Document And Entity Information
Document And Entity Information - shares | 6 Months Ended | |
Dec. 28, 2018 | Jan. 31, 2019 | |
Document Information [Line Items] | ||
Entity Registrant Name | TWIN DISC INC | |
Entity Central Index Key | 100,378 | |
Trading Symbol | twin | |
Current Fiscal Year End Date | --06-17 | |
Entity Filer Category | Accelerated Filer | |
Entity Current Reporting Status | Yes | |
Entity Emerging Growth Company | false | |
Entity Small Business | true | |
Entity Common Stock, Shares Outstanding (in shares) | 13,099,512 | |
Document Type | 10-Q | |
Document Period End Date | Dec. 28, 2018 | |
Document Fiscal Year Focus | 2,019 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Current Period Unaudited) - USD ($) $ in Thousands | Dec. 28, 2018 | Jun. 30, 2018 |
Current assets: | ||
Cash | $ 18,542 | $ 15,171 |
Trade accounts receivable, net | 47,890 | 45,422 |
Inventories | 130,234 | 84,001 |
Prepaid expenses | 7,314 | 8,423 |
Other | 8,320 | 6,252 |
Total current assets | 212,300 | 159,269 |
Property, plant and equipment, net | 70,309 | 55,467 |
Goodwill, net | 27,829 | 2,692 |
Intangible assets, net | 22,362 | 1,906 |
Deferred income taxes | 13,907 | 18,056 |
Other assets | 4,123 | 3,850 |
Total assets | 350,830 | 241,240 |
Current liabilities: | ||
Accounts payable | 35,123 | 29,368 |
Accrued liabilities | 42,266 | 32,976 |
Total current liabilities | 77,389 | 62,344 |
Long-term debt | 46,686 | 4,824 |
Lease obligations | 16,467 | 6,527 |
Accrued retirement benefits | 19,552 | 21,068 |
Deferred income taxes | 7,053 | 1,203 |
Other long-term liabilities | 1,839 | 1,658 |
Total liabilities | 168,986 | 97,624 |
Commitments and contingencies (Note F) | ||
Twin Disc shareholders' equity: | ||
Preferred shares authorized: 200,000; issued: none; no par value | 0 | 0 |
Common shares authorized: 30,000,000; issued: 14,632,802 and 13,099,468, respectively; no par value | 44,137 | 11,570 |
Retained earnings | 192,734 | 178,896 |
Accumulated other comprehensive loss | (32,055) | (23,792) |
Equity before treasury stock | 204,816 | 166,674 |
Less treasury stock, at cost (1,533,290 and 1,545,783 shares, respectively) | 23,485 | 23,677 |
Total Twin Disc shareholders' equity | 181,331 | 142,997 |
Noncontrolling interest | 513 | 619 |
Total equity | 181,844 | 143,616 |
Total liabilities and equity | $ 350,830 | $ 241,240 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - $ / shares $ / shares in Thousands | Dec. 28, 2018 | Jun. 30, 2018 |
Preferred Shares, Authorized (in shares) | 200,000 | 200,000 |
Preferred Shares, Issued (in shares) | 0 | 0 |
Preferred Shares, No Par Value (in dollars per share) | $ 0 | $ 0 |
Common Shares, Authorized (in shares) | 30,000,000 | 30,000,000 |
Common Shares, Issued (in shares) | 14,632,802 | 13,099,468 |
Common Shares, No Par Value (in dollars per share) | $ 0 | $ 0 |
Treasury Stock, Shares (in shares) | 1,533,290 | 1,545,783 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Income (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 28, 2018 | Dec. 29, 2017 | Dec. 28, 2018 | Dec. 29, 2017 | |
Net Sales | $ 78,107 | $ 56,546 | $ 152,796 | $ 101,611 |
Cost of goods sold | 52,019 | 38,323 | 102,723 | 69,396 |
Gross profit | 26,088 | 18,223 | 50,073 | 32,215 |
Marketing, engineering and administrative expenses | 18,909 | 15,070 | 37,894 | 28,464 |
Restructuring expenses | 434 | 831 | 607 | 2,049 |
Income from operations | 6,745 | 2,322 | 11,572 | 1,702 |
Interest expense | 417 | 83 | 1,134 | 147 |
Other expense (income), net | 798 | 364 | 1,118 | 934 |
Non-operating income (expense) | 1,215 | 447 | 2,252 | 1,081 |
Income before income taxes and noncontrolling interest | 5,530 | 1,875 | 9,320 | 621 |
Income tax expense | 1,451 | 5,925 | 2,338 | 1,267 |
Net income (loss) | 4,079 | (4,050) | 6,982 | (646) |
Less: Net earnings attributable to noncontrolling interest, net of tax | (6) | (63) | (47) | (76) |
Net income (loss) attributable to Twin Disc | $ 4,073 | $ (4,113) | $ 6,935 | $ (722) |
Income (loss) per share data: | ||||
Basic income (loss) per share attributable to Twin Disc common shareholders (in dollars per share) | $ 0.31 | $ (0.36) | $ 0.56 | $ (0.06) |
Diluted income (loss) per share attributable to Twin Disc common shareholders (in dollars per share) | $ 0.31 | $ (0.36) | $ 0.56 | $ (0.06) |
Weighted average shares outstanding data: | ||||
Basic shares outstanding (in shares) | 12,909 | 11,297 | 12,233 | 11,278 |
Diluted shares outstanding (in shares) | 12,997 | 11,297 | 12,304 | 11,278 |
Comprehensive income (loss): | ||||
Net income (loss) | $ 4,079 | $ (4,050) | $ 6,982 | $ (646) |
Benefit plan adjustments, net of income taxes of $146, $674, $292 and $952, respectively | 478 | 1,734 | 949 | 2,208 |
Translation adjustment during the quarter | (1,786) | 488 | (2,347) | 3,029 |
Comprehensive income (loss) | 2,771 | (1,828) | 5,584 | 4,591 |
Less: Comprehensive loss (income) attributable to noncontrolling interest | 7 | (62) | (9) | (69) |
Comprehensive income (loss) attributable to Twin Disc | $ 2,778 | $ (1,890) | $ 5,575 | $ 4,522 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Operations and Comprehensive Income (Unaudited) (Parentheticals) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 28, 2018 | Dec. 29, 2017 | Dec. 28, 2018 | Dec. 29, 2017 | |
