Twin Disc Announces Second Quarter Results

Rhea-AI Summary

Twin Disc (NASDAQ: TWIN) reported fiscal Q2 2026 results for the quarter ended December 26, 2025: sales $90.2M (up 0.3% YoY), gross margin 24.8%, net income $22.4M ($1.55 diluted) and EBITDA $4.7M. Six-month backlog rose to $175.3M. Cash $14.9M; total debt increased to $44.5M following the Kobelt acquisition. Company cited tariff-related shipment timing headwinds and a one-time domestic valuation allowance reversal that drove the year-over-year earnings change.

Positive

• Record six-month backlog of $175.3M
• Positive operating cash flow of $4.6M and free cash flow of $1.2M in the quarter
• Industrial product group sales up 22.0% year-over-year

Negative

• Net income inflated by a $21.8M income tax benefit from reversal of valuation allowance
• Total debt increased 79% to $44.5M, raising net debt to $29.6M
• EBITDA declined 25% year-over-year to $4.7M

News Market Reaction

-14.96%

10 alerts

-14.96% News Effect

-12.6% Trough in 1 hr 47 min

-$44M Valuation Impact

$247M Market Cap

1.3x Rel. Volume

On the day this news was published, TWIN declined 14.96%, reflecting a significant negative market reaction. Argus tracked a trough of -12.6% from its starting point during tracking. Our momentum scanner triggered 10 alerts that day, indicating notable trading interest and price volatility. This price movement removed approximately $44M from the company's valuation, bringing the market cap to $247M at that time.

Data tracked by StockTitan Argus on the day of publication.

Key Figures

Q2 FY2026 Sales: $90.2M Gross Margin: 24.8% Net Income: $22.4M +5 more

8 metrics

Q2 FY2026 Sales $90.2M Fiscal Q2 2026 net sales, up 0.3% year-over-year

Gross Margin 24.8% Fiscal Q2 2026 gross margin, up 70 basis points year-over-year

Net Income $22.4M Q2 FY2026 net income attributable to Twin Disc

EBITDA $4.7M Q2 FY2026 EBITDA, down 25.0% year-over-year

Six-month backlog $175.3M Backlog of orders to be shipped over the next six months

Free cash flow $1.2M Q2 FY2026 free cash flow generated during the quarter

Total debt $44.5M Total debt as of December 26, 2025, up 79.0% year-over-year

Net debt $29.6M Net debt as of December 26, 2025, increased by $20.7M year-over-year

Market Reality Check

Price: $16.14 Vol: Volume 74,329 is 2.12x th...

high vol

$16.14 Last Close

Volume Volume 74,329 is 2.12x the 20-day average of 35,102, indicating elevated interest ahead of and around the earnings release. high

Technical Shares at $18.98 are trading above the 200-day MA of $12.21 and sit 3.31% below the $19.63 52-week high.

Peers on Argus

TWIN gained 6.27%, while key peers were mixed: BW +7.94%, TAYD +4.32%, HURC +1.0...

1 Up

TWIN gained 6.27%, while key peers were mixed: BW +7.94%, TAYD +4.32%, HURC +1.05% versus NPWR -2.99% and ZJK -2.05%. Momentum scanner only flagged OPTT +4.08%, reinforcing a stock‑specific reaction.

Previous Earnings Reports

5 past events · Latest: Nov 05 (Positive)

Same Type Pattern 5 events

Date	Event	Sentiment	Move	Catalyst
Nov 05	Quarterly earnings	Positive	-1.4%	Q1 FY2026 sales growth and margin expansion but small net loss reported.
May 07	Quarterly earnings	Negative	+6.2%	Q3 FY2025 revenue growth offset by net loss and weaker EBITDA, margins.
Feb 05	Quarterly earnings	Positive	-2.8%	Q2 FY2025 strong sales and EBITDA with gross margin hit from write‑down.
Nov 06	Quarterly earnings	Positive	+1.8%	Q1 FY2025 sales growth and margin expansion despite continued net loss.
Aug 15	Full-year earnings	Positive	+4.7%	FY2024 sales and EBITDA growth with solid free cash flow and marine demand.

