Twin Disc Announces Full Year and Fourth Quarter 2026 Results
Rhea-AI Summary
Twin Disc (NASDAQ:TWIN) reported fiscal 2026 net sales of $381.3 million, up 11.9%, with Q4 sales of $114.4 million, up 18.3%. Full-year net income attributable to Twin Disc was $27.1 million ($1.86 diluted EPS) versus a prior-year loss, while EBITDA rose 48.0% to $29.9 million.
Gross margin for fiscal 2026 was 26.9%, down about 70 bps, and Q4 gross margin fell roughly 600 bps to 26.3%, mainly from product mix and a prior-year favorable adjustment. Free cash flow was $9.2 million for the year and $17.2 million in Q4, supporting a reduction in total debt to $29.8 million and net debt to $13.8 million. Six‑month backlog stood at $178.3 million. During Q4, Twin Disc changed certain inventories from LIFO to FIFO, increasing prior-year inventory by $32.1 million and recasting historical figures. The company also highlighted a new $90 million credit facility and maintained an annual dividend of $0.16 per share.
Positive
- Net sales up 11.9% to $381.3 million in FY 2026
- Q4 2026 sales up 18.3% year-over-year to $114.4 million
- Net income $27.1 million vs. $0.7 million loss in FY 2025
- EBITDA up 48.0% to $29.9 million in FY 2026
- Free cash flow $9.2 million FY and $17.2 million in Q4
- Six‑month backlog approximately $178.3 million at June 30, 2026
- Net debt reduced to $13.8 million from $15.3 million year-over-year
- $90 million credit facility adds financial flexibility for growth investments
Negative
- Q4 gross margin down ~600 bps to 26.3% year-over-year
- FY 2026 gross margin down ~70 bps to 26.9%
- Q4 gross profit decreased 3.5% to $30.1 million
- Industrial segment Q4 sales declined 1.6% year-over-year
- ME&A expense up 2.5% for the full year to $84.5 million
- Cash balance slightly lower at $16.0 million vs. $16.1 million prior year
News Explained
Twin Disc has reported completed fiscal 2026 results; its
Market reaction after FY26 earnings report: TWIN +3.46%
Following this news, TWIN has gained 3.46%, reflecting a moderate positive market reaction. Our momentum scanner has triggered 5 alerts so far, indicating moderate trading interest and price volatility. The stock is currently trading at $24.50.
Data tracked by StockTitan Argus (15 min delayed). Upgrade to Gold for real-time data.
Key Figures
Previous Earnings Reports
| Date | Event | Sentiment | 24h Move | Catalyst |
|---|---|---|---|---|
| May 06 | Third-quarter results | Positive | +14.2% | Sales, margins, net income, and EBITDA improved alongside stronger defense demand. |
| Feb 04 | Second-quarter results | Neutral | -15.0% | Sales were nearly flat while tax benefits lifted earnings and acquisition debt increased. |
| Nov 05 | First-quarter results | Negative | -1.4% | The company reported a net loss despite higher sales and improving defense demand. |
| May 07 | Third-quarter results | Negative | +6.2% | Net loss, lower EBITDA, and margin compression offset higher sales and backlog. |
| Feb 05 | Second-quarter results | Neutral | -2.8% | Sales and organic growth increased while margins declined and net income remained flat. |
24h Move is the share-price change in the day after each event; other market factors may also have contributed.
Tagged earnings events produced mixed reactions, with both positive and negative outcomes despite generally improving operating results.
Key Terms
ebitda financial
free cash flow financial
lifo financial
fifo financial
valuation allowance financial
AI-generated analysis. How Rhea-AI works. Not financial advice.
MILWAUKEE, Aug. 20, 2026 (GLOBE NEWSWIRE) -- Twin Disc, Inc. (NASDAQ: TWIN) today reported results for the fourth quarter and full fiscal year ended June 30, 2026.
