Twin Disc Announces Third Quarter Results
Rhea-AI Summary
Twin Disc (NASDAQ: TWIN) reported fiscal Q3 results for the quarter ended March 27, 2026: sales $96.7M (+19.0% YoY), gross margin 28.1% (+134 bps), net income $3.3M and EBITDA $9.4M. Six-month backlog totaled $179.5M. Organic sales rose 7.0% excluding acquisitions and FX. Free cash flow for the quarter was $1.8M. The company cited defense demand and the Kobelt acquisition as drivers and noted a rise in long-term debt tied to that acquisition.
Positive
- Sales +19.0% YoY to $96.7M
- Gross margin expanded 134 basis points to 28.1%
- EBITDA $9.4M (up 135.1% YoY)
- Six-month backlog of $179.5M
- Free cash flow of $1.8M for the quarter
Negative
- Total debt increased 10.5% to $45.1M
- Net debt rose $4.4M to $29.0M, driven by Kobelt acquisition
- Cash decreased 0.8% to $16.1M compared to prior year
Key Figures
Market Reality Check
Peers on Argus
TWIN gained 5.39% with sector peers showing smaller single‑day moves: BW +0.39%, TAYD +4.34%, NPWR +1.49%, ZJK +2.05%, HURC +2.29%. Momentum scanner only flagged SHMD at +6.24%, so today’s move in TWIN appears more company‑specific than part of a broad sector rotation.
Previous Earnings Reports
| Date | Event | Sentiment | Move | Catalyst |
|---|---|---|---|---|
| Feb 04 | Q2 2026 earnings | Positive | -15.0% | Q2 2026 results with $90.2M sales, 24.8% gross margin, $22.4M net income. |
| Nov 05 | Q1 2026 earnings | Positive | -1.4% | Q1 2026 sales $80.0M, margin expansion, backlog $163.3M, modest net loss. |
| May 07 | Q3 2025 earnings | Negative | +6.2% | Q3 2025 sales up 9.5% but EBITDA down and net loss reported. |
| Feb 05 | Q2 2025 earnings | Positive | -2.8% | Q2 2025 strong 23.2% sales growth and higher EBITDA despite margin pressure. |
| Nov 06 | Q1 2025 earnings | Neutral | +1.8% | Q1 2025 revenue growth to $72.9M with net loss and higher backlog. |
Recent earnings releases often saw weak or negative price reactions, even when sales and backlog trends were constructive. Four of the last five earnings events showed negative next‑day moves despite generally improving operations and growing backlog.
Over the past five earnings cycles, Twin Disc has reported steady sales growth and a consistently strong six‑month backlog, supported by marine and defense demand. Q1 FY2026 delivered $80.0M in sales and improved margins but still a small net loss. Q2 FY2026 sales reached $90.2M with a large one‑time tax benefit driving net income of $22.4M and backlog of $175.3M. Earlier FY2025 quarters showed acquisition‑driven growth, rising debt, and mixed profitability. Today’s Q3 FY2026 report continues the pattern of backlog strength and margin focus.
Historical Comparison
In the past five earnings releases, TWIN’s average move was -2.25%. Today’s +5.39% reaction to Q3 FY2026 results stands out as stronger than the typical post‑earnings pattern.
Across recent earnings, Twin Disc has shown rising sales, sustained six‑month backlog strength, and increased use of acquisitions, while working to improve margins and manage higher debt levels.
Market Pulse Summary
This announcement highlighted solid Q3 FY2026 execution: net sales rose to $96.7M, gross margin reached 28.1%, EBITDA was $9.4M, and free cash flow turned positive at $1.8M. A six‑month backlog of $179.5M underscored sustained demand, particularly in marine and defense. Historically, earnings updates also emphasized backlog strength and acquisition contributions alongside rising debt. Investors may watch future quarters for margin stability, cash generation, and balance‑sheet trends relative to this quarter’s performance.
Key Terms
ebitda financial
free cash flow financial
gross margin financial
basis points financial
organic net sales financial
net debt financial
foreign currency translation financial
non-gaap financial
AI-generated analysis. Not financial advice.
MILWAUKEE, May 06, 2026 (GLOBE NEWSWIRE) -- Twin Disc, Inc. (NASDAQ: TWIN) today reported results for the third quarter ended March 27, 2026.