Benefit plan adjustments, tax | $ 146 | $ 674 | $ 292 | $ 952 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Dec. 28, 2018 | Dec. 29, 2017 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 6,982 | $ (646) |
Adjustments to reconcile net income (loss) to net cash (used) provided by operating activities, net of acquired assets: | ||
Depreciation and amortization | 4,510 | 3,263 |
Amortization of inventory fair value step-up | 2,173 | |
Restructuring expenses | 162 | |
Provision for deferred income taxes | 2,555 | 1,613 |
Stock compensation expense and other non-cash changes, net | 1,506 | 1,064 |
Net change in operating assets and liabilities | (21,505) | (1,644) |
Net cash (used) provided by operating activities | (3,779) | 3,812 |
Cash flows from investing activities: | ||
Acquisition of Veth Propulsion, less cash acquired | (59,651) | |
Acquisitions of fixed assets | (6,676) | (3,013) |
Proceeds from sale of fixed assets | 63 | 79 |
Other, net | (129) | (129) |
Net cash used by investing activities | (66,393) | (3,063) |
Cash flows from financing activities: | ||
Proceeds from issuance of common stock, net | 32,210 | |
Borrowings under long-term debt agreement | 35,000 | |
Borrowings under revolving loan agreement | 93,675 | 35,315 |
Proceeds from exercise of stock options | 36 | |
Repayments under revolving loan agreement | (62,326) | (36,957) |
Repayments of long-term borrowings | (24,230) | |
Dividends paid to noncontrolling interest | (115) | (172) |
Payments of withholding taxes on stock compensation | (926) | (400) |
Net cash provided (used) by financing activities | 73,324 | (2,214) |
Effect of exchange rate changes on cash | 219 | 864 |
Net change in cash | 3,371 | (601) |
Cash: | ||
Beginning of period | 15,171 | 16,367 |
End of period | $ 18,542 | $ 15,766 |
Note A - Basis of Presentation
Note A - Basis of Presentation | 6 Months Ended |
Dec. 28, 2018 | |
Notes to Financial Statements | |
Significant Accounting Policies [Text Block] | A. Basis of Presentation The unaudited condensed consolidated financial statements have been prepared by Twin Disc, Incorporated (the “Company”) pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and, in the opinion of the Company, include all adjustments, consisting only of normal recurring items, necessary for a fair statement of results for each period. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such SEC rules and regulations. The Company believes that the disclosures made are adequate to make the information presented not 10 June 30, 2018. not The unaudited condensed consolidated financial statements and information included in this Quarterly Report on Form 10 10 July 2, 2018 December 28, 2018. 10 not Recently Adopted Accounting Standards a. In May 2014, 2014 09 July 1, 2018, not not July 1, 2018. The Company determined that deferral of revenue is appropriate for certain agreements where the performance of services after product delivery is required. Such services primarily pertain to technical commissioning services by its distribution entities in its marine business, whereby the Company’s technicians calibrate the controls and transmission to ensure proper performance for the customer’s specific application. This service helps identify issues with the ship's design or performance that need to be remediated by the ship builder or other component suppliers prior to the ship being officially accepted into service by the ship buyer. The cumulative effect adjustment of adopting the new standard is not b. In February 2016, 2016 02 12 July 1, 2018, 2014 09, For operating leases in which the Company is a lessee, the Company concluded that all existing operating leases under the old guidance continue to be classified as operating leases under the new guidance, and all existing capital leases under the old guidance are classified as finance leases under the new guidance. The Company excluded any lease contracts with terms of twelve The following table presents the effect of the adoption of ASU 2016 02 June 30, 2018: June 30, 2018 Adoption June 30, 2018 As Reported Impact Restated Property, plant and equipment, net $ 48,940 $ 6,527 $ 55,467 Lease obligations - 6,527 6,527 The adoption of ASU 2014 09 2016 02 not two December 29, 2017, two December 29, 2017. c. In March 2017, 2017 07 July 1, 2018 The following table presents the effect of the adoption of ASU 2017 07 two December 29, 2017: For the Quarter Ended For the Two Quarters Ended December 29, 2017 Adoption December 29, 2017 December 29, 2017 Adoption December 29, 2017 As Reported Impact Restated As Reported Impact Restated Cost of goods sold $ 38,420 $ (97 ) $ 38,323 $ 69,590 $ (194 ) $ 69,396 Gross profit 18,126 97 18,223 32,021 194 32,215 Marketing, engineering and administrative expenses 15,268 (198 ) 15,070 28,936 (472 ) 28,464 Income from operations 2,027 295 2,322 1,036 666 1,702 Other expense (income), net 69 295 364 268 666 934 d. In February 2018, 2018 02 July 1, 2018 $6,903 e. In October 2016, 2016 16 July 1, 2018. not f. In August 2016, 2016 15 eight July 1, 2018. not g. In August 2018, No. 33 10532, X 3 04 3 04 second 2019. not New Accounting Releases In August 2018, 2018 13 820, December 15, 2019 ( 2021 In August 2018, 2018 14 December 15, 2020 ( 2021 Special Note Regarding Smaller Reporting Company Status In June 2018, 33 10513; 34 83550, 12b 2 1934, 1 $250 2 $100 $700 no September 10, 2018, first 2019. second 2019. may not may |
