v3.26.1
Note F - Business Segments
 9 Months Ended
Mar. 27, 2026
Notes to Financial Statements  
Segment Reporting [Text Block]

F.

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, energy and natural resources, government, and industrial markets.

 

The Company has two reportable segments: manufacturing and distribution.  Its segment structure reflects the way the chief operating decision-maker (“CODM”) makes operating decisions and manages the growth and profitability of the business. It also corresponds with the CODM’s approach of allocating resources and assessing the financial performance of its segments. The Company’s CODM is the Chief Executive Officer, who reviews financial information presented on a consolidated basis. 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.  The CODM evaluates the performance of its segments based on net sales, gross profit, operating income (loss), and net income (loss).

 

The following table presents the selected financial information with respect to the Company’s reportable segments as of the quarter ended March 27, 2026:

 

  

Manufacturing

  

Distribution

  

Corporate

  

Elimination and

adjustments

  

Consolidated

 

Net sales:

                    

Net sales

 $83,528  $32,644  $-  $(19,478) $96,694 

Intra-segment sales

  (2,015)  (4,982)  -   6,997   - 

Inter-segment sales

  (11,441)  (1,040)  -   12,481   - 

Total consolidated net sales

  70,072   26,622   -   -   96,694 
                     

Cost of goods sold:

                    

Cost of goods sold

  64,623   24,238   -   19,298   69,563 

Intra-segment cost of goods sold

  (2,015)  (4,982)  -   (6,997)  - 

Inter-segment cost of goods sold

  (11,441)  (1,040)  -   (12,481)  - 

Total consoldiated cost of goods sold

  51,167   18,216   -   (180)  69,563 
                     

Gross profit

  18,905   8,406   -   (180)  27,131 
                     

Marketing, engineering and administrative expenses

  11,317   3,619   6,319   -   21,255 

Other operating income

  54   -   -   -   54 

Operating income (loss)

  7,534   4,787   (6,319)  (180)  5,822 
                     

Other income (expense):

                    

Interest income

  389   133   488   (1,013)  (3)

Interest expense

  (1,784)  (2)  (17)  1,013   (790)

Other income (expense)

  (2,101)  (1,094)  3,587   (26)  366 

Total consolidated other income (expense)

  (3,496)  (963)  4,058   (26)  (427)
                     

Pretax earnings (loss)

  4,038   3,824   (2,261)  (206)  5,395 
                     

Income tax benefit (expense)

  (164)  (946)  (3,136)  2,407   (1,839)

Net income (loss)

  3,874   2,878   (5,397)  2,201   3,556 
                     

Minority interest

  -   231   -   -   231 

Net income (loss) attributable to Twin Disc, Incorporated

 $3,874  $2,647  $(5,397) $2,201  $3,325 
                     
                     
                     
                     

Depreciation and amortization

 $2,896  $102  $427  $-  $3,425 

Expenditures for segment assets

  2,116   488   2,566   -   5,170 

 

The following table presents the selected financial information with respect to the Company’s reportable segments as of the quarter ended March 28, 2025:

 

  

Manufacturing

  

Distribution

  

Corporate

  

Elimination and

adjustments

  

Consolidated

 

Net sales:

                    

Net sales

 $72,484  $30,138  $-  $(21,380) $81,242 

Intra-segment sales

  (1,970)  (5,200)  -   7,170   - 

Inter-segment sales

  (13,246)  (964)  -   14,210   - 

Total consolidated net sales

  57,268   23,974   -   -   81,242 
                     

Cost of goods sold:

                    

Cost of goods sold

  57,283   23,768   -  $21,515   59,536 

Intra-segment cost of goods sold

  (1,970)  (5,200)  -   (7,170)  - 

Inter-segment cost of goods sold

  (13,246)  (964)  -   (14,210)  - 

Total consolidated cost of goods sold

  42,067   17,604   -   135   59,536 
                     

Gross profit

  15,201   6,370   -   135   21,706 
                     

Marketing, engineering and administrative expenses

  9,863   3,456   6,440   -   19,759 

Operating income (loss)

  5,338   2,914   (6,440)  135   1,947 
                     

Other income (expense):

