v3.26.1
Note S - 2025 Impact of Accounting Method Change
 12 Months Ended
Jun. 30, 2026
Notes to Financial Statements  
Accounting Standards Update and Change in Accounting Principle [Text Block]

S. 2025 IMPACT OF ACCOUNTING METHOD CHANGE

 

The following tables summarize the effects of the accounting change described in Note B, Inventories, net, of the Company’s Consolidated Statements of Operations and Comprehensive Income (Loss), Statements of Cash Flows and Statements of Changes in Equity for the year ended June 30, 2025 and Consolidated Balance Sheets as of June 30, 2025.

 

See next page.

 

Consolidated Statement of Operations and Comprehensive Income (Loss)

 

June 30, 2025

 
  

As Computed

Under Previous

Method

  

Effect of

Accounting

Change

  

As Reported

Under New

Method

 
             

Net sales

 $340,738  $-  $340,738 

Cost of goods sold

  246,433   (1,197)  245,236 

Cost of goods sold - other

  1,579   -   1,579 

Gross profit

  92,726   1,197   93,923 
             

Marketing, engineering and administrative expenses

  82,431   -   82,431 

Restructuring expenses

  408   -   408 

Other operating income

  -   -   - 

Income (loss) from operations

  9,887   1,197   11,084 
             

Other Income (expense):

            

Interest expense

  (2,646)  -   (2,646)

Other income, net

  (5,472)  -   (5,472)
   (8,118)  -   (8,118)

Income (loss) before income taxes and noncontrolling interest

  1,769   1,197   2,966 

Income tax benefit (expense)

  3,368   -   3,368 

Net income (loss)

  (1,599)  1,197   (402)

Less: Net earnings (loss) attributable to noncontrolling interest, net of tax

  295   -   295 

Net income (loss) attributable to Twin Disc, Incorporated

 $(1,894) $1,197  $(697)
             

Dividends per share

 $0.16  $-  $0.16 
             

Earnings (loss) per share data:

            

Basic earnings (loss) per share attributable to Twin Disc, Incorporated common shareholders

 $(0.14) $0.09  $(0.05)

Diluted earnings (loss) per share attributable to Twin Disc, Incorporated common shareholders

 $(0.14) $0.09  $(0.05)
             

Weighted average shares outstanding data:

            

Basic shares outstanding

  13,856   -   13,856 

Diluted shares outstanding

  13,856   -   13,856 
             

Comprehensive income (loss)

            

Net income (loss)

 $(1,599) $1,197  $(402)

Benefit plan adjustments, net of income taxes of $13 and $8, respectively

  (3,399)  -   (3,399)

Foreign currency translation adjustment

  15,924   -   15,924 

Unrealized gain (loss) on hedges, net of income taxes of $0 and 235, respectively

  (1,851)  -   (1,851)

Comprehensive income (loss)

  9,075   1,197   10,272 

Less: Comprehensive income (loss) attributable to noncontrolling interest

  334   -   334 
             

Comprehensive income (loss) attributable to Twin Disc, Incorporated

 $8,741  $1,197  $9,938 

 

Consolidated Balance Sheet

 

June 30, 2025

 
  

As Computed

Under Previous

Method

  

Effect of

Accounting

Change

  

As Reported

Under New

Method

 

ASSETS

            

Current assets:

            

Cash

 $16,109  $-  $16,109 

Trade accounts receivable, net

  58,941   -   58,941 

Inventories, net

  151,951   32,134   184,085 

Other current assets

  19,914      19,914 

Total current assets

  246,915   32,134   279,049 
             

Property, plant and equipment, net

  69,576   -   69,576 

Right-of-use assets operating lease assets

  17,250   -   17,250 

Goodwill

  2,892   -   2,892 

Intangible assets, net

  13,361   -   13,361 

Deferred income tax assets

  2,812   -   2,812 

Other noncurrent assets

  2,756   -   2,756 

Total assets

 $355,562  $32,134  $387,696 
             

LIABILITIES AND EQUITY

            

Current liabilities:

            