Note B - Acquisition of Veth Pr
Note B - Acquisition of Veth Propulsion Holding BV | 6 Months Ended |
Dec. 28, 2018 | |
Notes to Financial Statements | |
Business Combination Disclosure [Text Block] | B. Acquisition of Veth Propulsion Holding BV On July 2, 2018, 100% June 13, 2018. Under the terms of the Purchase Agreement, the Company paid an aggregate of approximately $60,729 $3,800. January 1, 2018 December 31, 2018 April 2019. The Company financed the payment of the cash consideration through borrowings of $60,729 June 29, 2018 Consideration Transferred The following table summarizes the consideration transferred at the acquisition date. This amount is subject to a final determination of a working capital adjustment and earn-out, which will be settled prior to the end of the measurement period ending July 1, 2019. Cash (a) $ 60,729 Fair value of contingent consideration (b) 2,920 Total $ 63,649 a) In the statement of cash flows, the cash used in the acquisition of Veth Propulsion in the amount of $59,651 $1,078 b) This pertains to the fair value of the earn-out, which was estimated based on a probability-weighted approach. Fair Value Estimate of Assets Acquired and Liabilities Assumed The Company is continuing its review of the fair value estimate of assets acquired and liabilities assumed during the measurement period, which will conclude as soon as the necessary information regarding the facts and circumstances that existed as of the acquisition date is obtained, or otherwise not not one Upon the final determination of the fair value of assets acquired and liabilities assumed, the excess of the purchase price over such fair values is allocated to goodwill. The final determination of the purchase price, fair values and resulting goodwill may The following summarizes the preliminary estimate of fair value of the assets acquired and liabilities assumed at the acquisition date. Some of these amounts reflect updated values from those previously reported as of September 28, 2018, Cash, including restricted cash $ 1,078 (a) Accounts receivable and other current assets 9,999 (b) Inventories 27,273 (c) Property, plant and equipment 2,641 (d) Intangibles 22,000 (e) Other assets 258 Accounts payable and customer deposits and other current liabilities (18,402 ) Deferred tax liability (6,877 ) (f) Total net assets acquired 37,970 Goodwill 25,679 (g) Total consideration $ 63,649 The following information provides further details about the estimated net step-up in fair value and/or the estimated fair value at the acquisition date for some key balance sheet items. (a) Included in cash is restricted cash in the amount of $685. not December 28, 2018 not (b) Accounts receivable represents contractual amounts receivable from customers less an allowance for doubtful accounts. This amount approximates fair value. (c) Inventories consist of: Raw materials $ 12,804 Projects work in progress at fair value 14,469 Inventories at fair value 27,273 Inventories at book value 22,871 Step-up $ 4,402 As of the effective date of the acquisition, inventory is required to be measured at fair value. Raw materials are typically utilized in operations within one 70% $4,402. (d) The fair value of property, plant and equipment is estimated at $2,641. 2 13 (e) Intangible assets consist of: Estimated fair value Estimated average useful lives Annual amortization Customer relationships $ 12,300 12 $ 1,025 Technology and know-how 8,000 7 1,143 Tradename 1,700 10 170 Total $ 22,000 $ 2,338 The preliminary fair values were determined primarily using an income method, which utilizes financial forecasts of expected future cash flows. Some of the more significant assumptions used in the development of intangible asset values include: the amount and timing of projected future cash flows, the discount rate selected to measure the risks inherent in future cash flows, and the assessment of the asset’s life cycle and competitive trends impacting the asset, as well as other factors. (f) This represents the net deferred tax liability associated with the fair value of assets acquired and liabilities assumed. (g) The Company is not The fair values presented above are preliminary until the final purchase price consideration is determined and the Company completes its work with the use of a third may As part of the acquisition, the Company entered into a fifteen $1,249, Summary Financial Information The following table presents financial information for Veth Propulsion that is included in the Company’s consolidated statement of operations for the quarter and two December 28, 2018: Quarter Ended Two Quarters Ended December 28, 2018 December 28, 2018 Net sales $ 14,083 $ 27,436 Gross profit (a) 3,706 5,892 Operating income (loss) (b) 681 (40 ) Net income (loss) attributable to Twin Disc 376 (575 ) (a) Gross profit includes the non-recurring charge for the step-up of inventories acquired of $1,002 $2,173 two December 28, 2018, (b) In addition to (a), operating income (loss) includes the depreciation of property, plant and equipment and amortization of intangible assets acquired of $647 $1,268 two December 28, 2018, one $256 $460 two December 28, 2018, The following table presents unaudited supplemental pro forma information