Pattern Detected

Across recent earnings, TWIN often showed strong sales or backlog metrics but saw mixed price reactions. Three of the last five earnings releases had negative next‑day moves despite generally positive operational trends, while two events with strong full‑year or quarterly results produced gains. This mix suggests that earnings‑day reactions have alternated between alignment and divergence, with tax, margin, and leverage developments influencing how investors responded to each report.

Recent Company History

Over the last several earnings cycles, Twin Disc has reported consistent revenue growth and a robust six‑month backlog, with figures such as $144.3M, $124.0M, and $163.3M. EBITDA has remained positive, including $4.7M in Q1 FY2026 and $4.0M in Q3 FY2025, even when net income dipped into modest losses. Debt increased following acquisitions like Katsa and Kobelt, while marine and propulsion products supported growth. Today’s Q2 FY2026 results continue themes of backlog strength, margin focus, and acquisition integration.

Historical Comparison

earnings

+1.7 %

Average Historical Move

Historical Analysis

In the past five earnings-related releases, TWIN’s average next-day move was about 1.68%. Today’s 6.27% gain is meaningfully larger than typical earnings reactions for the stock.

Typical Pattern

Earnings releases show a progression of steady revenue growth and robust six‑month backlog, alongside rising debt tied to acquisitions and ongoing focus on marine and propulsion markets.

Market Pulse Summary

The stock dropped -15.0% in the session following this news. A negative reaction despite the Q2 FY20...

Analysis

The stock dropped -15.0% in the session following this news. A negative reaction despite the Q2 FY2026 report would have fit TWIN’s history of mixed responses to earnings. The quarter showed modest sales growth to $90.2M, a 24.8% gross margin and EBITDA of $4.7M, but organic net sales declined and EBITDA fell year-over-year. Total debt rose to $44.5M and net debt to $29.6M, which some investors might have focused on. Prior earnings often saw divergence between operational progress and short-term price moves.

Key Terms

ebitda, free cash flow, net debt, organic net sales, +4 more

8 terms

ebitda financial

"Net income attributable to Twin Disc was $22.4 million and EBITDA* of $4.7 million"

EBITDA stands for earnings before interest, taxes, depreciation, and amortization. It measures a company's profitability by focusing on the money it makes from its core operations, ignoring expenses like taxes and accounting adjustments. Investors use EBITDA to compare how well different companies are performing financially, as it provides a clearer picture of operational success without the influence of financial structure or accounting choices.

free cash flow financial

"Free Cash Flow* of $1.2 million during the quarter"

Free cash flow is the amount of money a company has left over after paying all its expenses and investing in its business, like buying equipment or updating facilities. It shows how much cash is available to reward shareholders, pay down debt, or save for future growth. This helps investors understand if a company is financially healthy and able to grow.

net debt financial

"net debt* increased $20.7 million to $29.6 million"

Net debt is the total amount a company owes after subtracting the cash and assets it has that can be used to pay off that debt. It shows how much debt is truly a burden, helping investors understand if a company is financially healthy or heavily borrowed. Think of it like calculating how much money you owe after using your savings to pay part of it.

organic net sales financial

"Organic net sales is defined as net sales excluding the recent acquisition of Kobelt"

Organic net sales represent the revenue generated from a company's core business activities, excluding the effects of acquisitions, divestments, or currency changes. It shows how well the company is growing through its existing products and services, similar to tracking how a plant grows from its own roots rather than by adding new plants. Investors use this measure to assess the true growth and health of a company's ongoing operations.

basis points financial

"Gross margin of 24.8%, expanded 70 basis points over prior year"

