Twin Disc 8K Regulation FD Disclosure | TWIN 6 Nov 12

Twin Disc, Incorporated

WE PUT HORSEPOWER TO WORK ™

November 7, 2012

Twin Disc, Incorporated

November 7, 2012

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 2012 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.

Twin Disc, Incorporated

• Founded in 1918

• Headquartered in Racine, WI

• ≈1,030 employees (FYE ‘12)

• FY12 Revenues of $356M
FY11 Revenues of $310M
FY10 Revenues of $228M

• 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

– Global: 53% of fiscal 2012
sales to international markets

Manufacturing location (# of facilities in each location)

Company owned distribution/service location

Purchasing/sourcing offices

Twin Disc At A Glance

November 7, 2012

Twin Disc, Incorporated

November 7, 2012

FY 2012 Highlights

$ millions

• Quarterly sequential sales &
earnings improvement

– Sales up over 15% vs. FY ‘11

– Earnings up nearly 40% to record $2.26 per
diluted share

• Key Markets

– Oil & gas markets experienced strong
growth in shipments compared to FY ‘11

– Sales in the Pacific Rim continued strong, at
near record levels, Asia became 2nd largest
market after N. America

– Modest recovery in Mega Yacht and
European markets off of fiscal ‘10 lows

– Patrol boat business continued to expand

– ARFF, Military & Commercial Marine were
steady

Twin Disc, Incorporated

Net Sales & Net Earnings
(1st Fiscal Quarter)

• Sales down 15.4% from record Q1 ‘12

– Pressure pumping transmission
business continued to slow down

– Commercial marine business
experienced strong demand in North
America (Gulf Coast) & Asia
(particularly in China)

• $1.3 million profit, or $0.11 per diluted
share, down from all-time quarterly
record of Q1 ‘12

– Unfavorable mix of business and
volume declines impacted margins &
overall profitability in Q1, typically the
Company’s weakest quarter

+30%

+33%

November 7, 2012

Twin Disc, Incorporated

November 7, 2012

Land-Based Products
Pressure Pumping

• Fiscal 2012 Highlights:

– Achieved record unit sales

– Introduced 7500 series transmission into
the market

– Backlog declined as order activity dropped
throughout the 2nd half of fiscal year

• Fiscal 2013 Outlook:

– Expect slow orders and shipments thru at
least 3rd fiscal quarter

– Operators will continue to adjust to supply
overhang and lower prices

• Fiscal 2014 & Beyond:

– Unconventional drilling to grow significantly

– International opportunities to expand

– 7500 acceptance to continue

– Company continues to be well positioned
for growth

(U.S. dry gas in trillion cubic feet per year)

Source: EIA, Annual
Energy Outlook 2012.

Twin Disc, Incorporated

November 7, 2012

Land-Based Products
ARFF & Military

• Fiscal 2012 Highlights:

– ARRF and military transmission sales
continued to show modest, steady
growth

• Fiscal 2013 Outlook:

– Developing next generation
transmission system

– Market to remain stable, with potential
for modest growth

• Fiscal 2014 & Beyond:

– Expect to see continued steady
demand for both ARFF and military
transmissions over the long run

Twin Disc, Incorporated

November 7, 2012

Land-Based Products
Industrial Products

• Fiscal 2012 Highlights:

– Shipments and orders up in N. America, and
more moderately in Europe

– Aggregate, recycling, construction and oil & gas
markets recovered from post recession levels

• Fiscal 2013 Outlook:

– Market expected to remain steady thru fiscal 2013

– Developing remote controlled dry PTO’s and
upgrading hydraulic PTO product line

– Expanding pump drives into higher HP

– Focus on expansion into BRIC

• Fiscal 2014 & Beyond:

– Expect international markets to drive long-term
growth strategy

– Continue product differentiation and technological
innovation to meet market demands

Twin Disc, Incorporated

November 7, 2012

Marine & Propulsion Systems
Commercial Marine

• Fiscal 2012 Highlights:

– N. American (particularly Gulf Coast)
market experienced strong year-over-year
gains

– Asia continued near record levels

– European shipbuilding remained at weak
levels

• Fiscal 2013 Outlook:

– N. American and Asian markets expected
to continue to grow

– European market remains uncertain, likely
to take 2-3 years to recover

• Fiscal 2014 & Beyond:

– Continue expansion into South America
(particularly Brazil) and Asia

– New product development, including
joystick for commercial applications

Twin Disc, Incorporated

November 7, 2012

Marine & Propulsion Systems
Patrol Boat

• Fiscal 2012 Highlights:

– Growth continued in Asia, especially
China, as need for coastal security
increased

– Twin Disc propulsion package
recognized as the standard for fast
patrol boat technology

• Fiscal 2013 Outlook:

– Demand remains strong, but
unpredictable due to delays in build
schedules

• Fiscal 2014 & Beyond:

– Expect demand for coastal security
applications to further grow

Twin Disc, Incorporated

November 7, 2012

Marine & Propulsion Systems
Pleasure Craft

• Fiscal 2012 Highlights:

– Market remained at historic lows
(down 50-70% versus prior highs)

– EJS™ introduced, gained market share

– Announced Caterpillar agreements

• Fiscal 2013 Outlook:

– New boat construction to remain at
depressed levels

– Continue to focus on global packaging
strategy to gain market share

– Cat® Three60 available to the market

• Fiscal 2014 & Beyond:

– Likely 5+ years before market fully recovers
to pre-recession levels

– Continue to emphasize product development
and technological differentiation in our
products to further market share gains

Twin Disc, Incorporated

November 7, 2012

Corporate Profile - Geographic Diversity
Sales (as a % of total sales)

FY2012

FY2006

• Highlights:

– More than 50% of sales were outside the
USA in fiscal 2012

– Asia surpassed Europe as 2nd largest end
market (achieving record sales)

– Sales to China more than doubled year-over
-year

– Overall CAGR from 2006 to 2012 = 7%
(Asia = 13%)

• Outlook:

– Continue to focus on BRIC as largest
growth opportunity

– Sourcing, sales and engineering resources
already on the ground in India & China, with
plans to expand the Company’s capabilities
in those regions

Twin Disc, Incorporated

November 7, 2012

Managing Our Cost Structure

CAPEX

• Investing in core competencies

• Expanding presence in low cost manufacturing locations

• Spent $90+ million over past 8 yrs

Twin Disc, Incorporated

Sourcing Offices

November 7, 2012

Managing Our Cost Structure

Low Cost

Lower Cost

Corporate HQ/Mfg

Mfg locations

Twin Disc, Incorporated

• Technology

– Oil & Gas

• 8500 Series

– ARFF

• “Pump & Roll”

– Military

• “Legacy” Contracts

November 7, 2012

What Differentiates Us?

– Marine

• Patented QuickShift®

• Dynamic Positioning/DPII

• Rolla CFD

Twin Disc, Incorporated

November 7, 2012

What Differentiates Us?

• 94+ Years of Proven Application Know-How

• Niche Market Focus

• Product/Market & Geographic Diversity

• Core Manufacturing Capabilities

Mfg location

Co.-owned dist.

3rd Party dist.

Service dealers

Twin Disc, Incorporated

Looking Ahead

November 7, 2012

Twin Disc, Incorporated

November 7, 2012

FY04

FY05

FY06

FY07

$ millions

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

FY08

FY09

FY11

FY10

FY12

FY13

Twin Disc, Incorporated

November 7, 2012

Fiscal Year 2013 Outlook

• Oil and Gas landscape causes near term outlook to
be cautious

• Marine markets will remain mixed

– Pleasure Craft improving off of low base, primarily from
market share gains - EJS™ & Cat Three60 impact

– Work Boat, including US Gulf and Asian markets, showing
improvement

– Patrol Boat market is expanding

• Industrial, ARFF & Military showing modest growth

• Asian market continues at near record levels; Europe
is slow; while US (excluding Oil and Gas) is
improving modestly

Twin Disc, Incorporated

November 7, 2012

Fiscal Year 2014 & Beyond

• Oil and Gas landscape: mid to longer term prospects remain very
favorable

– Continued globalization of the pressure pumping business

– 7500 expected to gain market share

• Global marine markets expected to be growing

– Pleasure Craft market expected to be recovering, as well as continuing
market share gains coming from EJS® and Cat® Three60 and the
introduction of innovative Cat POD system featuring patented QuickShift®
transmission technology

– North American and Asian Work Boat market anticipated to continue to
grow, with Europe beginning to show signs of recovery

– Patrol Boat demand for coastal security applications to grow

• Industrial, ARFF & Military outlook remains steady

• Global growth opportunities in BRIC markets, particularly China, India
and Brazil, continue to materialize

Twin Disc, Incorporated

WE PUT HORSEPOWER TO WORK ™

November 7, 2012

Twin Disc, Incorporated

Appendices

November 7, 2012

Twin Disc, Incorporated

November 7, 2012

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, EJS

• Channels: Engine OEMs &
dealers, & boat builders

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

• Competition: ZF, Reintjes /
Kamewa /Side Power, Ultraflex

Appendix I

Twin Disc, Incorporated

November 7, 2012

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 /
Kamewa, Hamilton

Appendix II

Twin Disc, Incorporated

November 7, 2012

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, EJS

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

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

• Competition: ZF / Kamewa

Appendix III

Twin Disc, Incorporated

November 7, 2012

QuickShift®
Transmissions

EJS®/Electronic
Controls

Bow Thrusters

Anchor Winches

Gangways

Trim Tabs, Stern Thrusters

Power Steering

Marine Transmissions, Propulsion & Boat Management Systems

Corporate Profile - Market Diversity

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 IV

Twin Disc, Incorporated

November 7, 2012

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

Appendix V

Twin Disc, Incorporated

November 7, 2012

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, MG Bryan,
Trican, Tai’an, Zoomlion

• Competitors: Allison, Cat

Appendix VI

Twin Disc, Incorporated

November 7, 2012

Frac Rig Diagram

Engine

Transmission

Pump

Appendix VII

Twin Disc, Incorporated

November 7, 2012

$ millions

% sales

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

Appendix VIII

Twin Disc, Incorporated

November 7, 2012

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

Twin Disc, Incorporated

November 7, 2012

Reconciliation of Net Earnings to EBITDA

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

Appendix X

Twin Disc, Incorporated

November 7, 2012

Reconciliation of TTM Data to Reported Quarterly Figures

Appendix XI

Twin Disc, Incorporated

November 7, 2012

Fiscal Year Condensed Consolidated Statements of Operations

Appendix XII

* Represents trailing four quarter figures as of the quarter ending September 28, 2012.
See Appendix XI for reconciliation of TTM figures to reported figures.