Fiscal Third Quarter 2026 Highlights
- Sales increased
19.0% year-over-year to$96.7 million - Gross margin of
28.1% , expanded 134 basis points over prior year - Net income attributable to Twin Disc was
$3.3 million and EBITDA* of$9.4 million - Delivered positive Operating Cash Flow of
$5.3 million and Free Cash Flow* of$1.8 million during the quarter - Robust six-month backlog of
$179.5 million supported by healthy ongoing demand - Continued momentum in defense, supporting Finland facility expansion to deliver long-term growth
CEO Perspective
“Our third quarter results marked the beginning of the strong second-half performance we anticipated. We delivered meaningful sales growth, margin expansion and improved free cash flow generation, driven by solid execution and healthy demand across our end markets. Marine and propulsion systems remained a key driver of both top- and bottom-line expansion, supported by continued demand for our Veth products,” commented John H. Batten, President and Chief Executive Officer of Twin Disc.
“Looking ahead, strong demand continues to support healthy order momentum and a growing, record backlog, including increased activity from our defense-related programs. At the same time, we remain focused on advancing internal initiatives that optimize our manufacturing footprint and support future growth, including relocating production to mitigate tariff exposure and adding capacity to support our expanding defense business. Together with improving profitability, these actions position Twin Disc well to capitalize efficiently on robust end market demand and drive long-term growth,” Mr. Batten concluded.
Third Quarter Results
Sales for the fiscal 2026 third quarter increased
Sales by product group (certain amounts have been reclassified from Marine and Propulsion to Other):
| Product Group (Thousands of $): | Q3 FY26 Sales | Q3 FY25 Sales | Change (%) |
| Marine and Propulsion Systems | |||
| Land-Based Transmissions | 21,715 | 17,776 | |
| Industrial | 11,215 | 9,734 | |
| Other | 4,618 | 4,435 | |
| Total |
Twin Disc delivered double-digit growth year-over-year in the North American region which drove a shift in the distribution of sales across geographical regions. A greater proportion of sales came from the North American region, with a lower proportion of sales coming from the Middle East and Asia Pacific.
Gross profit increased
Marketing, engineering and administrative (ME&A) expense increased by
Net income attributable to Twin Disc for the third quarter of fiscal 2026 was
Certain items impacting EBITDA for the third quarter 2026 include:
| (Thousands of $): | Q3 FY26 | Q3 FY25 | |||
| Restructuring | $ | 309 | $ | 287 | |
| Non-cash stock based compensation | 748 | 1,004 | |||
| Acquisition costs | - | 396 | |||
| Currency translation (gain)/loss | (1,036 | ) | 1,301 | ||
| 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
CFO Perspective
Jeffrey S. Knutson, Vice President of Finance, Chief Financial Officer, Treasurer and Secretary stated, “Our third quarter results reflected strong year-over-year sales growth, improved profitability and higher free cash flow generation. Margin performance benefited from incremental volumes and stronger operating execution, while free cash flow generation improved significantly from the prior-year period due to effective inventory management and enhanced profitability. Moving forward, we remain focused on disciplined execution across the business, efficient backlog conversion and continued working capital improvements as we progress closer toward our long-term targets.”
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 May 6, 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 May 7, 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 Three Quarters Ended | |||||||||||
| March 27, 2026 | March 28, 2025 | March 27, 2026 | March 28, 2025 | |||||||||
| Net sales | $ | 96,694 | $ | 81,242 | $ | 266,870 | $ | 244,060 | ||||
| Cost of goods sold | 69,563 | 59,536 | 194,438 | 179,773 | ||||||||
| Cost of goods sold - other | - | - | - | 1,579 | ||||||||
