Statements

TWIN DISC, INCORPORATED

CONDENSED CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS, EXCEPT SHARE AMOUNTS)

(UNAUDITED)

	September 30, 2022			June 30, 2022

ASSETS
Current assets:
Cash	$	13,214		$	12,521
Trade accounts receivable, net		40,007			45,452
Inventories		128,100			127,109
Assets held for sale		5,769			2,968
Prepaid expenses		8,207			7,756
Other		6,521			8,646
Total current assets		201,818			204,452

Property, plant and equipment, net		38,989			41,615
Right-of-use assets operating leases		11,492			12,685
Intangible assets, net		11,560			13,010
Deferred income taxes		2,846			2,178
Other assets		2,846			2,583

Total assets	$	269,551		$	276,523

LIABILITIES AND EQUITY
Current liabilities:
Current maturities of long-term debt	$	2,000		$	2,000
Accounts payable		30,706			28,536
Accrued liabilities		49,158			50,542
Total current liabilities		81,864			81,078

Long-term debt, less current maturities		35,112			34,543
Lease obligations		9,483			10,575
Accrued retirement benefits		9,860			9,974
Deferred income taxes		3,422			3,802
Other long-term liabilities		5,042			5,363

Total liabilities		144,783			145,335

Commitments and contingencies (Note D)

Equity:
Twin Disc shareholders' equity:
Preferred shares authorized: 200,000; issued: none; no par value		-			-
Common shares authorized: 30,000,000; issued: 14,632,802; no par value		41,285			42,551
Retained earnings		133,002			135,031
Accumulated other comprehensive loss		(37,103	)		(32,086	)
		137,184			145,496
Less treasury stock, at cost (845,670 and 960,459 shares, respectively)		12,964			14,720

Total Twin Disc shareholders' equity		124,220			130,776

Noncontrolling interest		548			412

Total equity		124,768			131,188

Total liabilities and equity	$	269,551		$	276,523

The notes to condensed consolidated financial statements are an integral part of these statements.

TWIN DISC, INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME

(IN THOUSANDS, EXCEPT PER SHARE DATA)

(UNAUDITED)

	For the Quarter Ended
	September 30, 2022			September 24, 2021

Net sales	$	55,913		$	47,761
Cost of goods sold		42,616			34,314
Gross profit		13,297			13,447

Marketing, engineering and administrative expenses		15,079			13,091
Restructuring expenses		11			48
Other operating income		-			(2,939	)
(Loss) income from operations		(1,793	)		3,247

Interest expense		566			530
Other (income) expense, net		260			355
		826			885

(Loss) income before income taxes and noncontrolling interest		(2,619	)		2,362
Income tax (benefit) expense		(688	)		382

Net (loss) income		(1,931	)		1,980
Less: Net earnings attributable to noncontrolling interest, net of tax		(98	)		(60	)

Net (loss) income attributable to Twin Disc	$	(2,029	)	$	1,920

(Loss) income per share data:
Basic (loss) income per share attributable to Twin Disc common shareholders	$	(0.15	)	$	0.14
Diluted (loss) income per share attributable to Twin Disc common shareholders	$	(0.15	)	$	0.14

Weighted average shares outstanding data:
Basic shares outstanding		13,407			13,283
Diluted shares outstanding		13,407			13,350

Comprehensive income (loss)
Net (loss) income	$	(1,931	)	$	1,980
Benefit plan adjustments, net of income taxes of $1 and $117, respectively		518			384
Foreign currency translation adjustment		(6,290	)		(1,938	)
Unrealized gain on cash flow hedge, net of income taxes of $0 and $63, respectively		793			204
Comprehensive (loss) income		(6,910	)		630
Less: Comprehensive income (loss) attributable to noncontrolling interest		136			(136	)

Comprehensive (loss) income attributable to Twin Disc	$	(6,774	)	$	494

The notes to condensed consolidated financial statements are an integral part of these statements.