Fiscal Full Year 2026 Highlights
- Sales increased
11.9% year-over-year to$381.3 million - Net income attributable to Twin Disc was
$27.1 million - EBITDA* of
$29.9 million , including a currency translation gain of$1.7 million - Operating cash flow of
$22.9 million and Free cash flow* of$9.2 million - Six-month backlog of
$178.3 million
Fiscal Fourth Quarter 2026 Highlights
- Sales increased
18.3% year-over-year to$114.4 million - Net income attributable to Twin Disc was
$9.4 million - EBITDA* of
$11.1 million , including a currency translation gain of$0.8 million - Operating cash flow of
$20.6 million and Free cash flow* of$17.2 million
CEO Perspective
John H. Batten, President and Chief Executive Officer of Twin Disc, commented, “We closed fiscal 2026 with record fourth quarter revenue, solid profitability, and enhanced free cash flow generation, building on the strong demand and order momentum that we saw throughout the fiscal year. Fourth quarter 2026 sales grew
“Our six-month backlog remained level in the quarter despite strong shipments and a concerted effort to reduce past due backlog,” Mr. Batten continued. “Our near-term outlook remains strong and continues to be supported by a robust project pipeline and momentum in the markets that we serve.
“As we move into fiscal 2027, we are well positioned with strong demand, a healthy backlog and growing pipeline, and free cash flow to continue investing in the long-term growth of our business. We remain focused on the disciplined execution of our strategy and are highly encouraged by the growth opportunities ahead of us,” Mr. Batten concluded.
Change in Inventory Accounting Method
During the fourth quarter of fiscal 2026, the Company elected to change its method of accounting for certain inventories from the last-in, first out (LIFO) method to the first-in, first out (FIFO) method. The change to the FIFO method of accounting for these inventories is preferable because it provides better matching of costs and revenues, conforms the Company's inventory to a single method of accounting and improves comparability with the Company's peers. The impact of the change in inventory accounting as reported under the FIFO method was a
Fourth Quarter and Full-Year Results
Sales for the fiscal 2026 fourth quarter increased
Sales by product group (certain amounts have been reclassified from Marine and Propulsion to Other):
| Product Group | Q4 FY26 Sales | Q4 FY25 Sales | Change (%) | |||
| (Thousands of $): | ||||||
| Marine and Propulsion Systems | $ | 63,596 | $ | 53,010 | 20.00 | % |
| Land-Based Transmissions | 32,962 | 26,122 | 26.20 | % | ||
| Industrial | 12,934 | 13,141 | -1.60 | % | ||
| Other | 4,908 | 4,405 | 11.40 | % | ||
| Total | $ | 114,400 | $ | 96,678 | 18.30 | % |
| Product Group | FY26 Sales | FY25 Sales | Change (%) | |||
| (Thousands of $): | ||||||
| Marine and Propulsion Systems | $ | 227,675 | $ | 201,101 | 13.20 | % |
| Land-Based Transmissions | 89,698 | 80,192 | 11.90 | % | ||
| Industrial | 46,067 | 41,502 | 11.00 | % | ||
| Other | 17,830 | 17,943 | -0.60 | % | ||
| Total | $ | 381,270 | $ | 340,738 | 11.90 | % |
For fiscal 2026, Twin Disc delivered double-digit sales growth year-over-year in the European and North American regions including the impact of acquisitions. The distribution of sales across geographical regions remained consistent, with the majority of sales coming from Europe, followed by North America, Asia Pacific, and Latin America.