as if the acquisition of Veth Propulsion had occurred on July 1, 2017. Quarter Ended Two Quarters Ended December 29, 2017 December 29, 2017 Net sales $ 71,191 $ 130,902 Gross profit (a) 21,420 38,609 Net loss attributable to Twin Disc (b) (4,790 ) (2,075 ) Basic loss per share attributable to Twin Disc common shareholders $ (0.42 ) $ (0.18 ) Diluted loss per share attributable to Twin Disc common shareholders $ (0.42 ) $ (0.18 ) Weighted average number of common shares outstanding: Basic 11,297 11,278 Diluted 11,297 11,278 (a) Gross profit includes the amortization of the step-up of inventories of $1,179 $2,358 two December 29, 2017, (b) In addition to (a), this includes the amortization of intangible assets acquired and interest expense on borrowings under the Credit Agreement net of other expenses, amounting to $1,136 $2,271, two December 29, 2017, |
Note C - Revenue Recognition
Note C - Revenue Recognition | 6 Months Ended |
Dec. 28, 2018 | |
Notes to Financial Statements | |
Revenue from Contract with Customer [Text Block] | C. Revenue Recognition Revenue from contracts with customers is recognized using a five 1 2 3 4 5 not not no The Company designs, manufactures and sells marine and heavy duty off highway power transmission equipment. Products offered include: marine transmissions, azimuth drives, surface drives, propellers and boat management systems as well as power-shift transmissions, hydraulic torque converters, power take-offs, industrial clutches and controls systems. The Company sells its products to customers primarily in the commercial, pleasure craft, and military marine markets as well as in the energy and natural resources, government and industrial markets. The Company's worldwide sales to both domestic and foreign customers are transacted through a direct sales force and a distributor network. Identify contract with customer: The Company gathered customer contracts and representative customer purchase orders of its various locations. The Company’s customers consist of distributors and direct end-users. With regard to distributors, the Company generally has written distribution agreements which describe the terms of the distribution arrangement, such as the product range, the sales territory, product pricing, sales support, payment and returns policy, etc. Customer contracts are generally in the form of acknowledged purchase orders. Services to be rendered, as part of the delivery of those products, are also generally specified. Such services include installation reviews and technical commissioning. Performance obligations: The Company’s performance obligation as it relates to the delivery of goods is straightforward; the recognition of revenue is generally driven by shipment date and the terms of sale. As it relates to the Company’s service obligations, the Company determined that installation reviews, shift development and technical commissioning are separate and distinct performance obligations. Transaction price: The Company considers the invoice price as the transaction price. Allocation of transaction price: The Company determined that the most relevant allocation method for its service obligations is to apply the expected cost plus appropriate margin. This is the Company’s current practice of billing for repairs, overhaul, and other product service related time incurred by its technicians. Recognize revenue: Revenue is recognized upon transfer of control of the products to the customer. For installation review, shift development, and technical commissioning services, revenue is recognized upon completion of the service. Disaggregated revenue: The following table presents details deemed most relevant to the users of the financial statements for the quarter and two December 28, 2018. Net sales by product group for the quarter ended December 28, 2018 Elimination of Manufacturing Distribution Intercompany Sales Total Industrial $ 8,253 $ 2,580 $ (1,717 ) $ 9,116 Land-based transmissions 30,309 6,846 (7,377 ) 29,778 Marine and propulsion systems 32,412 16,307 (10,863 ) 37,856 Other 12 1,357 (12 ) 1,357 Total $ 70,986 $ 27,090 $ (19,969 ) $ 78,107 Net sales by product group for the two December 28, 2018 Elimination of Manufacturing Distribution Intercompany Sales Total Industrial $ 14,734 $ 3,977 $ (2,549 ) $ 16,162 Land-based transmissions 59,742 12,456 (12,784 ) 59,414 Marine and propulsion systems 65,388 30,464 (21,721 ) 74,131 Other 35 3,113 (59 ) 3,089 Total $ 139,899 $ 50,010 $ (37,113 ) $ 152,796 Contract assets /liabiliies : There are no December 28, 2018. |
Note D - Inventories
Note D - Inventories | 6 Months Ended |
Dec. 28, 2018 | |
Notes to Financial Statements | |
Inventory Disclosure [Text Block] | D . Inventor ies The major classes of inventories were as follows: December 28, 2018 June 30, 2018 Inventories: Finished parts $ 56,796 $ 49,332 Work in process 26,723 13,183 Raw materials 46,715 21,486 $ 130,234 $ 84,001 |
Note E - Warranty
Note E - Warranty | 6 Months Ended |
Dec. 28, 2018 | |
Notes to Financial Statements | |