TWIN DISC, INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(IN THOUSANDS)

(UNAUDITED)

	For the Quarters Ended
	September 30, 2022			September 24, 2021

Cash flows from operating activities:
Net (loss) income	$	(1,931	)	$	1,980
Adjustments to reconcile net (loss) income to net cash (used) provided by operating activities:
Depreciation and amortization		2,140			2,550
Gain on sale of assets		(42	)		(2,939	)
Restructuring expenses		(68	)		(125	)
Provision for deferred income taxes		(1,623	)		(814	)
Stock compensation expense and other non-cash changes, net		864			937
Net change in operating assets and liabilities		(36	)		785

Net cash (used) provided by operating activities		(696	)		2,374

Cash flows from investing activities:
Acquisitions of property, plant and equipment		(2,237	)		(846	)
Proceeds from sale of fixed assets		2			9,139
Proceeds on note receivable		-			500
Other, net		534			(81	)

Net cash (used) provided by investing activities		(1,701	)		8,712

Cash flows from financing activities:
Borrowings under revolving loan arrangements		20,221			20,591
Repayments of revolving loan arrangements		(18,685	)		(20,591	)
Repayments of other long term debt		(651	)		(278	)
Payments of withholding taxes on stock compensation		(168	)		(292	)

Net cash provided (used) by financing activities		717			(570	)

Effect of exchange rate changes on cash		2,373			(764	)

Net change in cash		693			9,752

Cash:
Beginning of period		12,521			12,340

End of period	$	13,214		$	22,092

The notes to condensed consolidated financial statements are an integral part of these statements.

TWIN DISC, INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)

(UNAUDITED)

A.	Basis of Presentation

The unaudited condensed consolidated financial statements have been prepared by Twin Disc, Incorporated (the “Company”) pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and, in the opinion of the Company, include adjustments, consisting primarily of normal recurring items, necessary for a fair statement of results for each period. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such SEC rules and regulations. The Company believes that the disclosures made are adequate to make the information presented not misleading. These financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in the Company’s Annual Report filed on Form 10-K for June 30, 2022. The year-end condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States.

The Company's reporting period ends on the last Friday of the quarterly calendar period. The Company's fiscal year ends on June 30, regardless of the day of the week on which June 30 falls.

New Accounting Releases

In June 2016, the FASB issued updated guidance (ASU 2016-13) and also issued subsequent amendments to the initial guidance under ASU 2018-19, ASU 2019-04, ASU 2019-05 and ASU 2019-10 (collectively ASC 326). ASC 326 requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. This replaces the existing incurred loss model with an expected loss model and requires the use of forward-looking information to calculate credit loss estimates. The amendments in this guidance are effective for filers, excluding smaller reporting companies, for fiscal years beginning after December 15, 2019, and for smaller reporting companies for fiscal years beginning after December 15, 2022 (the Company’s fiscal 2024), with early adoption permitted for certain amendments. ASC 326 must be adopted by applying a cumulative effect adjustment to retained earnings. The Company is currently evaluating the potential impact of this guidance on the Company’s financial statements and disclosures.

In March 2020 and January 2021, the FASB issued guidance (ASU 2020-04 and ASU 2021-01, respectively), intended to provide optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by the discontinuation of the London Interbank Offered Rate (“LIBOR”) or by another reference rate expected to be discontinued. The amendments in this guidance are effective beginning on March 12, 2020, and the Company may elect to apply the amendments prospectively through December 31, 2022. The Company is working with its lender and currently evaluating the potential impact of this guidance on the Company’s financial statements and disclosures.

Special Note Regarding Smaller Reporting Company Status

Under SEC Release 33-10513; 34-83550, Amendments to Smaller Reporting Company Definition, the Company qualifies as a smaller reporting company and accordingly, it has scaled some of its disclosures of financial and non-financial information in this quarterly report. The Company will continue to determine whether to provide additional scaled disclosures of financial or non-financial information in future quarterly reports, annual reports and/or proxy statements if it remains a smaller reporting company under SEC rules.