Current maturities of long-term debt

 $3,000  $-  $3,000 

Current maturities of right-of-use operating lease obligations

  3,393   -   3,393 

Accounts payable

  38,745   -   38,745 

Accrued liabilities

  80,655   -   80,655 

Total current liabilities

  125,793   -   125,793 
             

Long-term debt

  28,446   -   28,446 

Right-of-use lease obligations

  14,357   -   14,357 

Accrued retirement benefits

  11,832   -   11,832 

Deferred income tax liabilities

  4,320   -   4,320 

Other long-term liabilities

  6,423   -   6,423 

Total liabilities

  191,171   -   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

  42,269   -   42,269 

Retained earnings

  125,414   32,134   157,548 

Accumulated other comprehensive income (loss)

  3,730   -   3,730 
   171,413   32,134   203,547 

Less treasury stock, at cost (482,181 and 637,778 shares, respectively)

  7,402   -   7,402 

Total Twin Disc, Incorporated shareholders' equity

  164,011   32,134   196,145 

Noncontrolling interest

  380   -   380 

Total equity

  164,391   32,134   196,525 
             

Total liabilities and equity

 $355,562  $32,134  $387,696 

 

Consolidated Statement of Cash Flows

 

June 30, 2025

 
  

As Computed

Under Previous

Method

  

Effect of

Accounting

Change

  

As Reported

Under New

Method

 
             

CASH FLOWS FROM OPERATING ACTIVITIES:

            

Net income (loss)

 $(1,599) $1,197  $(402)

Adjustments to reconcile net income (loss) to net cash provided (used) by operating activities:

            

Depreciation and amortization

  14,899   -   14,899 

Gain on sale of assets

  (98)  -   (98)

Loss on write-down of industrial product inventory

  1,579   -   1,579 

Restructuring charges

  39   -   39 

Provision for deferred income taxes

  (1,581)  -   (1,581)

Stock compensation expense

  4,107   -   4,107 

Other, net

  1,226   -   1,226 

Changes in operating assets and liabilities

          - 

Trade accounts receivable, net

  (2,032)  -   (2,032)

Inventories, net

  (9,730)  (1,197)  (10,927)

Other assets

  2,748   -   2,748 

Accounts payable

  2,414   -   2,414 

Accrued liabilities

  12,463   -   12,463 

Accrued retirement benefits

  (456)  -   (456)

Net cash provided (used) by operating activities

  23,979   -   23,979 
             

CASH FLOWS FROM INVESTING ACTIVITIES:

            

Acquisition of property, plant, and equipment

  (15,157)  -   (15,157)

Acquisition of Kobelt, less cash acquired

  (17,236)  -   (17,236)

Proceeds from sale of property, plant, and equipment

  147   -   147 

Other, net

  (653)  -   (653)

Net cash provided (used) by investing activities

  (32,899)  -   (32,899)
             

CASH FLOWS FROM FINANCING ACTIVITIES:

            

Borrowings under long-term debt agreement

  6,500   -   6,500 

Borrowings under revolving loan arrangements

  122,264   -   122,264 

Repayments of revolving loan arrangements

  (122,264)  -   (122,264)

Repayments of other long-term debt

  (2,500)  -   (2,500)

Payments of right-of-use finance lease obligations

  (1,119)  -   (1,119)

Dividends paid to shareholders

  (2,284)  -   (2,284)

Dividends paid to noncontrolling interest

  (306)  -   (306)

Payments of withholding taxes on stock compensation

  (1,256)  -   (1,256)
             

Net cash provided (used) by financing activities

  (965)  -   (965)
             

Effect of exchange rate changes on cash

  5,924   -   5,924 

Net change in cash

  (3,961)  -   (3,961)
             

Cash:

            

Beginning of period

  20,070   -   20,070 
             

End of period

 $16,109  $-  $16,109 

 

Consolidated Statements of Changes in Equity

 

June 30, 2025

 
  

As Computed

Under Previous

Method

  

Effect of

Accounting

Change

  

As Reported

Under New

Method

 

Retained earnings

            

Balance at June 30, 2024

  129,592   30,937   160,529 

Net income (loss) attributable to Twin Disc

  (1,894)  1,197   (697)

Dividends paid to shareholders

  (2,284)  -   (2,284)

Balance at June 30, 2025

 $125,414  $32,134  $157,548 

 

 

