Twin Disc, Inc., Announces Financial Results
RACINE, Wis.--Jan. 17, 2003--Twin Disc, Inc. , today announced financial results for its fiscal 2003 second quarter and first six months ended December 31, 2002.For the fiscal second-quarter 2003, net sales were $42.8 million versus $44.0 million for the same period one year ago. The company reported a net loss of $3.1 million, or $1.10 per share, compared with last year's net income of $0.4 million, or $0.15 per diluted share. Results were negatively impacted by after-tax charges to continuing operations of approximately $1.7 million, or $0.61 per share. For the fiscal first half, revenues were $79.3 million and the loss amounted to $4.8 million, or $1.72 per share. This compares with revenues of $84.6 million and net income of $0.7 million, or $0.25 per diluted share, for the year-ago first half.
Chairman and Chief Executive Officer Michael E. Batten said, "Consistent with continuing cost-reduction efforts, we implemented severance and voluntary separation programs during the fiscal second quarter to align the corporate workforce with market conditions. Approximately 72 percent of the $0.61 per-share charge taken during the period was attributable to the workforce reductions, with the balance representing the recognition of an impairment of certain licensing agreements in accordance with SFAS 144. Excluding these special charges, the per-share loss from continuing operations for the fiscal second quarter narrowed to $0.49--an improvement from the loss of $0.62 for the first fiscal quarter of 2003."
He continued, "However, while financial results have been restrained for two consecutive quarters, the horizon for the balance of the fiscal year is brightening. We continue to compete successfully for defense applications, as evidenced by two contract awards at the end of the quarter for our land-based transmissions totaling approximately $3 million. This bolstered backlog during the quarter and we are further encouraged by increased interest from the U.S. military for our marine transmissions.
"We anticipate a return to profitability in the fiscal second half and look forward to improving prospects beyond fiscal 2003," concluded Batten.
Twin Disc, Inc., designs, manufactures and internationally distributes heavy-duty off-highway power transmission equipment for the construction, industrial, government, marine, agricultural, and energy and natural resources markets.
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 Company intends that such forward-looking statements be subject to the safe harbors created thereby. All forward-looking statements are based on current expectations regarding important risk factors including those identified in the Company's most recent periodic report and other filings with the Securities and Exchange Commission. Accordingly, actual results may differ materially from those expressed in the forward-looking statements, and 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.
-- Financial Results Follow--
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per-share data; unaudited)
Three Months Ended Six Months Ended
December 31, December 31,
2002 2001 2002 2001
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Net sales $42,794 $43,986 $79,315 $84,617
Cost of goods sold 36,114 34,024 66,705 66,109
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Gross profit 6,680 9,962 12,610 18,508
Marketing, engineering and
administrative expenses 8,971 8,698 17,290 16,546
Restructuring of operations 2,042 -- 2,042 --
Interest expense 325 444 633 932
Other income (expense), net (64) 14 (105) (291)
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11,274 9,156 19,860 17,187
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(Loss) earnings before income taxes
and minority interest (4,594) 806 (7,250) 1,321
Income taxes (benefit) (1,536) 372 (2,431) 592
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(Loss) earnings before minority
interest (3,058) 434 (4,819) 729
Minority interest (29) (11) 1 (34)
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Net (loss) earnings $(3,087) $423 $(4,818) $695
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Earnings (loss) per share:
Basic $(1.10) $0.15 $(1.72) $0.25
Diluted $(1.10) $0.15 $(1.72) $0.25
Average shares outstanding:
Basic 2,808 2,808 2,808 2,808
Diluted 2,808 2,808 2,808 2,808
Dividends per share $0.175 $0.175 $0.35 $0.35