| Gross profit | 27,131 | 21,706 | 72,432 | 62,708 | ||||||||
| Marketing, engineering and administrative expenses | 21,255 | 19,759 | 62,607 | 58,166 | ||||||||
| Other operating income | 54 | - | (320 | ) | - | |||||||
| Income (loss) from operations | 5,822 | 1,947 | 10,145 | 4,542 | ||||||||
| Other income (expense): | ||||||||||||
| Interest expense | (790 | ) | (660 | ) | (2,363 | ) | (1,791 | ) | ||||
| Other income (expense), net | 363 | (1,567 | ) | (1,118 | ) | (2,525 | ) | |||||
| (427 | ) | (2,227 | ) | (3,481 | ) | (4,316 | ) | |||||
| Income (loss) before income taxes and noncontrolling interest | 5,395 | (280 | ) | 6,664 | 226 | |||||||
| Income tax benefit (expense) | (1,839 | ) | (1,142 | ) | 18,958 | (3,320 | ) | |||||
| Net income (loss) | 3,556 | (1,422 | ) | 25,622 | (3,094 | ) | ||||||
| Less: Net income (loss) attributable to noncontrolling interest, net of tax | 231 | 50 | 444 | 223 | ||||||||
| Net income (loss) attributable to Twin Disc, Incorporated | $ | 3,325 | $ | (1,472 | ) | $ | 25,178 | $ | (3,317 | ) | ||
| Dividends per share | $ | 0.04 | $ | 0.04 | $ | 0.12 | $ | 0.12 | ||||
| Earnings (loss) per share data: | ||||||||||||
| Basic earnings (loss) per share attributable to Twin Disc, Incorporated common shareholders | $ | 0.23 | $ | (0.11 | ) | $ | 1.79 | $ | (0.24 | ) | ||
| Diluted earnings (loss) per share attributable to Twin Disc, Incorporated common shareholders | $ | 0.23 | $ | (0.11 | ) | $ | 1.76 | $ | (0.24 | ) | ||
| Weighted average shares outstanding data: | ||||||||||||
| Basic shares outstanding | 14,198 | 13,895 | 14,095 | 13,841 | ||||||||
| Diluted shares outstanding | 14,416 | 13,895 | 14,313 | 13,841 | ||||||||
| Comprehensive income (loss) | ||||||||||||
| Net income (loss) | $ | 3,556 | $ | (1,422 | ) | $ | 25,622 | $ | (3,094 | ) | ||
| Benefit plan adjustments, net of income taxes of | 477 | 201 | 1,749 | (1,246 | ) | |||||||
| Foreign currency translation adjustment | (3,160 | ) | 4,152 | (4,562 | ) | 74 | ||||||
| Unrealized gain (loss) on hedges, net of income taxes of ( | 294 | (653 | ) | 261 | (360 | ) | ||||||
| Comprehensive income (loss) | 1,167 | 2,278 | 23,070 | (4,626 | ) | |||||||
| Less: Comprehensive income (loss) attributable to noncontrolling interest | 211 | 82 | 482 | 340 | ||||||||
| Comprehensive income (loss) attributable to Twin Disc, Incorporated | $ | 956 | $ | 2,196 | $ | 22,588 | $ | (4,966 | ) | |||
| RECONCILIATION OF CONSOLIDATED NET INCOME TO EBITDA | ||||||||||||||
| (In thousands; unaudited) | ||||||||||||||
| For the Quarter Ended | For the Three Quarters Ended | |||||||||||||
| March 27, 2026 | March 28, 2025 | March 27, 2026 | March 28, 2025 | |||||||||||
| Net income (loss) attributable to Twin Disc, Incorporated | $ | 3,325 | $ | (1,472 | ) | $ | 25,178 | $ | (3,317 | ) | ||||
| Interest expense | 790 | 660 | 2,363 | 1,791 | ||||||||||
| Income tax expense | 1,839 | 1,142 | (18,958 | ) | 3,320 | |||||||||
| Depreciation and amortization | 3,425 | 3,659 | 10,225 | 10,194 | ||||||||||
| Earnings before interest, taxes, depreciation and amortization (EBITDA) | $ | 9,379 | $ | 3,989 | $ | 18,808 | $ | 11,988 | ||||||
| RECONCILIATION OF TOTAL DEBT TO NET DEBT | ||||||
| (In thousands; unaudited) | ||||||
| March 27, 2026 | March 28, 2025 | |||||
| Current maturities of long-term debt | $ | 3,000 | $ | 2,000 | ||
| Long-term debt | 42,068 | 38,774 | ||||
| Total debt | 45,068 | 40,774 | ||||
| Less cash | 16,114 | 16,245 | ||||
| Net debt | $ | 28,954 | $ | 24,529 | ||
| RECONCILIATION OF REPORTED NET SALES TO ORGANIC NET SALES | |||||
| (In thousands; unaudited) | |||||
| For the Quarter Ended | |||||
| March 27, 2026 | March 28, 2025 | ||||
| Net Sales | $ | 96,694 | $ | 81,242 | |
| Less: Acquisition | 2,248 | - | |||
| Less: Foreign Currency Impact | 7,518 | - | |||
| Organic Net Sales | $ | 86,928 | $ | 81,242 | |
| RECONCILIATION OF NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES TO FREE CASH FLOW | |||||||
| (In thousands; unaudited) | |||||||
| For the Quarter Ended | |||||||
| March 27, 2026 | March 28, 2025 | ||||||