Basis points are a way to measure small changes in interest rates or percentages, where one basis point equals 0.01%. For example, if a loan's interest rate increases by 50 basis points, it's gone up by 0.50%. They help people understand tiny differences in rates that can add up over time, making financial comparisons clearer.

valuation allowance financial

"income tax benefit of $21.8 million related to the reversal of the domestic valuation allowance"

A valuation allowance is a reserve set aside to reduce the value of certain assets on a company's financial records when there is uncertainty about whether they will generate the expected benefits. It acts like a caution sign, indicating that some assets might not be fully recoverable or worth their recorded amount. This matters to investors because it provides a more realistic picture of a company's financial health and potential risks.

non-gaap financial

"Non-GAAP Financial Information Financial information excluding the impact of asset impairments"

Non-GAAP refers to financial measures that companies use to show their earnings or performance without including certain expenses or income that are often added back to give a different picture. It matters because it can make a company's results look better or more favorable, but it may also hide important costs, so investors need to look at both GAAP (official rules) and non-GAAP numbers to get a full understanding.

restricted stock financial

"restricted shares in lieu of his quarterly cash retainer under the company’s 2021 Omnibus Incentive Plan"

Shares granted to an individual that carry limits on transfer or sale until certain conditions are met, such as staying with the company for a set time or hitting performance targets. Think of them as a locked gift that gradually opens; for investors they matter because they affect how many shares may enter the market later, signal management incentives and potential dilution, and reveal confidence in future company performance.

AI-generated analysis. Not financial advice.

MILWAUKEE, Feb. 04, 2026 (GLOBE NEWSWIRE) -- Twin Disc, Inc. (NASDAQ: TWIN) today reported results for the second quarter ended December 26, 2025.

Fiscal Second Quarter 2026 Highlights

• Sales increased 0.3% year-over-year to $90.2 million
• Gross margin of 24.8%, expanded 70 basis points over prior year
• Net income attributable to Twin Disc was $22.4 million and EBITDA* of $4.7 million
• Robust six-month backlog of $175.3 million supported by healthy ongoing demand
• Delivered positive Operating Cash Flow of $4.6 million and Free Cash Flow* of $1.2 million during the quarter
• Continued momentum in defense, with accelerating orders and an expanding pipeline across U.S. and Europe

CEO Perspective

“Second quarter results reflected our continued focus on execution in an uneven operating environment, as tariff-related impacts affected shipment timing and near-term activity. Despite these headwinds, demand across our end markets remains strong as we delivered sequential sales growth and resilient order momentum. Orders reflected increased activity from our defense-related programs such as our Katsa product lines, along with strong interest for our hybrid propulsion systems as our leading reputation for innovation solidifies our presence in these growing markets. Our expanding presence is illustrated by our record backlog, which continues to grow and provides confidence as we move into the second half of the fiscal year,” commented John H. Batten, President and Chief Executive Officer of Twin Disc.

“While macro-related uncertainty created short-term disruption, planned shipments in the quarter were delayed rather than lost and we are well equipped to adapt to revised timelines. Overall, we are well positioned to convert our record backlog into shipments as timing normalizes, with capacity in place across our existing manufacturing footprint to support this growth. Looking ahead, we remain focused on execution and delivering continued performance improvements,” Mr. Batten concluded.

Second Quarter Results

Sales for the fiscal 2026 second quarter increased 0.3% year-over-year to $90.2 million, driven by the addition of Kobelt, along with strength of the Company’s Veth products within Marine and Propulsion Systems, in addition to recovery in the Industrial product group. On an organic basis*, which excludes the impacts of acquisitions and foreign currency exchange, fiscal second quarter 2026 sales decreased 7.9% year-over-year.

Sales by product group (certain amounts have been reclassified from Marine and Propulsion to Other):

Product Group (Thousands of $):	Q2 FY26 Sales		Q2 FY25 Sales		Change (%)
Marine and Propulsion Systems	$56,707		$56,692		0.0%
Land-Based Transmissions	17,463		19,010		-8.1%
Industrial	11,539		9,458		22.0%
Other	4,471		4,761		-6.1%
Total	$90,180		$89,921		0.3%

Twin Disc delivered year-over-year growth in the North American and European regions, resulting in a higher share of sales from those geographies, while the relative contribution from Latin America and Asia Pacific declined.

