Twin Disc (TWIN) 8-K Regulation FD Disclosure

Twin Disc, Incorporated

November 6, 2014

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 2014 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.

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November 6, 2014

Twin Disc, Incorporated

•Founded in 1918

•Headquartered in Racine, WI

•≈ 970 employees

•TTMRevenues of $262M
FY14 Revenues of $264M
FY13 Revenues of $285M
FY12 Revenues of $356M

•We are a global company

–Well-known customers
around the world

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

–World-wide distributor
network

–Global:55% of fiscal 2014
sales to international
markets (Asia Pacific = 29%)

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1

1

#

Manufacturing location (# of facilities in each location)

Company owned distribution/service location

Purchasing/sourcing offices

Twin Disc At A Glance

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November 6, 2014

Twin Disc, Incorporated

FY 2014 - Highlights

•Sales down 7% from FY ‘13

–Asian operations continued at record
levels, driven by strong demand in the
Chinese O&G and Asian commercial
marine markets

–Marine transmissions down 6% from
record 2013 levels

–N. American oil & pas activity picked up in
2nd half of fiscal year

•$3.6 million profit, or $0.32 per diluted
share, down $0.02 compared to FY ‘13

–Q1 of FY ‘14 included a $1.1 million, or
$0.10 per diluted share, restructuring
charge at the Company’s Belgian
operation

–Gross margin increased 120 basis points
to 29.3% driven by a more profitable
product mix and lower warranty expense

$ millions

+15%

-20%

* 2011 and 2012 fiscal year figures have been revised.See Footnote A in the
Company’s Form 10K for the period ending June 30, 2013.

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November 6, 2014

-7%

Sales

Net Earnings*

$310

$356

$285

$264

$18.0

$26.7

$3.8

$3.6

Twin Disc, Incorporated

1st Quarter Highlights

•Sales down 2% from Q1 of FY ‘14

–Biggest decline in Asia, partially offset by
North America

–Transmission sales up 12%, driven by
improved North American pressure-pumping
shipments

–Marine sales down 12%, driven by lower
shipments to commercial marine
transmission customers, primarily in Asia

•$4.0 million profit, or $0.36 per diluted
share, up from $0.11 in Q1 FY ‘14

–Q1 of FY ‘14 included a $1.1 million, or
$0.10 per diluted share, restructuring charge
at Company’s Belgian operation

–Gross margin increased 340 basis points to
34.5% driven by a more profitable product
mix, improved absorption and lower pension
expense

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November 6, 2014

Sales

-15%

-3%

$81

$69

$66

$64

-2%

$ millions

Net Earnings*

$9.6

$1.3

$1.3

$4.0

Twin Disc, Incorporated

Marine & Propulsion
Systems

•Commercial Marine:

–Achieved record sales in fiscal 2013, driven by strong
demand in Asia and the US Gulf Coast

–Fiscal 2014 moderated somewhat, continuing into Q1

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

–Long term growth in Asia, Latin and North America
expected to continue

•Patrol Boat:

–Experienced recent growth as demand for coastal
security applications has increased globally

–Expect long term growth to continue

•Pleasure Craft:

–Market remains at historic lows, some market share
gains recently

–EJS™ introduced and Cat® Three60 available

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

–Continue to emphasize technological differentiation

November 6, 2014

Sales Mix %:Q1 FY15FY14FY12

Twin Disc, Incorporated

Land-Based ProductsTransmission Systems

•Pressure Pumping:

–Achieved record units sales in fiscal ‘12

–Asian market, driven by China, has partially offset
North American softening through fiscal ‘14

–Order activity started to build in second half of
fiscal 2014 in the North American market

–Started to ship units to Latin America in fiscal 2014

–Global markets continue to represent opportunity
for above average growth in the long run

•Airport Rescue and Fire Fighting (ARFF) &
Military:

–Markets to remain stable with potential for modest
growth

–Continue to develop next generation transmission
system for ARFF

November 6, 2014

Sales Mix %:Q1 FY15FY14FY12

Twin Disc, Incorporated

November 6, 2014

Land-Based ProductsPressure Pumping

U.S. dry natural gas production by source,1990-2040
(trillion cubic feet)

Source: EIA, Annual Energy
Outlook 2013 (Early
Release Overview).