| Net cash provided (used) by operating activities | $ | 5,307 | $ | 3,216 | |||
| Acquisition of property, plant, and equipment | (3,556 | ) | (2,310 | ) | |||
| Free cash flow | $ | 1,751 | $ | 906 | |||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||
| (In thousands; except share amounts, unaudited) | ||||
| March 27, 2026 | June 30, 2025 | |||
| ASSETS | ||||
| Current assets: | ||||
| Cash | $ | 16,114 | $ | 16,109 |
| Trade accounts receivable, net | 64,079 | 58,941 | ||
| Inventories, net | 160,331 | 151,951 | ||
| Other current assets | 19,900 | 19,914 | ||
| Total current assets | 260,424 | 246,915 | ||
| Property, plant and equipment, net | 70,015 | 69,576 | ||
| Right-of-use assets operating lease assets | 15,613 | 17,250 | ||
| Goodwill | 2,833 | 2,892 | ||
| Intangible assets, net | 12,657 | 13,361 | ||
| Deferred income taxes | 27,248 | 2,812 | ||
| Other noncurrent assets | 2,229 | 2,756 | ||
| Total assets | $ | 391,019 | $ | 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 | 3,661 | 3,393 | ||
| Accounts payable | 36,534 | 38,745 | ||
| Accrued liabilities | 81,132 | 80,655 | ||
| Total current liabilities | 124,327 | 125,793 | ||
| Long-term debt | 42,068 | 28,446 | ||
| Right-of-use lease obligations | 12,442 | 14,357 | ||
| Accrued retirement benefits | 11,602 | 11,832 | ||
| Deferred income taxes | 5,427 | 4,320 | ||
| Other long-term liabilities | 8,627 | 6,423 | ||
| Total liabilities | 204,493 | 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 | 38,886 | 42,269 | ||
| Retained earnings | 148,875 | 125,414 | ||
| Accumulated other comprehensive income (loss) | 1,140 | 3,730 | ||
| 188,901 | 171,413 | |||
| Less treasury stock, at cost (209,975 and 482,181 shares, respectively) | 3,237 | 7,402 | ||
| Total Twin Disc, Incorporated shareholders' equity | 185,664 | 164,011 | ||
| Noncontrolling interest | 862 | 380 | ||
| Total equity | 186,526 | 164,391 | ||
| Total liabilities and equity | $ | 391,019 | $ | 355,562 |
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||
| (In thousands; unaudited) | |||||||
| For the Three Quarters Ended | |||||||
| March 27, 2026 | March 28, 2025 | ||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||
| Net income (loss) | $ | 25,622 | $ | (3,094 | ) | ||
| Adjustments to reconcile net income (loss) to net cash provided (used) by operating activities: | |||||||
| Depreciation and amortization | 10,225 | 10,194 | |||||
| Gain on sale of assets | (200 | ) | (72 | ) | |||
| Loss on write-down of industrial product inventory | - | 1,579 | |||||
| Provision for deferred income taxes | (23,107 | ) | (790 | ) | |||
| Stock compensation expense and other non-cash changes, net | 2,673 | 3,124 | |||||
| Net change in operating assets and liabilities | (12,876 | ) | (3,410 | ) | |||
| Net cash provided (used) by operating activities | 2,337 | 7,531 | |||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||
| Acquisition of property, plant, and equipment | (10,306 | ) | (7,452 | ) | |||
| Acquisition of Kobelt, less cash acquired | - | (16,346 | ) | ||||
| Proceeds from sale of property, plant, and equipment | 228 | 102 | |||||
| Other, net | (82 | ) | (274 | ) | |||
| Net cash provided (used) by investing activities | (10,160 | ) | (23,970 | ) | |||
| CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||
| Borrowings under long-term debt agreement | - | 6,500 | |||||
| Borrowings under revolving loan arrangements | 91,397 | 95,727 | |||||
| Repayments of revolving loan arrangements | (75,847 | ) | (86,434 | ) | |||
| Repayments of other long-term debt | (1,500 | ) | (1,000 | ) | |||
| Dividends paid to shareholders | (1,717 | ) | (1,702 | ) | |||
| Payments of finance lease obligations | (1,008 | ) | (1,646 | ) | |||
| 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 | 9,639 | 10,189 | |||||
| Effect of exchange rate changes on cash | (1,811 | ) | 2,425 | ||||
| Net change in cash | 5 | (3,825 | ) | ||||
| Cash: | |||||||
| Beginning of period | 16,109 | 20,070 | |||||
| End of period | $ | 16,114 | $ | 16,245 | |||
