Twin Disc, Inc., Announces Financial Results
19 April 1999
Twin Disc, Inc., Announces Financial Results for Fiscal 1999 Third Quarter and First Nine Months
RACINE, Wis.--April 16, 1999--Twin Disc, Inc. , today announced financial results for the fiscal 1999 third quarter and first nine months ended March 31, 1999.Net sales for the fiscal 1999 third quarter were $41,139,000, compared with the $49,029,000 reported for the same quarter last year. The lower net sales were the result of weaker market demand for the Company's marine transmission products, automatic transmissions, torque converters and aftermarket parts.
For the third quarter, the Company reported a net loss of $1,782,000, or $0.63 per diluted share. Most of the net loss was the result of certain one-time charges associated with the restructuring of the Company's Belgium operation, domestic workforce adjustments, currency exchange, and the restructuring of the Company's investment in its Niigata Converter joint venture in Japan.
For the fiscal 1998 third quarter, net earnings were $2,384,000, or $0.82 per diluted share.
For the first nine months of fiscal 1999, the Company reported net sales of $121,872,000, compared with $150,903,000 for the same period in fiscal 1998. The net loss for the period was $1,485,000, or $0.52 per diluted share, versus net income of $5,856,000, or $2.03 per diluted share, reported for the first nine months of fiscal 1998.
Michael E. Batten, the Company's Chairman and Chief Executive Officer, stated, "As we previously projected, softer oil prices coupled with the continued economic slowdown in Asia resulted in less demand for our marine transmission products during the quarter. Customers' lower production levels of specialty trucks and agricultural equipment affected sales of Twin Disc's automatic transmissions, and torque converter sales were similarly affected by softness in the construction equipment industry. Additionally, aftermarket parts sales continued to be depressed. These lower-than-normal parts sales were primarily attributable to two compounding factors. First, we were affected by slower inventory turnover for our customers, who are facing the same market conditions as the rest of the industry. Second, customers' increased confidence in our shorter delivery lead times, a result of our recent logistical improvements, led them to postpone reordering."
"Needless to say, we are not satisfied with our third-quarter results; however, we are encouraged by our restructuring and growth initiatives, which are beginning to bear fruit. For example, the cost-cutting measures taken in the second quarter have led to a reduction in overhead expenses, and the integration of our recent acquisitions is proceeding on schedule. The Technodrive acquisition, which was completed in February, added to earnings in the third quarter. Additionally, we expect the product line acquired from Rockford Powertrain to be accretive to earnings in the fourth quarter. Our growth strategy remains intact as we continue to seek new products and product extensions," Mr. Batten concluded.
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.
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.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
Three Months Ended Nine Months Ended
March 31, March 31,
1999 1998 1999 1998
---- ---- ---- ----
Net sales $ 41,139 $ 49,029 $ 121,872 $ 150,903
Cost of goods sold 33,823 36,219 96,061 115,907
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Gross profit 7,316 12,810 25,811 34,996
Marketing, engineering
and administrative
expenses 8,488 8,246 25,303 24,473
Interest expense 573 376 1,325 1,135
Other (income) and
expense, net 273 38 304 (571)
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Earnings (loss)
before income tax (2,018) 4,150 (1,121) 9,959
Income taxes (236) 1,766 364 4,103
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Net earnings (loss) ($ 1,782) $ 2,384 ($ 1,485) $ 5,856
--------- --------- --------- ---------
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Earnings per share:
Basic ($ 0.63) $ 0.84 ($ 0.52) $ 2.07
Diluted ($ 0.63) $ 0.82 ($ 0.52) $ 2.03
Average shares
outstanding:
Basic 2,835 2,842 2,835 2,829
Diluted 2,839 2,899 2,848 2,883
Dividends per share $ 0.21 $ 0.19 $ 0.63 $ 0.57