Considering the impact of the change to the FIFO method of accounting for inventory (an increase to prior year gross profit of approximately
Marketing, engineering and administrative (ME&A) expense decreased by
Considering the impact of the change to the FIFO method of accounting for inventory, net income attributable to Twin Disc for the quarter was
On a consolidated basis, the backlog of orders to be shipped over the next six months is approximately
CFO Perspective
Jeffrey S. Knutson, Vice President of Finance, Chief Financial Officer, Treasurer, and Secretary, stated, “Our fourth quarter results capped off a year of strong sales performance, profitability, and cash flow generation that were aligned with our long-term goals and targets. EBITDA grew
Discussion of Results
Twin Disc will host a conference call to discuss these results and to answer questions at 9:00 a.m. Eastern time on August 20, 2026. The live audio webcast will be available on Twin Disc’s website at https://ir.twindisc.com. To participate in the conference call, please dial (646) 307-1963 approximately ten minutes before the call is scheduled to begin. A replay of the webcast will be available at https://ir.twindisc.com shortly after the call until August 21, 2027.
About Twin Disc
Twin Disc, Inc. designs, manufactures, and sells marine and heavy-duty off-highway power transmission equipment. Products offered 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, control systems, and braking systems. The Company sells its products to customers primarily in the pleasure craft, commercial and military marine markets, as well as in the energy and natural resources, government, military 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. For more information, please visit www.twindisc.com.
Forward-Looking Statements
This press release may contain statements that are forward looking as defined by the Securities and Exchange Commission in its rules, regulations, and releases. The words “anticipates,” “believes,” “intends,” “estimates,” and “expects,” or similar anticipatory expressions, usually identify forward-looking statements. The Company intends that such forward-looking statements qualify for the safe harbors from liability established by the Private Securities Litigation Reform Act of 1995. All forward-looking statements are based on current expectations and are subject to certain risks and uncertainties that could cause actual results or outcomes to differ materially from current expectations. Such risks and uncertainties include the impact of general economic conditions and the cyclical nature of many of the Company’s product markets; foreign currency risks and other risks associated with the Company’s international sales and operations; the ability of the Company to successfully implement price increases to offset increasing commodity costs; the ability of the Company to generate sufficient cash to pay its indebtedness as it becomes due; and the possibility of unforeseen tax consequences and the impact of tax reform in the U.S. or other jurisdictions. These and other risks are described under the caption “Risk Factors” in Item 1A of the Company’s most recent Form 10-K filed with the Securities and Exchange Commission, as supplemented in subsequent periodic reports filed with the Securities and Exchange Commission. Accordingly, the making of such statements should not be regarded as a representation by the Company or any other person that the results expressed therein will be achieved. The Company assumes no obligation, and disclaims any obligation, to publicly update or revise any forward-looking statements to reflect subsequent events, new information, or otherwise.
*Non-GAAP Financial Information
Financial information excluding the impact of asset impairments, restructuring charges, foreign currency exchange rate changes and the impact of acquisitions, if any, in this press release are not measures that are defined in U.S. Generally Accepted Accounting Principles (“GAAP”). These items are measures that management believes are important to adjust for in order to have a meaningful comparison to prior and future periods and to provide a basis for future projections and for estimating our earnings growth prospects. Non-GAAP measures are used by management as a performance measure to judge profitability of our business absent the impact of foreign currency exchange rate changes and acquisitions. Management analyzes the company’s business performance and trends excluding these amounts. These measures, as well as EBITDA, provide a more consistent view of performance than the closest GAAP equivalent for management and investors. Management compensates for this by using these measures in combination with the GAAP measures. The presentation of the non-GAAP measures in this press release are made alongside the most directly comparable GAAP measures.
Definitions
Organic net sales is defined as net sales excluding the recent acquisition of Kobelt while adjusting for the effects of foreign currency exchange.
Earnings before interest, taxes, depreciation, and amortization (EBITDA) is calculated as net earnings or loss excluding interest expense, the provision or benefit for income taxes, depreciation, and amortization expenses.
Net debt is calculated as total debt less cash.
Free cash flow is calculated as net cash provided (used) by operating activities less acquisition of fixed assets.