                    

Interest income

  255   141   390   (775)  11 

Interest expense

  (1,422)  (2)  (11)  775   (660)

Other income (expense)

  (2,189)  (285)  918   (22)  (1,578)

Total consolidated other income (expense)

  (3,356)  (146)  1,297   (22)  (2,227)
                     

Pretax earnings (loss)

  1,982   2,768   (5,143)  113   (280)
                     

Income tax benefit (expense)

  (705)  (685)  -   248   (1,142)

Net income (loss)

  1,277   2,083   (5,143)  361   (1,422)
                     

Minority interest

  -   50   -   -   50 

Net income (loss) attributable to Twin Disc, Incorporated

 $1,277  $2,033  $(5,143) $361  $(1,472)
                     
                     
                     
                     

Depreciation and amortization

 $3,256  $83  $320  $-  $3,659 

Expenditures for segment assets

  1,600   209   500   -   2,309 

 

The following table presents the selected financial information with respect to the Company’s reportable segments as of the three quarters ended March 27, 2026:

 

  

Manufacturing

  

Distribution

  

Corporate

  

Elimination and adjustments

  

Consolidated

 

Net sales:

                    

Net sales

 $239,670  $79,781  $-  $(52,581) $266,870 

Intra-segment sales

  (6,285)  (12,277)  -   18,562   - 

Inter-segment sales

  (31,375)  (2,644)  -   34,019   - 

Total consolidated net sales

  202,010   64,860   -   -   266,870 
                     

Cost of goods sold:

                    

Cost of goods sold

  185,390   62,367   -   53,319   194,438 

Intra-segment cost of goods sold

  (6,285)  (12,277)  -   (18,562)  - 

Inter-segment cost of goods sold

  (31,375)  (2,644)  -   (34,019)  - 

Total consolidated cost of goods sold

  147,730   47,446   -   738   194,438 
                     

Gross profit

  54,280   17,414   -   738   72,432 
                     

Marketing, engineering and administrative expenses

  32,989   11,031   18,587   -   62,607 

Other operating income

  54   -   (374)  -   (320)

Operating income (loss)

  21,237   6,383   (18,213)  738   10,145 
                     

Other income (expense):

                    

Interest income

  1,156   399   1,458   (2,991)  22 

Interest expense

  (5,277)  (7)  (70)  2,991   (2,363)

Other income (expense)

  (9,210)  (3,353)  11,499   (76)  (1,140)

Total consolidated other income (expense)

  (13,331)  (2,961)  12,887   (76)  (3,481)
                     

Pretax earnings (loss)

  7,906   3,422   (5,326)  662   6,664 
                     

Income tax benefit (expense)

  (12,394)  (1,551)  33,496   (593)  18,958 

Net income (loss)

  (4,488)  1,871   28,170   69   25,622 
                     

Minority interest

  -   444   -   -   444 

Net income (loss) attributable to Twin Disc, Incorporated

 $(4,488) $1,427  $28,170  $69  $25,178 
                     
                     

Total consolidated assets

 $506,291  $66,209  $(173,776) $(7,705) $391,019 
                     

Depreciation and amortization

 $8,908  $292  $1,025  $-  $10,225 

Expenditures for segment assets

  7,784   682   1,840   -   10,306 

 

The following table presents the selected financial information with respect to the Company’s reportable segments as of the three quarters ended March 28, 2025:

 

  

Manufacturing

  

Distribution

  

Corporate

  

Elimination and adjustments

  

Consolidated

 

Net sales:

                    

Net sales

 $212,265  $95,448  $-  $(63,653) $244,060 

Intra-segment sales

  (5,172)  (16,164)  -   21,336   - 

Inter-segment sales

  (39,102)  (3,215)  -   42,317   - 

Total consolidated net sales

  167,991   76,069   -   -   244,060 
                     

Cost of goods sold:

                    

Cost of goods sold

  170,550   74,756   -  $63,954   181,352 

Intra-segment cost of goods sold

  (5,171)  (16,164)  -   (21,335)  - 

Inter-segment cost of goods sold

  (39,102)  (3,215)  -   (42,317)  - 

Total consolidated cost of goods sold

  126,277   55,377   -   302   181,352 
                     

Gross profit

  41,714   20,692   -   302   62,708 
                     

Marketing, engineering and administrative expenses

  28,372   11,118   18,676   -   58,166 

Operating income (loss)