B.	Inventories

The major classes of inventories were as follows:

	September 30, 2022		June 30, 2022
Inventories:
Finished parts	$	64,707	$	65,789
Work in process		22,216		19,801
Raw materials		41,177		41,519
	$	128,100	$	127,109

C.	Warranty

The Company engages in extensive product quality programs and processes, including actively monitoring and evaluating the quality of its suppliers. However, its warranty obligation is affected by product failure rates, the number of units affected by the failure and the expense involved in satisfactorily addressing the situation. The warranty reserve is established based on our best estimate of the amounts necessary to settle future and existing claims on products sold as of the balance sheet date. When evaluating the adequacy of the reserve for warranty costs, management takes into consideration the term of the warranty coverage, historical claim rates and costs of repair, knowledge of the type and volume of new products and economic trends. While we believe the warranty reserve is adequate and that the judgment applied is appropriate, such amounts estimated to be due and payable in the future could differ materially from what actually transpires. The following is a listing of the activity in the warranty reserve for the quarters ended September 30, 2022 and September 24, 2021:

	For the Quarter Ended
	September 30, 2022			September 24, 2021
Reserve balance, beginning of period	$	3,329		$	4,369
Current period expense and adjustments		908			(265	)
Payments or credits to customers		(366	)		(532	)
Translation		(67	)		(12	)
Reserve balance, end of period	$	3,804		$	3,560

The current portion of the warranty accrual ($3,331 and $2,947 as of September 30, 2022 and September 24, 2021, respectively) is reflected in accrued liabilities, while the long-term portion ($473 and $613 as of September 30, 2022 and September 24, 2021, respectively) is included in other long-term liabilities on the condensed consolidated balance sheets.

D.	Contingencies

The Company is involved in litigation of which the ultimate outcome and liability to the Company, if any, is not presently determinable. Management believes that final disposition of such litigation will not have a material impact on the Company’s results of operations, financial position or cash flows.

E.	Business Segments

The Company and its subsidiaries are engaged in the manufacture and sale of marine and heavy-duty off-highway power transmission equipment. Principal products include marine transmissions, azimuth drives, surface drives, propellers and boat management systems, as well as power-shift transmissions, hydraulic torque converters, power take-offs, industrial clutches and controls systems. The Company sells to both domestic and foreign customers in a variety of market areas, principally pleasure craft, commercial and military marine markets, as well as in the energy and natural resources, government and industrial markets. The Company's worldwide sales to both domestic and foreign customers are transacted through a direct sales force and a distributor network.

The Company has two reportable segments: manufacturing and distribution. These segment structures reflect the way management makes operating decisions and manages the growth and profitability of the business. It also corresponds with management’s approach of allocating resources and assessing the performance of its segments. The accounting practices of the segments are the same as those described in the summary of significant accounting policies. Transfers among segments are at established inter-company selling prices. Management evaluates the performance of its segments based on net income.

Information about the Company’s segments is summarized as follows:

	For the Quarter Ended
	September 30, 2022			September 24, 2021
Net sales
Manufacturing segment sales	$	48,997		$	41,594
Distribution segment sales		24,307			20,534
Inter/Intra segment elimination – manufacturing		(13,643	)		(10,942	)
Inter/Intra segment elimination – distribution		(3,748	)		(3,425	)
	$	55,913		$	47,761
Net (loss) income attributable to Twin Disc
Manufacturing segment net income	$	1,795		$	4,832
Distribution segment net income		956			483
Corporate and eliminations		(4,780	)		(3,395	)
	$	(2,029	)	$	1,920

	September 30, 2022			June 30, 2022
Assets
Manufacturing segment assets	$	361,904		$	364,174
Distribution segment assets		50,594			50,958
Corporate assets and elimination of intercompany assets		(142,947	)		(138,609	)
	$	269,551		$	276,523

Disaggregated revenue:

The following table presents details deemed most relevant to the users of the financial statements for the quarters ended September 30, 2022 and September 24, 2021.