Product Warranty Disclosure [Text Block] | E . Warranty The Company engages in extensive product quality programs and processes, including actively monitoring and evaluating the quality of its suppliers. However, its warranty obligation is affected by product failure rates, the number of units affected by the failure and the expense involved in satisfactorily addressing the situation. The warranty reserve is established based on our best estimate of the amounts necessary to settle future and existing claims on products sold as of the balance sheet date. When evaluating the adequacy of the reserve for warranty costs, management takes into consideration the term of the warranty coverage, historical claim rates and costs of repair, knowledge of the type and volume of new products and economic trends. While we believe the warranty reserve is adequate and that the judgment applied is appropriate, such amounts estimated to be due and payable in the future could differ materially from what actually transpires. The following is a listing of the activity in the warranty reserve for the quarter and two December 28, 2018 December 29, 2017: For the Quarter Ended For the Two Quarters Ended December 28, 2018 December 29, 2017 December 28, 2018 December 29, 2017 Reserve balance, beginning of period $ 4,667 $ 2,326 $ 4,407 $ 2,062 Current period expense and adjustments 128 723 857 1,381 Payments or credits to customers (926 ) (589 ) (1,946 ) (1,022 ) Acquisition - - 557 - Translation (26 ) 7 (32 ) 46 Reserve balance, end of period $ 3,843 $ 2,467 $ 3,843 $ 2,467 The current portion of the warranty accrual ( $3,309 $2,032 December 28, 2018 December 29, 2017, $534 $435 December 28, 2018 December 29, 2017, |
Note F - Contingencies
Note F - Contingencies | 6 Months Ended |
Dec. 28, 2018 | |
Notes to Financial Statements | |
Commitments and Contingencies Disclosure [Text Block] | F . Contingencies The Company is involved in litigation of which the ultimate outcome and liability to the Company, if any, is not not |
Note G - Business Segments
Note G - Business Segments | 6 Months Ended |
Dec. 28, 2018 | |
Notes to Financial Statements | |
Segment Reporting Disclosure [Text Block] | G . Business Segments The Company and its subsidiaries are engaged in the manufacture and sale of marine and heavy-duty off-highway power transmission equipment. Principal products include marine transmissions, azimuth drives, surface drives, propellers and boat management systems, as well as power-shift transmissions, hydraulic torque converters, power take-offs, industrial clutches and controls systems. The Company sells to both domestic and foreign customers in a variety of market areas, principally pleasure craft, commercial and military marine markets, as well as in the energy and natural resources, government and industrial markets. The Company has two Information about the Company’s segments is summarized as follows: For the Quarter Ended For the Two Quarters Ended December 28, 2018 December 29, 2017 December 28, 2018 December 29, 2017 Net sales Manufacturing segment sales $ 70,986 $ 48,580 $ 139,899 $ 88,453 Distribution segment sales 27,090 21,336 50,010 38,998 Inter/Intra segment elimination – manufacturing (14,931 ) (9,489 ) (29,681 ) (19,821 ) Inter/Intra segment elimination – distribution (5,038 ) (3,881 ) (7,432 ) (6,019 ) $ 78,107 $ 56,546 $ 152,796 $ 101,611 Net income (loss) attributable to Twin Disc Manufacturing segment net income $ 7,924 $ 123 $ 15,159 $ 5,190 Distribution segment net income 569 387 1,434 1,056 Corporate and eliminations (4,420 ) (4,623 ) (9,658 ) (6,968 ) $ 4,073 $ (4,113 ) $ 6,935 $ (722 ) Assets December 28, 2018 June 30, 2018 Manufacturing segment assets $ 380,928 $ 266,417 Distribution segment assets 59,382 52,230 Corporate assets and elimination of intercompany assets (89,480 ) (77,407 ) $ 350,830 $ 241,240 |
Note H - Stock-based Compensati
Note H - Stock-based Compensation | 6 Months Ended |
Dec. 28, 2018 | |
Notes to Financial Statements | |
Disclosure of Compensation Related Costs, Share-based Payments [Text Block] | H . Stock-Based Compensation Performance Stock Awards (“PSA”) During the first 2019 2018, 42.3 54.9 2019 three June 30, 2021. 63.4. The fiscal 2018 three June 30, 2020. 69.2. There were 188.0 224.9 December 28, 2018 December 29, 2017, $242 $121 December 28, 2018 December 29, 2017, $788 $136 two December 28, 2018 December 29, 2017, December 28, 2018 $15.02. December 28, 2018, $1,522 2019, 2018 2017 December 28, 2018 September 29, 2017 $0 Restricted Stock Awards (“RS”) The Company has unvested RS awards outstanding that will vest if certain service conditions are fulfilled. The fair value of the RS grants is recorded as compensation expense over the vesting period, which is generally 1 3 first 2019 2018, 35.6 85.3 185.3 272.4 December 28, 2018 December 29, 2017, 2.8 two December 28, 2018. no two December 29, 2017. $266 $464 December 28, 2018 December 29, 2017, $516 $927 two December 28, 2018 December 29, 2017, December 28, 2018 December 29, 2017 $2,102 $1,758, December 28, 2018, $1,217 three Restricted Stock Unit Awards (“RS U ”) Under the 2018 three first 2019, 38.0 38.0 December 28, 2018. $82 December 28, 2018. $136 two December 28, 2018. December 28, 2018 $25.77. December 28, 2018, $842 three |
Note I - Pension and Other Post
Note I - Pension and Other Postretirement Benefit Plans | 6 Months Ended |
Dec. 28, 2018 | |
Notes to Financial Statements | |