Gross profit increased 3.2% to $22.4 million compared to $21.7 million for the second quarter of fiscal 2026. Second quarter gross margin increased approximately 70 basis points to 24.8% from the prior year period, reflecting the absence of inventory-related charges recorded last year, partially offset by unfavorable product mix in the current quarter.

Marketing, engineering and administrative (ME&A) expense increased by $1.7 million, or 9.2%, to $20.7 million, compared to $18.9 million in the prior year quarter. The increased ME&A expense was primarily driven by the addition of Kobelt, along with an increase in commission expense and an inflationary impact on wages and benefits.

Net income attributable to Twin Disc for the second quarter of fiscal 2026 was $22.4 million, or $1.55 per diluted share, compared to net income attributable to Twin Disc of $919 thousand, or $0.07 per diluted share for the second fiscal quarter of 2025. The year-over-year change was driven by an income tax benefit of $21.8 million related to the reversal of the domestic valuation allowance. Earnings before interest, taxes, depreciation, and amortization (EBITDA) were $4.7 million in the second quarter, down 25.0% compared to the second quarter of fiscal 2025 due to higher ME&A expenses as a percentage of revenue.

Certain items impacting EBITDA for the second quarter 2026 include:

(Thousands of $):		Q2 FY26			Q2 FY25
Non-cash strategic inventory write down		$  -		$1,579
Restructuring		-			54
Non-cash stock based compensation		850			833
Acquisition costs		-			404
Currency translation (gain)/loss		(109)			(547)
Non-cash defined benefit pension amortization		690			231

On a consolidated basis, the backlog of orders to be shipped over the next six months is approximately $175.3 million, compared to $163.3 million at the end of the first quarter. As a percentage of six-month backlog, inventory decreased from 96.9% at the end of the first quarter, to 93.1% at the end of the second quarter. Compared to the second fiscal quarter of 2025, cash decreased 6.4% to $14.9 million, total debt increased 79.0% to $44.5 million, and net debt* increased $20.7 million to $29.6 million. The increase was primarily attributable to higher long-term debt related to the Kobelt acquisition.

CFO Perspective

Jeffrey S. Knutson, Vice President of Finance, Chief Financial Officer, Treasurer and Secretary stated, “Margins were pressured in the quarter by tariff-related impacts that affected mix due in part to delayed shipments, as well as incremental costs associated with an isolated warranty replacement. Shipment delays also led to elevated inventory levels during the quarter; however, inventory as a percentage of backlog remains at typical levels given record activity. Despite industry-wide headwinds, we generated positive free cash flow in the quarter, reflecting improved operating performance and continued discipline around capital spending. While some pressures weighed on near-term results, they do not change our expectations of the business’s earnings potential. Looking ahead, we remain focused on capitalizing on our robust backlog as we continue our progress toward our long term profitability and cash objectives.”