Net sales by product group for the quarter ended September 30, 2022 is summarized as follows:

					Elimination of
	Manufacturing		Distribution		Intercompany Sales			Total
Industrial	$	6,692	$	1,048	$	(709	)	$	7,031
Land-based transmissions		16,287		4,606		(4,956	)	$	15,937
Marine and propulsion systems		25,816		14,544		(11,022	)	$	29,338
Other		202		4,109		(704	)	$	3,607
Total	$	48,997	$	24,307	$	(17,391	)	$	55,913

Net sales by product group for the quarter ended September 24, 2021 is summarized as follows:

					Elimination of
	Manufacturing		Distribution		Intercompany Sales			Total
Industrial	$	5,907	$	1,118	$	(893	)	$	6,132
Land-based transmissions		11,384		5,105		(4,247	)	$	12,242
Marine and propulsion systems		24,285		11,562		(9,214	)	$	26,633
Other		18		2,749		(13	)	$	2,754
Total	$	41,594	$	20,534	$	(14,367	)	$	47,761

F.	Stock-Based Compensation

Performance Stock Awards (“PSA”)

During the first quarter of fiscal 2023 and 2022, the Company granted a target number of 112.4 and 103.6 PSAs, respectively, to various employees of the Company, including executive officers. The fiscal 2023 PSAs will vest if the Company achieves performance-based target objectives relating to average return on invested capital and cumulative EBITDA (as defined in the PSA Grant Agreement), in the cumulative three fiscal year period ending June 30, 2025. These PSAs are subject to adjustment if the Company’s return on invested capital and cumulative EBITDA falls below or exceeds the specified target objective, and the maximum number of performance shares that can be awarded if the target objective is exceeded is 224.8. Based upon actual results to date, the Company is currently not accruing compensation expense for these PSAs.

The fiscal 2022 PSAs will vest if the Company achieves performance-based target objectives relating to average return on invested capital, average annual sales and average annual earnings per share (“EPS”) or average free cashflow (as defined in the PSA Grant Agreement), in the cumulative three fiscal year period ending June 30, 2024. These PSAs are subject to adjustment if the Company’s return on invested capital, net sales, and EPS or average free cashflow for the period falls below or exceeds the specified target objective, and the maximum number of performance shares that can be awarded if the target objective is exceeded is 146.6. Based upon actual results to date, the Company is currently accruing compensation expense for these PSAs.

There were 433.2 and 477.4 unvested PSAs outstanding at September 30, 2022 and September 24, 2021, respectively. The fair value of the PSAs (on the date of grant) is expensed over the performance period for the shares that are expected to ultimately vest. Compensation expense of $230 and $216 was recognized for the quarters ended September 30, 2022 and September 24, 2021, respectively, related to PSAs. The weighted average grant date fair value of the unvested awards at September 30, 2022 was $8.35. At September 30, 2022, the Company had $2,024 of unrecognized compensation expense related to the unvested shares that would vest if the specified target objective was achieved for the fiscal 2023 and 2022 awards. The total fair value of PSAs vested as of September 30, 2022 and September 24, 2021 was $0.

Restricted Stock Awards (“RS”)

The Company has unvested RS awards outstanding that will vest if certain service conditions are fulfilled. The fair value of the RS grants is recorded as compensation expense over the vesting period, which is generally 1 to 3 years. During the first quarter of fiscal 2023 and 2022, the Company granted 129.4 and 2.4 service based restricted shares, respectively, to employees and non-employee directors. There were 356.3 and 362.0 unvested shares outstanding at September 30, 2022 and September 24, 2021, respectively. A total of 0 and 6.9 shares of restricted stock were forfeited during the quarters ended September 30, 2022 and September 24, 2021, respectively. Compensation expense of $360 and $334 was recognized for the quarters ended September 30, 2022 and September 24, 2021, respectively. The total fair value of restricted stock grants vested as of September 30, 2022 and September 24, 2021 was $417 and $181, respectively. As of September 30, 2022, the Company had $1,446 of unrecognized compensation expense related to restricted stock which will be recognized over the next three years.