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U.S. domestic crude oil production by source, 1990-2040
(million barrels per day)

Source: EIA, Annual Energy
Outlook 2013 (Early
Release Overview).

Twin Disc, Incorporated

Land-Based ProductsIndustrial Products

•North America Energy Related:

–Demand will grow as North American oil & gas
market strengthens

•Irrigation & Pumping Applications:

–PTO and industrial gearbox lines drove growth

–Solid reputation for quality, global service and new
product development will continue to produce growth
opportunities in the future

•International Markets:

–Opened a new facility in India, south of Chennai,
expect to expand our penetration in the region in the
coming years

–European markets remain sluggish

–Vigorous demand in Asia, Australia, Africa and
Middle East support optimism for the near term and
beyond

November 6, 2014

Sales Mix %:Q1 FY15FY14FY12

Twin Disc, Incorporated

FY2014

FY2008

•Highlights:

–Nearly 59% of sales were outside the USA
in fiscal 2014

–Sales to Canada were nearly 13% in 2012
(oil & gas driven), down to 4% in 2014

–In 2012, Asia surpassed Europe as 2nd
largest end market

–Sales to China have tripled over last 3
years, represented 13% of sales in FY14

–CAGR from 2006 to 2014:
Asia = 12%, China = 40%

•Outlook:

–Continue to focus on BRIC as largest
growth opportunity

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Peak of mega
yacht market

sales

November 6, 2014

Twin Disc, Incorporated

Managing Our Cost Structure

CAPEX

•Investing in core competencies

•Expanding presence in low cost manufacturing locations

•Over $100 million over past 10 yrs

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November 6, 2014

Twin Disc, Incorporated

Sourcing Offices

Managing Our Cost Structure

Low Cost

Lower Cost

Corporate HQ/Mfg

Mfg locations

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November 6, 2014

Twin Disc, Incorporated

•Technology

–Oil & Gas

•8500 Series

–ARFF

•“Pump & Roll”

–Military

•“Legacy” Contracts

What Differentiates Us?

–Marine

•Patented QuickShift®

•Dynamic Positioning/DPII

•Rolla CFD

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November 6, 2014

Twin Disc, Incorporated

What Differentiates Us?

•96+ 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

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November 6, 2014

#

Twin Disc, Incorporated

Looking Ahead

November 6, 2014

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Twin Disc, Incorporated

FY05

FY06

FY07

$ millions

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

FY08

FY09

FY11

FY10

FY12

FY13

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November 6, 2014

FY14

FY15

Twin Disc, Incorporated

•Expect fiscal 2015 results to improve over fiscal 2014

•North American Oil & Gas landscape causes near term
outlook to be cautiously optimistic

–Experienced increased order activity in the 2nd half of fiscal
2014, which resulted in improved shipments in the 1st fiscal
quarter

–Recent decrease in oil price/strengthening dollar causing a
pause in order activity

–International oil and gas markets, particularly China, offer
significant long term growth opportunities

•Marine markets will remain mixed

–Commercial marine markets remain robust and another good
year is expected, although near-term outlook for Asia is cautious

–Global mega yacht market will remain depressed, however
opportunity exists for select market share gains

–Patrol Boat market will continue to expand in the long-term as
coastal security remains a focus around the World

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November 6, 2014

Fiscal 2015 & Beyond Outlook

Twin Disc, Incorporated

•ARFF, Military and North American industrial markets
are expected to remain stable

•Global markets will remain mixed

–European markets will remain challenged in the near term

–Asia continues to offer significant opportunities for above
average growth rates, although FY15 expected to moderate from
recent record levels

–North American pressure pumping market has been slow to
rebound; however, recent order inquiry/activity provides near
term optimism

•The Company is well-positioned to grow as end markets
recover and remains focused on providing innovative
and differentiating product and market development
projects

•Continue to focus on strategic product line and
technology expansion opportunities (organic and
acquisitive)

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November 6, 2014

Fiscal 2015 & Beyond Outlook

Twin Disc, Incorporated

Appendices

November 6, 2014

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Twin Disc, Incorporated

Corporate Profile - Market Diversity

Pleasure Craft Market:

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

•Products:Transmissions,
Arneson Surface Drives,
Propellers, Steering/Thruster/Trim
Systems, Controls, EJS

•Channels: Engine OEMs &
dealers, & boat builders

•Customers: CAT, Cummins,
MAN, MTU, Volvo / Azimut,
Viking, Hatteras, Ferretti,
Maritimo, Palmer Johnson,
Riviera, Sanlorenzo, Sunseeker

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

Appendix I

November 6, 2014

Twin Disc, Incorporated

Corporate Profile - Market Diversity

Work Boat Market:

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

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

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

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

•Competition: ZF, Reintjes /
Kamewa, Hamilton

Appendix II

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November 6, 2014

Twin Disc, Incorporated

Corporate Profile - Market Diversity

Patrol Boat Market:

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

•Products:Transmissions,
Arneson Surface Drives,
Propellers, Steering/Thruster/Trim
Systems, Controls, EJS

•Channels: Engine OEMs &
dealers, Government agencies &
boat builders

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

•Competition: ZF / Kamewa /
Veem

Appendix III

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November 6, 2014

Twin Disc, Incorporated

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 successful “packaging” more marine products

• Increasing content and value on each vessel

• Working directly with the shipyards

• Industry expert on vessel performance and handling

Appendix IV

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November 6, 2014

Twin Disc, Incorporated

Corporate Profile - Market Diversity

Industrial Products:

•Target Market:Heavy duty
industrial disconnect applications

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

•Channels:Distribution & OEMs

•Customers: Bandit, Morbark,
Peterson Pacific / CAT, Cummins
& engine dealers

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

Appendix V

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November 6, 2014

Twin Disc, Incorporated

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. &
Distribution

•Customers: BAE, Rosenbauer,
Oshkosh, Tatra / BJ Services,
FTSI, CalFrac, NOV, MG Bryan,
Trican, Tai’an, Yantai Jereh, & SJ
Petro

•Competitors: Allison, Cat, ZF

Appendix VI

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November 6, 2014

Twin Disc, Incorporated

Frac Rig Diagram

Engine

Transmission

Pump

Appendix VII

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November 6, 2014

Twin Disc, Incorporated

$ millions

% sales

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

Appendix VIII

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November 6, 2014

Twin Disc, Incorporated

Non-GAAP Financial Disclosures

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

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November 6, 2014

Twin Disc, Incorporated

Reconciliation of Net Earnings to EBITDA

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

Appendix X

NOTE:2011 and 2012 fiscal year figures have been revised.See Footnote A in the Company’s Form 10K for the period ending June 30, 2013.

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November 6, 2014

Twin Disc, Incorporated

Reconciliation of TTM Data to Reported Quarterly Figures

Appendix XI

NOTE:2011 and 2012 fiscal year figures have been revised.See Footnote A in the Company’s Form 10K for the period ending June 30, 2013.

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November 6, 2014

Twin Disc, Incorporated

November 6, 2014

Fiscal Year Condensed Consolidated Statements of Operations

NOTE:2011 and 2012 fiscal year figures have been revised.See Footnote A in the Company’s Form 10K for the period ending
June 30, 2013.

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Appendix XII

Twin Disc, Incorporated

November 6, 2014

$317

$310

$332

$296

Historical Net Sales by Segment

$228

$356

32

$285

Appendix XIII

$264

Twin Disc, Incorporated

November 6, 2014

Historical Net Earnings by Segment (before Corporate Expense)

NOTE:2011 and 2012 fiscal year figures have been revised.See Footnote A in the Company’s Form 10K for the period ending
June 30, 2013.

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Appendix XIV

Twin Disc, Incorporated

1st Fiscal Quarter: Condensed Consolidated Statements of Operations

Appendix XV

NOTE:2011 and 2012 fiscal year figures have been revised.See Footnote A in the Company’s Form 10K for the period ending
June 30, 2013.

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November 6, 2014

Twin Disc, Incorporated

35

$ millions

% sales

Operating Cash Flows - Fiscal Year

November 6, 2014

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

Appendix XVI

Twin Disc, Incorporated

Express Joystick System® in Action

Go to http://www.twindisc.com/en/marine/marine-products/express-joystick-system
to see the new revolutionary Twin Disc Express Joystick System® in action.

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November 6, 2014