Pension and Other Postretirement Benefits Disclosure [Text Block] | I . Pension and Other Postretirement Benefit Plans The Company has non-contributory, qualified defined benefit plans covering substantially all domestic employees hired prior to October 1, 2003 For the Quarter Ended For the Two Quarters Ended December 28, 2018 December 29, 2017 December 28, 2018 December 29, 2017 Pension Benefits: Service cost $ 251 $ 241 $ 497 $ 503 Interest cost 1,083 1,062 2,175 2,136 Expected return on plan assets (1,333 ) (1,516 ) (2,664 ) (3,041 ) Amortization of transition obligation 9 9 17 18 Amortization of prior service cost 1 1 2 2 Amortization of actuarial net loss 678 759 1,355 1,518 Net periodic benefit cost $ 689 $ 556 $ 1,382 $ 1,136 Postretirement Benefits: Service cost $ 5 $ 5 $ 9 $ 10 Interest cost 76 77 152 169 Amortization of actuarial net loss (69 ) (59 ) (137 ) (56 ) Net periodic benefit cost $ 12 $ 23 $ 24 $ 123 The Company expects to contribute approximately $2,382 2019. December 28, 2018, $1,429 The Company has reclassified $478 $146 December 28, 2018, $1,734 $674 December 29, 2017. $949 $292 two December 28, 2018, $2,208 $952 two December 29, 2017. |
Note J - Income Taxes
Note J - Income Taxes | 6 Months Ended |
Dec. 28, 2018 | |
Notes to Financial Statements | |
Income Tax Disclosure [Text Block] | J . Income Taxes On December 22, 2017, January 1, 2018; June 30, For the two December 28, 2018 December 29, 2017, 25.1% 204.0% $3,803 611.5%. $4,526, 727.9%. $431 69.3%. Within the calculation of the Company’s annual effective tax rate, the Company has used assumptions and estimates that may The permanent reduction to the U.S. federal corporate income tax rate from 35% 21% January 1, 2018. 2019 21%. The deemed repatriation transition tax is a tax on previously untaxed accumulated and current earnings and profits of certain foreign subsidiaries. To determine the amount of the transition tax, the Company calculated the amount of post- 1986 zero As no 2018 not 100% no no not not not may Under ASC Topic 740, December 22, 2017. December 29, 2017. 118 118 three 1 2 not 3 no 740 no one not 118 not one two December 28, 2018, 2019. The Company maintains valuation allowances when it is more likely than not not no Accounting policies for interim reporting require the Company to adjust its effective tax rate each quarter to be consistent with the estimated annual effective tax rate. Under this effective tax rate methodology, the Company applies an estimated annual income tax rate to its year-to-date ordinary earnings to derive its income tax provision each quarter. The Company has approximately $1,092 December 28, 2018, no two December 28, 2018. twelve Annually, the Company files income tax returns in various taxing jurisdictions inside and outside the United States. In general, the tax years that remain subject to examination are 2011 2018 2015. 2010 2013. 2019. |
Note K - Goodwill and Other Int
Note K - Goodwill and Other Intangibles | 6 Months Ended |
Dec. 28, 2018 | |
Notes to Financial Statements | |
Goodwill and Intangible Assets Disclosure [Text Block] | K . Goodwill and Other Intangibles Goodwill represents the excess of the consideration transferred net of the acquisition-date fair values of the identifiable assets acquired and the liabilities assumed. The Company reviews goodwill for impairment on a reporting unit basis annually as of the end of the fiscal year, and whenever events or circumstances (“triggering events”) indicate that the carrying value of goodwill may not The fair value of reporting units is primarily driven by projected growth rates and operating results under the income approach using a discounted cash flow model, which applies an appropriate market-participant discount rate, and consideration of other market approach data from guideline public companies. If declining actual operating results or future operating results become indicative that the fair value of the Company’s reporting units has declined below their carrying values, an interim goodwill impairment test may may On July 2, 2018, $25,679 $22,000 may As of December 28, 2018, Net Book Value Rollforward By Reporting Unit Gross Carrying Amount Accumulated Amortization / Impairment Net Book Value European Industrial European Propulsion Balance at June 30, 2018 $ 16,514 $ (13,822 ) $ 2,692 $ 2,692 $ - Acquisition 25,679 - 25,679 - 25,679 Translation adjustment (542 ) - (542 ) (75 ) (467 ) Balance at December 28, 2018 $ 41,651 $ (13,822 ) $ 27,829 $ 2,617 $ 25,212 For the quarter ended December 28, 2018, no not not December 28, 2018. June 30, 2019. As of December 28, 2018, Net Book Value Rollforward Net Book Value By Asset Type Gross Carrying Amount Accumulated Amortization / Impairment Net Book Value Trade Name Customer Relationships Technology Know-how Other Balance at June 30, 2018 $ 13,485 $ (11,781 ) $ 1,704 $ 1,288 $ - $ - $ 416 Acquisition 22,000 - 22,000 1,700 12,300 8,000 - Other additions 138 - 138 - - - 138 Amortization - (1,249 ) (1,249 ) (127 ) (506 ) (564 ) (52 ) Translation adjustment (431 ) - (431 ) (66 ) (221 ) (143 ) (1 ) Balance at December 28, 2018 $ 35,192 $ (13,030 ) $ 22,162 $ 2,795 $ 11,573 $ 7,293 $ 501 Other intangibles consist of certain amortizable acquisition costs, proprietary technology, computer software, licensing agreements and certain customer relationships. The weighted average remaining useful life of the intangible assets included in the table above is approximately 10 Intangible amortization expense was $583 $45 December 28, 2018, December 29, 2017, $1,249 $89 two December 28, 2018, December 29, 2017, 2019 five Fiscal Year 2019 $ 1,267 2020 2,534 2021 2,488 2022 2,446 2023 2,439 2024 2,409 The gross carrying amount of the Company’s intangible assets that have indefinite lives and are not December 28, 2018 June 30, 2018 $200 $202, |