Restricted Stock Unit Awards (“RSU”)

Under the 2021 Long Term Incentive Plans, the Company has been authorized to issue RSUs. The RSUs entitle the employee to shares of common stock of the Company if the employee remains employed by the Company through a specified date, generally three years from the date of grant or when performance conditions have been met.. The fair value of the RSUs (on the date of grant) is recorded as compensation expense over the vesting period. During the first quarter of fiscal 2023 and 2022, the Company granted 72.4 and 65.6 of employment based RSUs, respectively. There were 130.9 and 65.5 unvested RSUs outstanding at September 30, 2022 and September 24, 2021, respectively. Compensation expense of $69 and $74 was recognized for the quarters ended September 30, 2022 and September 24, 2021, respectively. The total fair value of restricted stock units vested as of September 30, 2022 and September 24, 2021 was $40 and $475, respectively. The weighted average grant date fair value of the unvested awards at September 30, 2022 was $10.94. As of September 30, 2022, the Company had $1,106 of unrecognized compensation expense related to restricted stock which will be recognized over the next three years.

G.	Pension and Other Postretirement Benefit Plans

The Company has non-contributory, qualified defined benefit plans covering substantially all domestic employees hired prior to October 1, 2003 and certain foreign employees. Additionally, the Company provides healthcare and life insurance benefits for certain domestic retirees. The components of the net periodic benefit cost for the defined benefit pension plans and the other postretirement benefit plan are as follows:

	For the Quarter Ended
	September 30, 2022			September 24, 2021
Pension Benefits:
Service cost	$	101		$	139
Prior service cost		8			10
Interest cost		868			666
Expected return on plan assets		(1,060	)		(1,259	)
Amortization of transition obligation		9			9
Amortization of prior service cost		9			(4	)
Amortization of actuarial net loss		617			562
Net periodic benefit cost	$	553		$	123

Postretirement Benefits:
Service cost	$	2		$	4
Interest cost		53			35
Amortization of prior service cost		(69	)		(69	)
Amortization of actuarial net loss		(10	)		-
Net periodic benefit gain	$	(23	)	$	(30	)

The service cost component is included in cost of goods sold and marketing, engineering and administrative expenses. All other components of net periodic benefit cost are included in other expense (income), net.

The Company expects to contribute approximately $576 to its pension plans in fiscal 2023. As of September 30, 2022, $143 in contributions to the pension plans have been made.

The Company has reclassified $518 (net of $1 in taxes) of benefit plan adjustments from accumulated other comprehensive loss during the quarter ended September 30, 2022, and $384 (net of $117 in taxes) during the quarter ended September 24, 2021. These reclassifications are included in the computation of net periodic benefit cost.

H.	Income Taxes

Accounting policies for interim reporting require the Company to adjust its effective tax rate each quarter to be consistent with the estimated Annual Effective Tax Rate (AETR). Under this effective tax rate methodology, the Company applies an estimated annual income tax rate to its year-to-date ordinary earnings to derive its income tax provision each quarter. To calculate its AETR, an entity must estimate its ordinary income or loss and the related tax expense or benefit for its full fiscal year. In situations in which an entity is in a loss position and recognizes a full valuation allowance, the guidance in ASC 740-270-25-9 applies. Due to continued losses and uncertain future domestic earnings, the Company recognizes a full US valuation allowance. Permanent differences continue to fluctuate and are significant compared to projected ordinary income. Therefore, per ASC guidance, the fully valued domestic entity was removed from the annualized effective rate calculation. Because of the full US valuation allowance, the US entity may only recognize tax expense / benefit recorded for ASC 740-10 adjustments.

