Release Date: November 06, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Twin Disc Inc (TWIN, Financial) reported double-digit revenue growth in the first quarter, driven by strong demand in the marine and propulsion business.
- The acquisition of CASA has broadened Twin Disc Inc (TWIN)'s global reach and opened new cross-selling opportunities with European OEMs.
- Sales in the marine and propulsion segment grew by 22.9% year over year, supported by sustained activity in commercial markets and the luxury yacht market.
- The company is gaining traction with its elite clusters in new geographic markets, with strong demand from its largest North American distributor.
- Twin Disc Inc (TWIN) is capturing demand for hybrid and electric marine systems, winning significant orders that enhance its content offering.
Negative Points
- Twin Disc Inc (TWIN) experienced a 7% decline in sales in its land-based transmission business due to softness in the Asian Pacific region.
- The company reported a net loss of $2.8 million for the first quarter, impacted by foreign currency loss and additional interest expenses.
- EBITDA decreased by 23% compared to the first quarter of fiscal '24, reflecting challenges in profitability.
- The oil and gas business contributed only 10% of revenue for the quarter, down from 15% in the previous year's Q1.
- Twin Disc Inc (TWIN) faced near-term shipment delays and supply chain challenges, impacting its operational efficiency.
Q & A Highlights
Q: Can you provide an outlook on free cash flow for the year given the negative free cash generation this quarter?
A: Jeffrey Knutson, Chief Financial Officer - We expect to return to positive free cash flow as we focus on inventory reduction. The negative impact this quarter was due to significant year-end accrual payments and an unexpected inventory increase. We anticipate positive cash flow for the rest of the year, recovering some of the shortfall from this quarter.
Q: Any updates on the effect offering introduced a few quarters ago?
A: John Batten, Chief Executive Officer - The prototypes are still in the field, but we haven't had any customers commit to purchasing a fleet yet. Currently, our customers are more focused on traditional offerings.
Q: How much did the oil and gas business contribute to this quarter's revenue?
A: Jeffrey Knutson, Chief Financial Officer - The oil and gas segment contributed about 10% of the quarter's revenue, down from 15% in the same quarter last year, which impacted our overall performance.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