  13,342   9,574   (18,676)  302   4,542 
                     

Other income (expense):

                    

Interest income

  676   410   1,182   (2,198)  70 

Interest expense

  (2,932)  (988)  (69)  2,198   (1,791)

Other income (expense)

  (2,554)  (2,802)  2,831   (70)  (2,595)

Total consolidated other income (expense)

  (4,810)  (3,380)  3,944   (70)  (4,316)
                     

Pretax earnings (loss)

  8,532   6,194   (14,732)  232   226 
                     

Income tax benefit (expense)

  (1,959)  (2,054)  227   466   (3,320)

Net income (loss)

  6,573   4,140   (14,505)  698   (3,094)
                     

Minority interest

  -   223   -   -   223 

Net income (loss) attributable to Twin Disc, Incorporated

 $6,573  $3,917  $(14,505) $698  $(3,317)
                     
                     

Total consolidated assets

 $495,226  $40,854  $(195,317) $(7,881) $332,882 
                     

Depreciation and amortization

 $9,000  $265  $929  $-  $10,194 

Expenditures for segment assets

  5,659   800   993   -   7,452 

 

 

Disaggregated revenue:

 

The following table presents details deemed most relevant to the users of the financial statements for the quarters ended March 27, 2026 and March 28, 2025.

 

Net sales by product group for the quarter ended March 27, 2026 is summarized as follows:

 

          

Elimination of

     
  

Manufacturing

  

Distribution

  

Intercompany Sales

  

Total

 

Industrial

 $11,355  $856  $(996) $11,215 

Land-based transmissions

  20,027   4,337   (2,649)  21,715 

Marine and propulsion systems

  52,146   22,489   (15,488)  59,147 

Other

  -   4,962   (345)  4,617 

Total

 $83,528  $32,644  $(19,478) $96,694 

 

Net sales by product group for the quarter ended March 28, 2025 is summarized as follows:

 

          

Elimination of

     
  

Manufacturing

  

Distribution

  

Intercompany Sales

  

Total

 

Industrial

 $9,679  $1,400  $(1,345) $9,734 

Land-based transmissions

  17,220   3,878   (3,322)  17,776 

Marine and propulsion systems

  45,536   20,176   (16,414)  49,298 

Other

  49   4,684   (299)  4,434 

Total

 $72,484  $30,138  $(21,380) $81,242 

 

 

Net sales by product group for the three quarters ended March 27, 2026 is summarized as follows:

 

          

Elimination of

     
  

Manufacturing

  

Distribution

  

Intercompany Sales

  

Total

 

Industrial

 $33,313  $2,951  $(3,131) $33,133 

Land-based transmissions

  55,618   9,705   (8,586)  56,737 

Marine and propulsion systems

  150,739   52,845   (39,505)  164,079 

Other

  -   14,280   (1,359)  12,921 

Total

 $239,670  $79,781  $(52,581) $266,870 

 

 

Net sales by product group for the three quarters ended March 28, 2025 is summarized as follows:

 

          

Elimination of

     
  

Manufacturing

  

Distribution

  

Intercompany Sales

  

Total

 

Industrial

 $27,810  $3,506  $(2,951) $28,365 

Land-based transmissions

  53,967   9,541   (9,438)  54,070 

Marine and propulsion systems

  130,443   69,485   (50,503)  149,425 

Other

  45   12,916   (761)  12,200 

Total

 $212,265  $95,448  $(63,653) $244,060 

 

 

Industrial products include clutches, power take-offs and pump drives sold to the agriculture, recycling, construction and oil and gas markets. The land-based transmission products include applications for oil field and natural gas, military and airport rescue and firefighting. The marine and propulsion systems include marine transmission, azimuth drives, controls, surface drives, and propellers for the global commercial marine, pleasure craft and patrol boat markets. Other products include non-Twin Disc manufactured product sold through Company-owned distribution entities.