Investors:
IMS Investor Relations
twindisc@imsinvestorrelations.com
Source: Twin Disc, Incorporated
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND | ||||||||||||
| COMPREHENSIVE INCOME (LOSS) | ||||||||||||
| (In thousands, except per-share data; unaudited) | ||||||||||||
| For the Quarter Ended | For the Year Ended | |||||||||||
| As Adjusted | As Adjusted | |||||||||||
| June 30, 2026 | June 30, 2025 | June 30, 2026 | June 30, 2025 | |||||||||
| Net sales | $ | 114,400 | $ | 96,678 | $ | 381,270 | $ | 340,738 | ||||
| Cost of goods sold | 84,273 | 65,463 | 278,710 | 245,236 | ||||||||
| Cost of goods sold - other | - | - | - | 1,579 | ||||||||
| Gross profit | 30,127 | 31,215 | 102,560 | 93,923 | ||||||||
| Marketing, engineering and administrative expenses | 22,157 | 24,621 | 84,455 | 82,431 | ||||||||
| Restructuring expenses | 57 | 52 | 366 | 408 | ||||||||
| Other operating income | 98 | - | (221 | ) | - | |||||||
| Income (loss) from operations | 7,815 | 6,542 | 17,960 | 11,084 | ||||||||
| Other income (expense): | ||||||||||||
| Interest expense | (715 | ) | (855 | ) | (3,078 | ) | (2,646 | ) | ||||
| Other income (expense), net | (168 | ) | (2,946 | ) | (1,286 | ) | (5,472 | ) | ||||
| (883 | ) | (3,801 | ) | (4,364 | ) | (8,118 | ) | |||||
| Income (loss) before income taxes and noncontrolling interest | 6,932 | 2,741 | 13,596 | 2,966 | ||||||||
| Income tax benefit (expense) | 2,477 | (47 | ) | 13,974 | (3,368 | ) | ||||||
| Net income (loss) | 9,409 | 2,694 | 27,570 | (402 | ) | |||||||
| Less: Net income (loss) attributable to noncontrolling interest, net of tax | 49 | 72 | 493 | 295 | ||||||||
| Net income (loss) attributable to Twin Disc, Incorporated | $ | 9,360 | $ | 2,622 | $ | 27,077 | $ | (697 | ) | |||
| Dividends per share | $ | 0.04 | $ | 0.04 | $ | 0.16 | $ | 0.16 | ||||
| Earnings (loss) per share data: | ||||||||||||
| Basic earnings (loss) per share attributable to Twin Disc, Incorporated common shareholders | $ | 0.66 | $ | 0.19 | $ | 1.92 | $ | (0.05 | ) | |||
| Diluted earnings (loss) per share attributable to Twin Disc, Incorporated common shareholders | $ | 0.64 | $ | 0.19 | $ | 1.86 | $ | (0.05 | ) | |||
| Weighted average shares outstanding data: | ||||||||||||
| Basic shares outstanding | 14,199 | 13,897 | 14,119 | 13,856 | ||||||||
| Diluted shares outstanding | 14,666 | 13,938 | 14,586 | 13,856 | ||||||||
| Comprehensive income (loss) | ||||||||||||
| Net income (loss) | $ | 9,409 | $ | 2,694 | $ | 27,570 | $ | (402 | ) | |||
| Benefit plan adjustments, net of income taxes of | 959 | (2,153 | ) | 2,708 | (3,399 | ) | ||||||
| Foreign currency translation adjustment | (1,566 | ) | 15,885 | (6,129 | ) | 15,924 | ||||||
| Unrealized gain (loss) on hedges, net of income taxes of ( | (416 | ) | (1,491 | ) | (155 | ) | (1,851 | ) | ||||
| Comprehensive income (loss) | 8,386 | 14,935 | 23,994 | 10,272 | ||||||||
| Less: Comprehensive income (loss) attributable to noncontrolling interest | (123 | ) | (6 | ) | 359 | 334 | ||||||
| Comprehensive income (loss) attributable to Twin Disc, Incorporated | $ | 8,509 | $ | 14,941 | $ | 23,635 | $ | 9,938 | ||||
| RECONCILIATION OF CONSOLIDATED NET INCOME TO EBITDA | ||||||||||||||