As a result of the retrospective application of the change in accounting principle, the following financial statement line items within the unaudited interim 2026 and 2025 quarterly condensed consolidated financial statements were adjusted, as follows:

 

  

For the Quarter Ended

 

Consolidated Balance Sheets

 

September 26, 2025

  

December 26, 2025

  

March 27, 2026

  

June 30, 2026

 
  

As Computed

Under Previous

Method

  

Effect of

Accounting

Change

  

As Reported

Under New

Method

  

As Computed

Under Previous

Method

  

Effect of

Accounting

Change

  

As Reported

Under New

Method

  

As Computed

Under Previous

Method

  

Effect of

Accounting

Change

  

As Reported

Under New

Method

  

As Computed

Under Previous

Method

  

Effect of

Accounting

Change

  

As Reported

Under New

Method

 

Inventories, net

 $158,272  $32,134  $190,406  $163,177  $32,134  $195,311  $160,331  $32,134  $192,465  $145,407  $32,621  $178,028 

Deferred income tax assets

  2,790      2,790   27,551   (7,462)  20,089   27,248   (7,462)  19,786   28,669   (7,576)  21,093 

Retained earnings

  124,330   32,134   156,464   146,130   24,672   170,802   148,875   24,672   173,547   157,295   25,045   182,340 

 

 

  

For the Quarter Ended

 

Consolidated Balance Sheets

 

September 27, 2024

  

December 27, 2024

  

March 28, 2025

  

June 30, 2025

 
  

As Computed

Under Previous

Method

  

Effect of

Accounting

Change

  

As Reported

Under New

Method

  

As Computed

Under Previous

Method

  

Effect of

Accounting

Change

  

As Reported

Under New

Method

  

As Computed

Under Previous

Method

  

Effect of

Accounting

Change

  

As Reported

Under New

Method

  

As Computed

Under Previous

Method

  

Effect of

Accounting

Change

  

As Reported

Under New

Method

 

Inventories, net

 $143,865  $30,937  $174,802  $128,278  $30,937  $159,215  $137,957  $30,937  $168,894  $151,951  $32,134  $184,085 

Retained earnings

  126,257   30,937   157,194   126,610   30,937   157,547   124,572   30,937   155,509   125,414   32,134   157,548 

 

 

  

For the Quarter Ended

 
  

September 26, 2025

  

December 26, 2025

  

March 27, 2026

  

June 30, 2026

 

Consolidated Statement of Operations and

Comprehensive Income (Loss)

 

As Computed

Under Previous

Method

  

Effect of

Accounting

Change

  

As Reported

Under New

Method

  

As Computed

Under Previous

Method

  

Effect of

Accounting

Change

  

As Reported

Under New

Method

  

As Computed

Under Previous

Method

  

Effect of

Accounting

Change

  

As Reported

Under New

Method

  

As Computed

Under Previous

Method

  

Effect of

Accounting

Change

  

As Reported

Under New

Method

 

Cost of goods sold

 $57,062  $-  $57,062  $67,813  $-  $67,813  $69,563  $-  $69,563  $84,760  $(487) $84,273 

Gross profit

  22,934   -   22,934   22,367   -   22,367   27,131   -   27,131   29,640   487   30,127 

Income (loss) from operations

  2,235   -   2,235   2,087   -   2,087   5,822   -   5,822   7,328   487   7,815 

Income (loss) before income taxes and noncontrolling interest

  571   -   571   698   -   698   5,395   -   5,395   6,445   487   6,932 

Income tax benefit (expense)

  (983)  -   (983)  21,780   (7,462)  14,318   (1,839)  -   (1,839)  2,363   114   2,477 

Net income (loss)

  (412)  -   (412)  22,478   (7,462)  15,016   3,556   -   3,556   9,036   373   9,409 

Net income (loss) attributable to Twin Disc, Incorporated

  (518)  -   (518)  22,371   (7,462)  14,909   3,325   -   3,325   8,987   373   9,360 
                                                 

Earnings (loss) per share data:

                                                

Basic earnings (loss) per share attributable to Twin Disc, Incorporated common shareholders

 $(0.04) $-  $(0.04) $1.58  $(0.53) $1.05  $0.23  $-  $0.23  $0.63  $0.03  $0.66 

Diluted earnings (loss) per share attributable to Twin Disc, Incorporated common shareholders