For the three months ended September 30, 2022 and September 24, 2021 the Company’s effective income tax rate was 26.3% and 16.2% respectively. The mix of foreign earnings by jurisdiction resulted in an increase in the effective tax rate of 9.6%.

In the post pandemic era, the Company continues to monitor for any revisions enacted under the Tax Cuts and Job Act (TCJA), Coronavirus Aid, Relief and Economic Security (CARES) Act and the American Rescue Plan (ARPA). On August 16, 2022, President Biden signed the Inflation Reduction Act (IRA). This landmark United States law aims to reduce inflation by reducing the deficit, lowering prescription drug prices and investing into domestic energy production while promoting clean energy. At this time, it is not certain what, if any, impact this will have on the Company.

The Company maintains valuation allowances when it is more likely than not that all or a portion of a deferred tax asset will not be realized. Changes in valuation allowances from period to period are included in the tax provision in the period of change. In determining whether a valuation allowance is required, the Company takes into account such factors as prior earnings history, expected future earnings, carry-back and carry-forward periods, and tax strategies that could potentially enhance the likelihood of realization of a deferred tax asset. In addition, all other available positive and negative evidence is taken into consideration, including all new impacts of tax reform. The Company has evaluated the realizability of the net deferred tax assets related to its foreign operations and based on this evaluation management has concluded that no valuation allowances are required. However, due to continued historical domestic losses and uncertain future domestic earnings, the company continues to recognize a full domestic valuation allowance.

The Company has approximately $772 of unrecognized tax benefits, which include $53 of related interest and penalties, as of September 30, 2022, which, if recognized, would favorably impact the effective tax rate. There were no significant changes in the total unrecognized tax benefits due to the settlement of audits, the expiration of statutes of limitations or for other items during the quarter ended September 30, 2022. It appears possible that the amount of unrecognized tax benefits could change in the next twelve months due to on-going activity.

Annually, the Company files income tax returns in various taxing jurisdictions inside and outside the United States. In general, the tax years that remain subject to examination in foreign jurisdictions are 2014 through 2021. The tax year open to exam in the Netherlands is 2019. The tax years open to examination in the U.S. are for years subsequent to fiscal 2017. It is reasonably possible that other audit cycles will be completed during fiscal 2023.

I.	Intangible Assets

As of September 30, 2022, the following acquired intangible assets have definite useful lives and are subject to amortization:

	Net Book Value Rollforward									Net Book Value By Asset Type
	Gross Carrying Amount			Accumulated Amortization / Impairment			Net Book Value			Customer Relationships			Technology Know-how			Trade Name			Other
Balance at June 30, 2022	$	39,845		$	(26,835	)	$	13,010		$	7,636		$	3,238		$	972		$	1,164
Addition		9			-			9			-			-			-			9
Reduction		(10,506	)		10,506			-
Amortization		-			(698	)		(698	)		(323	)		(260	)		(39	)		(76	)
Translation adjustment		(761	)		-			(761	)		(487	)		0			(265	)		(9	)
Balance at September 30, 2022	$	28,587		$	(17,027	)	$	11,560		$	6,826		$	2,978		$	668		$	1,088

Other intangibles consist mainly of computer software. Amortization is recorded on the basis of straight-line or accelerated, as appropriate, over the estimated useful lives of the assets.

The weighted average remaining useful life of the intangible assets included in the table above is approximately 7 years.

Intangible amortization expense was $698 and $826 for the quarters ended September 30, 2022, and September 24, 2021, respectively. Estimated intangible amortization expense for the remainder of fiscal 2023 and each of the next five fiscal years is as follows:

Fiscal Year
2023	$	2,013
2024		2,582
2025