Twin Disc (TWIN) 8-K Regulation FD Disclosure

Twin Disc, Incorporated

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January 27, 2010

2

Twin Disc, Incorporated

Safe Harbor Statement

This presentation contains statements that are forward-looking
within the meaning of Section 21E of the Securities Exchange Act
of 1934, as amended.These statements are based on
management’s current expectations that are based on
assumptions that are subject to risks and uncertainties.Actual
results may vary because of variations between these
assumptions and actual performance.Investors are referred to
Twin Disc’s fiscal year 2009 Annual Report and Form 10-K,
“Management’s Discussion and Analysis of Financial Condition
and Results of Operations - Forward-Looking Information,” which
outlines certain risks regarding the Company’s forward-looking
statements.Copies of the Company’s SEC filings may be
obtained from the SEC, and are available on Twin Disc’s web site
(www.twindisc.com), or by request from the Investor Relations
department at the Company.

January 27, 2010

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Twin Disc, Incorporated

2

1

1

#

Manufacturing location (# of facilities in each location)

Company owned distribution/service location

Purchasing/sourcing offices

Twin Disc At A Glance

•Founded in 1918

•Headquartered in Racine, WI

•≈1,000 employees

•FY09 Revenues of $296M
FY08 Revenues of $332M

•We are a global company

–Well-known customers
around the world

–Mfg Operations in the U.S.,
Italy, Belgium, Switzerland
and Japan (JV)

–World-wide distributor
network

–61% of fiscal 2009 sales to
international markets

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Twin Disc, Incorporated

FY 2010 Financial Highlights

•Financial Results Improved Sequentially

–Q2 versus Q1 Sales up 17%

•Year-to-Date Cash Flow From Operations Strong

–Generated $16.1 million thru first 6 months of fiscal year

•Total Debt Reduced $9.2 million, or 18%, in First Six
Months

•Six Month Backlog Up 16% Year-to-Date

–Driven by higher order activity for 8500 series transmission
for oil & gas market

–Military backlog also increased and remains strong

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Twin Disc, Incorporated

$ millions

•Sales down 32% off near record levels

–Experienced continued softness in
certain end markets

–Seasonal and temporary plant
shutdowns impacted Q1 shipments

–Asian markets continued at record
levels

–Six month backlog grew over 12% in
the quarter

•Gross Margin as % of Sales improved
590 basis points to 26.8% in Q2,
compared to 20.7% in Q1

Net Sales & Net Earnings
(Second Fiscal Quarter)

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Twin Disc, Incorporated

$ millions

•Sales down 34% off near record levels

–Experienced continued softness

–Seasonal and temporary plant
shutdowns impacted Q1 shipments

–Asian markets continued at record
levels

•Q2 loss of $0.5 million improved
sequentially from Q1 loss of $2.4
million

Net Sales & Net Earnings
(First Six Months)

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Twin Disc, Incorporated

$ millions

•Q2 Sales up 17.2% vs. Q1 Sales

–6 month backlog increased 12.1% in
the quarter to $70 million

–Asian markets continued at record
levels

–ARFF & Military transmission
markets holding steady

–Pleasure craft marine remains weak

•Gross Margin as % of Sales
improved 590 basis points to 26.8%
in Q2, compared to 20.7% in Q1

Net Sales & Net Earnings
(First & Second Fiscal Quarter)

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Twin Disc, Incorporated

$ millions

16%

of sales

2%

of sales

•Generated $16.1 million of operating
cash flow in first half of Fiscal 2010

–Continue to focus on inventory and
receivables management

•Debt Reduction & Cash

–Revolver balance has decreased
$14.5 million over the past 3 quarters

–As of December 25, 2009, over $21
million of available borrowing on
revolver & nearly $17 million of cash

–In compliance with all financial
covenants

Operating Cash Flows
(First Six Months)

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Twin Disc, Incorporated

Marine & Propulsion Systems

•Pleasure Craft market soft
worldwide

–However, building share of
market with new technology

•Work Boat market steady

–Europe soft

–North America moderating

–Asia-Pacific growing

•Patrol Boat market
experiencing global growth

–Asian market experiencing
strong growth

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Twin Disc, Incorporated

Land-Based Products

•Industrial markets soft

–Agriculture, irrigation,
recycling and construction

–No impact from ‘stimulus’