Note L - Long-term Debt
Note L - Long-term Debt | 6 Months Ended |
Dec. 28, 2018 | |
Notes to Financial Statements | |
Debt Disclosure [Text Block] | L. Long-term Debt On June 29, 2018, “2016 not $35,000 may, not $50,000 Borrowings under the Credit Agreement are secured by substantially all of the Company’s personal property, including accounts receivable, inventory, machinery and equipment, and intellectual property, and the personal property of Mill-Log Equipment Co., Inc. (“Mill-Log”), a wholly-owned domestic subsidiary of the Company. The Company has also pledged 100% 65% 2016 On July 2, 2018, $60,729 $35,000 $25,729. On September 25, 2018, $32,310 Long-term debt at December 28, 2018 June 30, 2018 December 28, 2018 June 30, 2018 Revolving loans $ 35,815 $ 4,787 Term loan (due January 2020) 10,837 - Other 34 37 Total long-term debt $ 46,686 $ 4,824 During the two December 28, 2018, 5.20% 2.25% 4.45% As of December 28, 2018, $50,000, $14,185 The Company’s borrowings described above approximates fair value at December 28, 2018 June 30, 2018. 2 |
Note M - Shareholders' Equity
Note M - Shareholders' Equity | 6 Months Ended |
Dec. 28, 2018 | |
Notes to Financial Statements | |
Stockholders' Equity Note Disclosure [Text Block] | M. Shareholders’ Equity The Company completed the sale of 1,533.3 September 25, 2018, $22.50 $2,070 $220, $32,210 December 28, 2018. The Company, from time to time, makes open market purchases of its common stock under authorizations given to it by the Board of Directors, of which 315.0 December 28, 2018 not December 28, 2018 December 29, 2017. The following is a reconciliation of the Company’s equity balances for the first two 2019 2018: Twin Disc, Inc. Shareholders’ Equity Accumulated Other Non- Common Retained Comprehensive Treasury Controlling Total Stock Earnings Income (Loss) Stock Interest Equity Balance, June 30, 2018 $ 11,570 $ 178,896 $ (23,792 ) $ (23,677 ) $ 619 $ 143,616 Net income 2,862 41 2,903 Translation adjustments (536 ) (25 ) (561 ) Benefit plan adjustments, net of tax 471 471 Release stranded tax effects 6,903 (6,903 ) - Cash dividends (115 ) (115 ) Compensation expense 850 850 Common stock issued, net 32,210 32,210 Shares acquired, net (586 ) (328 ) (914 ) Balance, September 28, 2018 44,044 188,661 (30,760 ) (24,005 ) 520 178,460 Net income 4,073 6 4,079 Translation adjustments (1,773 ) (13 ) (1,786 ) Benefit plan adjustments, net of tax 478 478 Cash dividends - Compensation expense 590 590 Shares (acquired) issued, net (497 ) 520 23 Balance, December 28, 2018 $ 44,137 $ 192,734 $ (32,055 ) $ (23,485 ) $ 513 $ 181,844 Twin Disc, Inc. Shareholders’ Equity Accumulated Other Non- Common Retained Comprehensive Treasury Controlling Total Stock Earnings Income (Loss) Stock Interest Equity Balance, June 30, 2017 $ 10,429 $ 169,368 $ (32,671 ) $ (24,205 ) $ 646 $ 123,567 Net income 3,391 13 3,404 Translation adjustments 2,547 (6 ) 2,541 Benefit plan adjustments, net of tax 474 474 Cash dividends (172 ) (172 ) Compensation expense 479 479 Shares (acquired) issued, net (1,030 ) 817 (213 ) Balance, September 29, 2017 9,878 172,759 (29,650 ) (23,388 ) 481 130,080 Net (loss) income (4,113 ) 63 (4,050 ) Translation adjustments 489 (1 ) 488 Benefit plan adjustments, net of tax 1,734 1,734 Cash dividends - Compensation expense 584 584 Shares (acquired) issued, net (376 ) 189 (187 ) Balance, December 29, 2017 $ 10,086 $ 168,646 $ (27,427 ) $ (23,199 ) $ 543 $ 128,649 Reconciliations for the changes in accumulated other comprehensive income (loss), net of tax, by component for the quarters ended September 28, December 28, 2018, September 29, December 29, 2017 Translation Benefit Plan Adjustment Adjustment Balance at June 30, 2018 $ 7,085 $ (30,877 ) Translation adjustment during the quarter (536 ) - Release stranded tax effects - (6,903 ) Amounts reclassified from accumulated other comprehensive income - 471 Net current period other comprehensive loss (536 ) (6,432 ) Balance at September 28, 2018 6,549 (37,309 ) Translation adjustment during the quarter (1,773 ) - Amounts reclassified from accumulated other comprehensive income - 478 Net current period other comprehensive (loss) income (1,773 ) 478 Balance at December 28, 2018 $ 4,776 $ (36,831 ) Translation Benefit Plan Adjustment Adjustment Balance at June 30, 2017 $ 6,130 $ (38,801 ) Translation adjustment during the quarter 2,547 - Amounts reclassified from accumulated other comprehensive income - 474 Net current period other comprehensive income 2,547 474 Balance at September 29, 2017 8,677 (38,327 ) Translation adjustment during the quarter 489 - Other comprehensive income before reclassifications - 1,695 Amounts reclassified from accumulated other comprehensive income - 39 Net current period other comprehensive income 489 1,734 Balance at December 29, 2017 $ 9,166 $ (36,593 ) Reconciliation for the changes in benefit plan adjustments, net of tax for the quarter and two December 28, 2018 Amount Reclassified Amount Reclassified Quarter