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 February 4, 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 February 4, 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:
Riveron
TwinDiscIR@Riveron.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 Two Quarters Ended
					December 26, 2025			December 27, 2024			December 26, 2025			December 27, 2024
Net sales				$	90,180		$	89,921		$	170,176		$	162,818
Cost of goods sold					67,813			66,662			124,875			120,237
Cost of goods sold - other					-			1,579			-			1,579
Gross profit					22,367			21,680			45,301			41,002
Marketing, engineering and administrative expenses					20,654			18,920			41,352			38,407
Other operating income					(374)			-			(374)			-
Income (loss) from operations					2,087			2,760			4,323			2,595
Other income (expense):
Interest expense					(772)			(495)			(1,572)			(1,131)
Other income (expense), net					(617)			386			(1,482)			(958)
					(1,389)			(109)			(3,054)			(2,089)
Income (loss) before income taxes and noncontrolling interest					698			2,651			1,269			506
Income tax benefit (expense)					21,780			(1,552)			20,797			(2,179)
Net income (loss)					22,478			1,099			22,066			(1,673)
Less: Net income (loss) attributable to noncontrolling interest, net of tax					107			180			213			173
Net income (loss) attributable to Twin Disc, Incorporated				$	22,371		$	919		$	21,853		$	(1,846)
Dividends per share				$	0.04		$	0.04		$	0.08		$	0.08
Earnings (loss) per share data:
Basic earnings (loss) per share attributable to Twin Disc, Incorporated common shareholders				$	1.58		$	0.07		$	1.56		$	(0.13)
Diluted earnings (loss) per share attributable to Twin Disc, Incorporated common shareholders				$	1.55		$	0.07		$	1.53		$	(0.13)
Weighted average shares outstanding data:
Basic shares outstanding					14,165			13,868			14,051			13,818
Diluted shares outstanding					14,389			14,058			14,275			13,818
Comprehensive income (loss)
Net income (loss)				$	22,478		$	1,099		$	22,066		$	(1,673)
Benefit plan adjustments, net of income taxes of $1, $13, $0, and $2, respectively					640			(1,668)			1,272			(1,447)
Foreign currency translation adjustment					1,029			(11,369)			(1,402)			(4,078)
Unrealized gain (loss) on hedges, net of income taxes of $31, $0, $7 and $0, respectively					(131)			1,146			(33)			293
Comprehensive income (loss)					24,016			(10,792)			21,903			(6,905)
Less: Comprehensive income (loss) attributable to noncontrolling interest					80			122			271			258
Comprehensive income (loss) attributable to Twin Disc, Incorporated				$	23,936		$	(10,914)		$	21,632		$	(7,163)

RECONCILIATION OF CONSOLIDATED NET INCOME (LOSS) TO EBITDA
(In thousands; unaudited)
	For the Quarter Ended								For the Two Quarters Ended
	December 26, 2025				December 27, 2024				December 26, 2025				December 27, 2024
Net income (loss) attributable to Twin Disc, Incorporated	$	22,371			$	919			$	21,853			$	(1,846	)
Interest expense		772				495				1,572				1,131
Income tax expense		(21,780	)			1,552				(20,797	)			2,179
Depreciation and amortization		3,336				3,296				6,801				6,534
Earnings before interest, taxes, depreciation and amortization (EBITDA)	$	4,699			$	6,262			$	9,429			$	7,998

	RECONCILIATION OF TOTAL DEBT TO NET DEBT
	(In thousands; unaudited)
		December 26, 2025			December 27, 2024
	Current maturities of long-term debt	$	3,000		$	2,000
	Long-term debt		41,515			22,873
	Total debt		44,515			24,873
	Less cash		14,889			15,906
	Net debt	$	29,626		$	8,967

RECONCILIATION OF NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES TO FREE CASH FLOW
(In thousands; unaudited)
	For the Quarter Ended
	December 26, 2025				December 27, 2024
Net cash provided (used) by operating activities	$	4,555			$	8,658
Acquisition of property, plant, and equipment		(3,320	)			(2,780	)
Free cash flow	$	1,235			$	5,878

RECONCILIATION OF REPORTED NET SALES TO ORGANIC NET SALES
(In thousands; unaudited)
	For the Quarter Ended
	December 26, 2025				December 27, 2024
Net Sales	$	90,180			$	89,921
Less: Acquisition		(3,191	)			-
Less: Foreign Currency Impact		(4,149	)			-
Organic Net Sales	$	82,840			$	89,921

CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands; except share amounts, unaudited)
		December 26, 2025		June 30, 2025
ASSETS
Current assets:
Cash	$	14,889	$	16,109
Trade accounts receivable, net		53,621		58,941
Inventories, net		163,177		151,951
Assets held for sale		-		-
Other current assets		20,190		19,914
Total current assets		251,877		246,915
Property, plant and equipment, net		71,405		69,576
Right-of-use assets operating lease assets		15,879		17,250
Goodwill		2,878		2,892
Intangible assets, net		12,192		13,361
Deferred income taxes		27,551		2,812
Other noncurrent assets		2,233		2,756
Total assets	$	384,015	$	355,562
LIABILITIES AND EQUITY
Current liabilities:
Current maturities of long-term debt	$	3,000	$	3,000
Current maturities of right-of-use operating lease obligations		3,446		3,393
Accounts payable		36,659		38,745
Accrued liabilities		75,430		80,655
Total current liabilities		118,535		125,793
Long-term debt		41,515		28,446
Right-of-use lease obligations		12,922		14,357
Accrued retirement benefits		11,651		11,832
Deferred income taxes		5,632		4,320
Other long-term liabilities		8,581		6,423
Total liabilities		198,836		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		38,139		42,269
Retained earnings		146,130		125,414
Accumulated other comprehensive income (loss)		3,509		3,730
		187,778		171,413
Less treasury stock, at cost (211,144 and 482,181 shares, respectively)		3,250		7,402
Total Twin Disc, Incorporated shareholders' equity		184,528		164,011
Noncontrolling interest		651		380
Total equity		185,179		164,391
Total liabilities and equity	$	384,015	$	355,562

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands; unaudited)
	For the Two Quarters Ended
		December 26, 2025				December 27, 2024
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	22,066			$	(1,673	)
Adjustments to reconcile net income (loss) to net cash provided (used) by operating activities:
Depreciation and amortization		6,801				6,534
Gain on sale of assets		-				(39	)
Loss on write-down of industrial product inventory		-				1,579
Provision for deferred income taxes		(20,700	)			(363	)
Stock compensation expense and other non-cash changes, net		1,778				1,625
Net change in operating assets and liabilities		(12,914	)			(3,348	)
Net cash provided (used) by operating activities		(2,969	)			4,315
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property, plant, and equipment		(6,750	)			(5,142	)
Proceeds from sale of property, plant, and equipment		-				39
Other, net		(67	)			(76	)
Net cash provided (used) by investing activities		(6,817	)			(5,179	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under revolving loan arrangements		66,495				54,824
Repayments of revolving loan arrangements		(52,648	)			(54,824	)
Repayments of other long-term debt		(750	)			(500	)
Dividends paid to shareholders		(1,137	)			(1,136	)
Payments of finance lease obligations		(581	)			(1,017	)
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		9,693				(3,909	)
Effect of exchange rate changes on cash		(1,127	)			609
Net change in cash		(1,220	)			(4,164	)
Cash:
Beginning of period		16,109				20,070
End of period	$	14,889			$	15,906

FAQ

What were Twin Disc (TWIN) fiscal Q2 2026 sales and net income on February 4, 2026?

Twin Disc reported Q2 sales of $90.2 million and net income of $22.4 million. According to the company, the net income was substantially affected by a $21.8 million income tax benefit tied to a valuation allowance reversal.

Why did Twin Disc (TWIN) report a large net income gain in Q2 2026?

The primary driver was a $21.8 million income tax benefit reversing a domestic valuation allowance. According to the company, this non-recurring tax item materially increased reported net income versus the prior-year quarter.

How did the Kobelt acquisition affect Twin Disc (TWIN) in Q2 2026?

Kobelt contributed to revenue and higher operating expenses in the quarter. According to the company, acquisition-related integration increased ME&A expense and was a main factor in higher total debt levels.

What does Twin Disc's $175.3M backlog mean for TWIN shareholders?

A record six-month backlog suggests revenue visibility and potential future shipments. According to the company, the backlog reflects strong defense and hybrid propulsion demand but shipment timing was affected by tariffs and delays.