•ARFF and Military holding
steady

–ARFF:Continue to increase
market share with ‘pump &
roll’ transmissions

•Oil & Gas markets picking up

–Orders increasing globally
for 8500 & air clutches

–New 7500 series

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Twin Disc, Incorporated

2006

2007

2008

48% International Sales

61% International Sales

USA

Italy

Rest of

World

2009

Corporate Profile - Geographic Diversity

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Twin Disc, Incorporated

Global Outsourcing

Lean Manufacturing

$25 million Global Cost
Reduction & Avoidance Program

• Pension freeze

• Salary & wage reductions

• Temporary layoffs in US

• Government-sponsored programs in Europe

• ME&A cost reductions

• Restructuring

• Voluntary retirement packages

• Suspension of corporate incentive program

Managing Our Cost Structure

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Twin Disc, Incorporated

What Differentiates Us?

•Technology

–Oil & Gas

•8500 Series

•7500 Series - new in Fiscal 2010

–ARFF

•“Pump & Roll”

–Military

•“Legacy” Contracts

•Global Distribution and Service Network

•Product/Market & Geographic Diversity

•Niche Market Focus

•90+ Years of Proven Application Know-How

•Core Manufacturing Capabilities

–Marine

•Patented QuickShift®

•Joystick Docking - new in Fiscal 2010

•Dynamic Positioning/DP 2

•Rolla CFD

Twin Disc, Incorporated

Looking Ahead

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Twin Disc, Incorporated

FY04

FY05

FY06

FY07

$ millions

FY08

FY09

FY10

•6 month backlog up 16%
since start of fiscal year

ØIncreased order activity
for 8500 series
transmission for the oil
& gas market

ØMilitary and ARFF
holding steady

ØIndustrial & Marine
continue to be soft

Corporate Six Month Backlog
(Mfg Orders to be shipped in the next 6 months)

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Twin Disc, Incorporated

Fiscal Year 2010 Outlook

•FY09 softness continued thru 1st half of FY10

•Mega Yacht - weakness expected to continue

•ARFF & Military will remain strong

•Oil & Gas - order activity is increasing

•Patrol Boat market expanding

•Asian market continues at record levels

•New product launches: 7500 & Joystick Docking

•“Cash is King” - continued focus on working capital
management and debt reduction

•Expect sequential quarterly improvements

Twin Disc, Incorporated

WE PUT HORSEPOWER TO WORK ™

Twin Disc, Incorporated

Appendices

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Twin Disc, Incorporated

Appendix I

FY 2009 Financial Highlights

•Sales were down 10.8% versus FY 2008

–1st Half: down less than 1% off record ’08 levels

–2nd Half: down nearly 20% off record ’08 levels

•Key Markets

–Mega Yacht, Oil & Gas and Industrial markets saw
significant fall off as the year progressed

–ARFF, Military and Commercial Marine were steady

–Sales in the Pacific Rim continued at record pace and
experienced double-digit growth

•$25 million cost reduction and avoidance program
announced in 4th Fiscal Quarter, including significant
1st Fiscal Quarter 2010 temporary plant shutdowns

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Twin Disc, Incorporated

Appendix II

Corporate Profile - Market Diversity

Pleasure Craft Market:

•Target Markets: High speed
planing and displacement yachts
from 50’ to 150’, diesel powered

•Products:Transmissions,
Surface Drives, Propellers,
Steering/Thruster/Trim Systems,
Water Jets, Controls

•Channels: Engine OEMs &
dealers, & boat builders

•Customers: CAT, CMD, MAN,
MTU, Volvo / Azimuth, Baia,
Ferretti, Palmer Johnson, Riviera,
Sanlorenzo, Sunseeker

•Competition: ZF/ Kamewa /Side
Power, Ultraflex

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Twin Disc, Incorporated

Appendix III

Corporate Profile - Market Diversity

Work Boat Market:

•Target Markets: planing and
displacement vessels from 30’ to
250’, diesel powered

•Products:Transmissions,
Propellers, MCD’s, Water Jets,
Controls

•Channels: Engine OEMs &
dealers, boat builders &
distribution

•Customers: CAT, Cummins,
IVECO, Mitsubishi, Volvo /
Damen / Sewart Supply
(operators: Secor, Tidewater,
Groupe Bourbon)

•Competition: ZF, Reintjes

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Twin Disc, Incorporated

Appendix IV

Corporate Profile - Market Diversity

Patrol Boat Market:

•Target Markets: military, patrol
and coast guard vessels from 30’
to 90’, diesel powered

•Products:Transmissions,
Surface Drives, Propellers,
Steering/Thruster/Trim Systems,
Water Jets, Controls

•Channels: Engine OEMs &
dealers, naval authorities & boat
builders

•Customers: CAT, CMD, MAN,
MTU, Volvo / Israeli Navy, Turkish
Coast Guard, USCG, US Navy,
RCMP

•Competition: ZF / Kamewa,
Hamilton

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Twin Disc, Incorporated

QuickShift®Transmissions

Electronic Controls

Bow Thrusters

Anchor Winches

Gangways

Trim Tabs, Stern Thrusters

Power Steering

Marine Transmissions, Propulsion & Boat Management Systems

We have been very successful “bundling” more marine products

• Increasing content and value on each vessel

• Working directly with the shipyards

• Industry expert on vessel performance and handling

Appendix V

Corporate Profile - Market Diversity

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Twin Disc, Incorporated

Appendix VI

Corporate Profile - Market Diversity

Industrial Products:

•Target Market:Heavy duty
industrial disconnect applications

•Products: Mechanical & hydraulic
clutches, PTOs & pump mount
drives, 100 - 2,500 HP

•Channels:Distribution & OEMs

•Customers: Bandit, Morbark,
Peterson Pacific / OEM engine
dealers

•Competitors: Funk, NACD, PT
Tech, Stiebel, Transfluid, WPT

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Twin Disc, Incorporated

Appendix VII

Corporate Profile - Market Diversity

Industrial Transmissions:

•Target Market:Off-highway and
all-terrain specialty vehicles,
diesel powered

•Products:Powertrain
components - - 400 to 3,000 HP

•Channel:OEM vehicle mfrs.

•Customers: BAE, Rosenbauer,
Oshkosh, Tatra / BJ Services,
Cisco High-Lift, Crown Energy,
Enerflo, Fractec, Trican, Tai’an

•Competitors: Allison, ZF

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Twin Disc, Incorporated

$ millions

% sales

* See Appendix XI for reconciliation of TTM figures to reported figures.

Appendix VIII

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Twin Disc, Incorporated

Non-GAAP Financial Disclosures

Financial information excluding the impact of certain significant items in this presentation are not measures that
are defined in U.S. Generally Accepted Accounting Principles (“GAAP”).These items are measures that
management believes are important to adjust for in order to have a meaningful comparison to prior and future
periods and to provide a basis for future projections and for estimating our earnings growth prospects.Non-
GAAP measures are used by management as a performance measure to judge profitability of our business
absent the impact of foreign currency exchange rate changes and acquisitions.Management analyzes the
company’s business performance and trends excluding these amounts.These measures, as well as EBITDA,
provide a more consistent view of performance than the closest GAAP equivalent for management and
investors.Management compensates for this by using these measures in combination with the GAAP
measures.The presentation of the non-GAAP measures in this presentation are made alongside the most
directly comparable GAAP measures.

Definition - Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA)

The sum of, net earnings and adding back provision for income taxes, interest expense, depreciations and
amortization expenses:this is a financial measure of the profit generated excluding the above mentioned
items.

Appendix IX

Non-GAAP Financial Disclosures

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Twin Disc, Incorporated

* See Appendix XI for reconciliation of TTM figures to reported figures.

Appendix X

Reconciliation of Net Earnings to EBITDA

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Twin Disc, Incorporated

Appendix XI

Reconciliation of TTM Data to Reported Quarterly Figures

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Twin Disc, Incorporated

Appendix XII

Fiscal Year Condensed Consolidated Statements of Operations

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Twin Disc, Incorporated

Appendix XIII

2nd Fiscal Qtr Condensed Consolidated Statements of Operations

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Twin Disc, Incorporated

$317

$243

$219

$332

$296

Net Sales by Segment

Appendix XIV

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Twin Disc, Incorporated

Net Earnings by Segment (before Corporate Expense)

Appendix XV

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Twin Disc, Incorporated

$ millions

% sales

Operating Cash Flows - Fiscal Year

Appendix XVI

* See Appendix XI for reconciliation of TTM figures to reported figures.

Twin Disc, Incorporated

WE PUT HORSEPOWER TO WORK ™