 $(0.04) $-  $(0.04) $1.55  $(0.51) $1.04  $0.23  $-  $0.23  $0.61  $0.03  $0.64 
                                                 

Weighted average shares outstanding data:

                                                

Basic shares outstanding

  13,961   -   13,961   14,165   -   14,165   14,198   -   14,198   14,199   -   14,199 

Diluted shares outstanding

  13,961   -   13,961   14,389   -   14,389   14,416   -   14,416   14,666   -   14,666 
                                                 

Comprehensive income (loss)

                                                

Net income (loss)

 $(412) $-  $(412) $22,478  $(7,462) $15,016  $3,556  $-  $3,556  $9,036  $373  $9,409 

Comprehensive income (loss)

  (2,113)  -   (2,113)  24,016   (7,462)  16,554   1,167   -   1,167   8,013   373   8,386 

Comprehensive income (loss) attributable to Twin Disc, Incorporated

  (2,304)  -   (2,304)  23,936   (7,462)  16,474   956   -   956   8,136   373   8,509 

 

  

For the Quarter Ended

 
  

September 27, 2024

  

December 27, 2024

  

March 28, 2025

  

June 30, 2025

 

Consolidated Statement of Operations and

Comprehensive Income (Loss)

 

As Computed

Under Previous

Method

  

Effect of

Accounting

Change

  

As Reported

Under New

Method

  

As Computed

Under Previous

Method

  

Effect of

Accounting

Change

  

As Reported

Under New

Method

  

As Computed

Under Previous

Method

  

Effect of

Accounting

Change

  

As Reported

Under New

Method

  

As Computed

Under Previous

Method

  

Effect of

Accounting

Change

  

As Reported

Under New

Method

 

Cost of goods sold

 $53,575  $-  $53,575  $68,241  $-  $68,241  $59,536  $-  $59,536  $66,660  $(1,197) $65,463 

Gross profit

  19,322   -   19,322   21,680   -   21,680   21,706   -   21,706   30,018   1,197   31,215 

Income (loss) from operations

  (165)  -   (165)  2,760   -   2,760   1,947   -   1,947   5,345   1,197   6,542 

Income (loss) before income taxes and noncontrolling interest

  (2,145)  -   (2,145)  2,651   -   2,651   (280)  -   (280)  1,543   1,197   2,740 

Income tax benefit (expense)

 $627  $-  $627  $1,552  $-  $1,552  $1,142  $-  $1,142   47      47 

Net income (loss)

  (2,772)  -   (2,772)  1,099   -   1,099   (1,422)  -   (1,422)  1,496   1,197   2,693 

Net income (loss) attributable to Twin Disc, Incorporated

  (2,765)  -   (2,765)  919   -   919   (1,472)  -   (1,472)  1,424   1,197   2,621 
                                                 

Earnings (loss) per share data:

                                                

Basic earnings (loss) per share attributable to Twin Disc, Incorporated common shareholders

 $(0.20) $-  $(0.20) $0.07  $-  $0.07  $(0.11) $-  $(0.11) $0.10  $0.08  $0.19 

Diluted earnings (loss) per share attributable to Twin Disc, Incorporated common shareholders

 $(0.20) $-  $(0.20) $0.07  $-  $0.07  $(0.11) $-  $(0.11) $0.10  $0.08  $0.19 
                                                 

Weighted average shares outstanding data:

                                                

Basic shares outstanding

  13,778   -   13,778   13,868   -   13,868   13,895   -   13,895   13,897   -   13,897 

Diluted shares outstanding

  13,778   -   13,778   14,058   -   14,058   13,895   -   13,895   13,971   -   13,971 
                                                 

Comprehensive income (loss)

                                                

Net income (loss)

 $(2,772) $-  $(2,772) $1,099  $-  $1,099  $(1,422) $-  $(1,422) $1,496  $1,197   2,693 

Comprehensive income (loss)

  3,760   -   3,760   (10,792)  -   (10,792)  2,278   -   2,278   13,829   1,197   15,026 

Comprehensive income (loss) attributable to Twin Disc, Incorporated

  3,624   -   3,624   (10,914)  -   (10,914)  2,196   -   2,196   13,835   1,197   15,032