| (In thousands; unaudited) | ||||||||||||||
| For the Quarter Ended | For the Year Ended | |||||||||||||
| As Adjusted | As Adjusted | |||||||||||||
| June 30, 2026 | June 30, 2025 | June 30, 2026 | June 30, 2025 | |||||||||||
| Net income (loss) attributable to Twin Disc, Incorporated | $ | 9,360 | $ | 2,622 | $ | 27,077 | $ | (697 | ) | |||||
| Interest expense | 715 | 855 | 3,078 | 2,646 | ||||||||||
| Income tax expense (benefit) | (2,477 | ) | 47 | (13,974 | ) | 3,368 | ||||||||
| Depreciation and amortization | 3,520 | 4,705 | 13,746 | 14,899 | ||||||||||
| Earnings before interest, taxes, depreciation and amortization (EBITDA) | $ | 11,118 | $ | 8,229 | $ | 29,927 | $ | 20,216 | ||||||
| RECONCILIATION OF NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES TO FREE CASH FLOW | |||||||||||||||
| (In thousands; unaudited) | |||||||||||||||
| For the Quarter Ended | For the Years Ended | ||||||||||||||
| June 30, 2026 | June 30, 2025 | June 30, 2026 | June 30, 2025 | ||||||||||||
| Net cash provided (used) by operating activities | $ | 20,562 | $ | 16,448 | $ | 22,899 | $ | 23,979 | |||||||
| Acquisition of capital expenditures | (3,407 | ) | (7,705 | ) | (13,713 | ) | (15,157 | ) | |||||||
| Free cash flow | $ | 17,155 | $ | 8,743 | $ | 9,186 | $ | 8,822 | |||||||
| RECONCILIATION OF TOTAL DEBT TO NET DEBT | ||||||
| (In thousands; unaudited) | ||||||
| June 30, 2026 | June 30, 2025 | |||||
| Current maturities of long-term debt | $ | 1,500 | $ | 3,000 | ||
| Long-term debt | 28,310 | 28,446 | ||||
| Total debt | 29,810 | 31,446 | ||||
| Less cash | 16,029 | 16,109 | ||||
| Net debt | $ | 13,781 | $ | 15,337 | ||
| RECONCILIATION OF REPORTED NET SALES TO ORGANIC NET SALES | |||||
| (In thousands; unaudited) | |||||
| For the Year Ended | |||||
| June 30, 2026 | June 30, 2025 | ||||
| Net Sales | $ | 381,270 | $ | 340,738 | |
| Less: Acquisition | 7,550 | - | |||
| Less: Foreign Currency Impact | 17,225 | - | |||
| Organic Net Sales | $ | 356,495 | $ | 340,738 | |
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||
| (In thousands; except share amounts, unaudited) | ||||
| As Adjusted | ||||
| June 30, 2026 | June 30, 2025 | |||
| ASSETS | ||||
| Current assets: | ||||
| Cash | $ | 16,029 | $ | 16,109 |
| Trade accounts receivable, net | 66,761 | 58,941 | ||
| Inventories, net | 178,028 | 184,085 | ||
| Other current assets | 17,397 | 19,914 | ||
| Total current assets | 278,215 | 279,049 | ||
| Property, plant and equipment, net | 68,094 | 69,576 | ||
| Right-of-use assets operating lease assets | 14,730 | 17,250 | ||
| Goodwill | 2,772 | 2,892 | ||
| Intangible assets, net | 14,121 | 13,361 | ||
| Deferred income taxes | 21,093 | 2,812 | ||
| Other noncurrent assets | 2,220 | 2,756 | ||
| Total assets | $ | 401,245 | $ | 387,696 |
| LIABILITIES AND EQUITY | ||||
| Current liabilities: | ||||
| Current maturities of long-term debt | $ | 1,500 | $ | 3,000 |
| Current maturities of right-of-use operating lease obligations | 3,527 | 3,393 | ||
| Accounts payable | 30,809 | 38,745 | ||
| Accrued liabilities | 82,739 | 80,655 | ||
| Total current liabilities | 118,575 | 125,793 | ||
| Long-term debt | 28,310 | 28,446 | ||
