Twin Disc Reports 11.9% Revenue Growth to $381.3 Million for Fiscal Year Ending June 30, 2026

Twin Disc, Incorporated reported a significant increase in financial performance for the fiscal year ending June 30, 2026, with net sales rising by 11.9% to $381.3 million, up from $340.7 million in the previous fiscal year. This growth was bolstered by the acquisition of Kobelt Manufacturing Co. Ltd., which contributed approximately $7.6 million in revenue. Excluding this acquisition, the company still achieved a 9.7% increase in revenue, driven by strong demand for its Veth product line and military applications, alongside favorable market conditions. The company also benefited from currency translation, which added $17.2 million to sales due to the strengthening euro against the U.S. dollar.

In terms of profitability, gross profit increased by $8.6 million, or 9.2%, to $102.6 million, although the gross profit margin decreased slightly to 26.9% from 27.6% in the prior year. The decline in margin was attributed to a less favorable product mix and the impact of tariffs, which diluted margins by approximately 50 basis points. Marketing, engineering, and administrative expenses rose by 2.5% to $84.5 million, primarily due to the full-year impact of Kobelt's operations and inflationary pressures on salaries. The company reported an effective tax rate of (102.8%), a significant change from 113.6% in the previous year, largely due to the release of a valuation allowance on deferred tax assets.

Operationally, Twin Disc's order backlog increased to $178.3 million, up 18.5% from $150.5 million a year earlier, reflecting strong demand for its products. The company employed 1,087 individuals as of June 30, 2026, an increase from 980 the previous year, largely due to the Kobelt acquisition. The manufacturing segment saw a 15.2% increase in sales, with notable growth in the Veth propulsion operation and Katsa operations, which reported increases of 16.4% and 30.8%, respectively. However, the distribution segment experienced an 11.6% decline in sales, primarily due to weaker demand in North America and Asia.

Looking ahead, Twin Disc anticipates capital expenditures between $23 million and $27 million for fiscal 2027, aimed at investing in modern equipment to enhance growth and operational efficiency. The company remains optimistic about its financial outlook, supported by a strong balance sheet and sufficient liquidity, with approximately $60 million available under its credit agreement as of June 30, 2026. Management believes that cash generated from operations, along with its credit facilities, will adequately fund its capital requirements in the foreseeable future.