twin20230930

twin20230930_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 29, 2023

☐ 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.)

222 East Erie Street, Suite 400, Milwaukee, Wisconsin 53202

(Address of principal executive offices)

(262) 638-4000

(Registrant's telephone number, including area code)

1328 Racine Street, Racine, Wisconsin 53403

(Former name or former address, if changed since last report)

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 25, 2023, the registrant had 13,960,861 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 29, 2023			June 30, 2023
ASSETS
Current assets:
Cash	$	20,428		$	13,263
Trade accounts receivable, net		39,756			54,760
Inventories		126,236			131,930
Assets held for sale		4,559			2,968
Prepaid expenses		9,466			8,459
Other		8,763			8,326
Total current assets		209,208			219,706

Property, plant and equipment, net		40,065			38,650
Right-of-use assets operating leases		12,093			13,133
Intangible assets, net		11,517			12,637
Deferred income taxes		2,204			2,244
Other assets		2,894			2,811

Total assets	$	277,981		$	289,181

LIABILITIES AND EQUITY
Current liabilities:
Current maturities of long-term debt	$	2,002		$	2,010
Accounts payable		29,584			36,499
Accrued liabilities		60,632			61,586
Total current liabilities		92,218			100,095

Long-term debt		19,655			16,617
Lease obligations		9,896			10,811
Accrued retirement benefits		7,138			7,608
Deferred income taxes		3,150			3,280
Other long-term liabilities		5,749			5,253
Total liabilities		137,806			143,664

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		39,439			42,855
Retained earnings		119,126			120,299
Accumulated other comprehensive loss		(8,621	)		(5,570	)
		149,944			157,584
Less treasury stock, at cost (674,354 and 814,734 shares, respectively)		10,343			12,491

Total Twin Disc shareholders' equity		139,601			145,093

Noncontrolling interest		574			424
Total equity		140,175			145,517

Total liabilities and equity	$	277,981		$	289,181

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

(IN THOUSANDS, EXCEPT PER SHARE DATA)

(UNAUDITED)

	For the Quarter-Ended
				As Adjusted
	September 29, 2023			September 30, 2022

Net sales	$	63,554		$	55,913
Cost of goods sold		43,818			42,616
Cost of goods sold - Sale of boat management system product line and related inventory		3,099			-
Gross profit		16,637			13,297

Marketing, engineering and administrative expenses		16,917			15,090
Loss from operations		(280	)		(1,793	)

Other Income (expense):
Interest expense		(394	)		(566	)
Other income, net		137			347
		(257	)		(219	)
Loss before income taxes and noncontrolling interest		(537	)		(2,012	)

Income tax expense		546			(688	)
Net loss		(1,083	)		(1,324	)
Less: Net earnings attributable to noncontrolling interest, net of tax		(90	)		(98	)
Net loss attributable to Twin Disc	$	(1,173	)	$	(1,422	)

Loss per share data:
Basic loss per share attributable to Twin Disc common shareholders	$	(0.09	)	$	(0.11	)
Diluted loss per share attributable to Twin Disc common shareholders	$	(0.09	)	$	(0.11	)

Weighted average shares outstanding data:
Basic shares outstanding		13,527			13,407
Diluted shares outstanding		13,527			13,407

Comprehensive income (loss)
Net loss	$	(1,083	)	$	(1,324	)
Benefit plan adjustments, net of income taxes of $5 and $9, respectively		(171	)		(89	)
Foreign currency translation adjustment

SEC Form 10-Q filed by Twin Disc Incorporated