| Right-of-use lease obligations | 11,691 | 14,357 | ||
| Accrued retirement benefits | 10,429 | 11,832 | ||
| Deferred income taxes | 4,480 | 4,320 | ||
| Other long-term liabilities | 7,824 | 6,423 | ||
| Total liabilities | 181,309 | 191,171 | ||
| Twin Disc, Incorporated 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 | 40,252 | 42,269 | ||
| Retained earnings | 182,340 | 157,548 | ||
| Accumulated other comprehensive income (loss) | 288 | 3,730 | ||
| 222,880 | 203,547 | |||
| Less treasury stock, at cost (209,975 and 482,181 shares, respectively) | 3,226 | 7,402 | ||
| Total Twin Disc, Incorporated shareholders' equity | 219,654 | 196,145 | ||
| Noncontrolling interest | 282 | 380 | ||
| Total equity | 219,936 | 196,525 | ||
| Total liabilities and equity | $ | 401,245 | $ | 387,696 |
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||
| (In thousands; unaudited) | |||||||
| For the Year Ended | |||||||
| As Adjusted | |||||||
| June 30, 2026 | June 30, 2025 | ||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||
| Net income (loss) | $ | 27,570 | $ | (402 | ) | ||
| Adjustments to reconcile net income (loss) to net cash provided (used) by operating activities: | |||||||
| Depreciation and amortization | 13,746 | 14,899 | |||||
| Gain on sale of assets | (200 | ) | (98 | ) | |||
| Loss on write-down of industrial product inventory | - | 1,579 | |||||
| Restructuring charges | 139 | 39 | |||||
| Provision for deferred income taxes | (18,046 | ) | (1,581 | ) | |||
| Stock compensation expense and other non-cash changes, net | 3,322 | 5,333 | |||||
| Net change in operating assets and liabilities | (3,632 | ) | 4,210 | ||||
| Net cash provided (used) by operating activities | 22,899 | 23,979 | |||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||
| Acquisition of capital expenditures | (13,713 | ) | (15,157 | ) | |||
| Acquisition of Kobelt, less cash acquired | - | (17,236 | ) | ||||
| Proceeds from sale of property, plant, and equipment | 235 | 147 | |||||
| Other, net | (671 | ) | (653 | ) | |||
| Net cash provided (used) by investing activities | (14,149 | ) | (32,899 | ) | |||
| CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||
| Borrowings under long-term debt agreement | 30,000 | 6,500 | |||||
| Borrowings under revolving loan arrangements | 114,526 | 122,264 | |||||
| Repayments of revolving loan arrangements | (131,941 | ) | (122,264 | ) | |||
| Repayments of other long-term debt | (13,500 | ) | (2,500 | ) | |||
| Payments of right-of-use finance lease obligations | (1,246 | ) | (1,119 | ) | |||
| Dividends paid to shareholders | (2,285 | ) | (2,284 | ) | |||
| Dividends paid to noncontrolling interest | (457 | ) | (306 | ) | |||
| Cash used in net share settlement of restricted stock units | (11 | ) | - | ||||
| Payments of withholding taxes on stock compensation | (1,675 | ) | (1,256 | ) | |||
| Net cash provided (used) by financing activities | (6,589 | ) | (965 | ) | |||
| Effect of exchange rate changes on cash | (2,241 | ) | 5,924 | ||||
| Net change in cash | (80 | ) | (3,961 | ) | |||
| Cash: | |||||||
| Beginning of period | 16,109 | 20,070 | |||||
| End of period | $ | 16,029 | $ | 16,109 | |||