Ended Two Quarters Ended December 28, 2018 December 28, 2018 Changes in benefit plan items Actuarial losses $ 614 (a) $ 1,222 (a) Transition asset and prior service benefit 10 (a) 19 (a) Total amortization 624 1,241 Income taxes 146 292 Total reclassification net of tax $ 478 $ 949 Reconciliation for the changes in benefit plan adjustments, net of tax for the quarter and two December 29, 2017 Amount Reclassified Amount Reclassified Quarter Ended Two Quarters Ended December 29, 2017 December 29, 2017 Changes in benefit plan items Actuarial losses $ 703 (a) $ 1,445 (a) Transition asset and prior service benefit 10 (a) 20 (a) Total amortization 713 1,465 Other benefit plan adjustments (1,695 ) (1,695 ) Income taxes 674 952 Total reclassification net of tax $ 1,734 $ 2,208 (a) These accumulated other comprehensive income components are included in the computation of net periodic pension cost (see Note I "Pension and Other Postretirement Benefit Plans" for further details). |
Note N - Restructuring of Opera
Note N - Restructuring of Operations | 6 Months Ended |
Dec. 28, 2018 | |
Notes to Financial Statements | |
Restructuring, Impairment, and Other Activities Disclosure [Text Block] | N. Restructuring of Operations The Company has implemented various restructuring programs in response to unfavorable macroeconomic trends in certain of the Company’s markets since the fourth 2015. During the current year, the Company implemented continued actions to reduce personnel costs in its Belgian operations and reorganize for productivity in its European operations. These actions resulted in restructuring charges of $434 $607 two December 28, 2018, two December 29, 2017, $831 $2,049, Restructuring activities since June 2015 175 December 28, 2018 $9,880. The following is a rollforward of restructuring activity: Accrued restructuring liability, June 30, 2018 $ 90 Additions during the year 607 Payments and adjustments during the year (697 ) Accrued restructuring liability, December 28, 2018 $ - |
Note O - Earnings Per Share
Note O - Earnings Per Share | 6 Months Ended |
Dec. 28, 2018 | |
Notes to Financial Statements | |
Earnings Per Share [Text Block] | O. Earnings Per Share The Company calculates basic earnings per share based upon the weighted average number of common shares outstanding during the period, while the calculation of diluted earnings per share includes the dilutive effect of potential common shares outstanding during the period. The calculation of diluted earnings per share excludes all potential common shares if their inclusion would have an anti-dilutive effect. Certain restricted stock award recipients have a non-forfeitable right to receive dividends declared by the Company, and are therefore included in computing earnings per share pursuant to the two The components of basic and diluted earnings per share were as follows: For the Quarter Ended For the Two Quarters Ended December 28, 2018 December 29, 2017 December 28, 2018 December 29, 2017 Basic: Net income (loss) $ 4,079 $ (4,050 ) $ 6,982 $ (646 ) Less: Net earnings attributable to noncontrolling interest (6 ) (63 ) (47 ) (76 ) Less: Undistributed earnings attributable to unvested shares (53 ) - (105 ) - Net income (loss) available to Twin Disc shareholders 4,020 (4,113 ) 6,830 (722 ) Weighted average shares outstanding - basic 12,909 11,297 12,233 11,278 Basic Income (Loss) Per Share: Net income (loss) per share - basic $ 0.31 $ (0.36 ) $ 0.56 $ (0.06 ) Diluted: Net income (loss) $ 4,079 $ (4,050 ) $ 6,982 $ (646 ) Less: Net earnings attributable to noncontrolling interest (6 ) (63 ) (47 ) (76 ) Less: Undistributed earnings attributable to unvested shares (53 ) - (105 ) - Net income (loss) available to Twin Disc shareholders 4,020 (4,113 ) 6,830 (722 ) Weighted average shares outstanding - basic 12,909 11,297 12,233 11,278 Effect of dilutive stock awards 88 - 71 - Weighted average shares outstanding - diluted 12,997 11,297 12,304 11,278 Diluted Income (Loss) Per Share: Net income (loss) per share - diluted $ 0.31 $ (0.36 ) $ 0.56 $ (0.06 ) The following potential common shares were excluded from diluted EPS for the quarter and two December 28, 2018 134.4 185.3 33.6 16.6, 3.4 The following potential common shares were excluded from diluted EPS for the quarter and two December 29, 2017 224.9 272.4 9.6 |
Note P - Lease Liabilities
Note P - Lease Liabilities | 6 Months Ended |
Dec. 28, 2018 | |
Notes to Financial Statements | |
Leases of Lessee Disclosure [Text Block] | P. Lease Liabilities The Company leases certain office and warehouse space, as well as production and office equipment. The components of lease expense were as follows: For the Quarter Ended For the Two Quarters Ended December 28, 2018 December 29, 2017 December 28, 2018 December 29, 2017 Finance lease cost: Amortization of right-of-use assets $ 1 $ 1 $ 1 $ 1 Operating lease cost 850 665 1,730 1,298 Short-term lease cost 12 18 22 51 Variable lease cost (3 ) - 5 2 Total lease cost 860 684 1,758 1,352 Less: Sublease income (1 ) (98 ) (17 ) (151 ) Net lease cost $ 859 $ 586 $ 1,741 $ 1,201 Other information related to leases was as follows: For the Quarter Ended For the Two Quarters Ended December 28, 2018 December 29, 2017 December 28, 2018 December 29, 2017 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 850 $ 571 $ 1,725 $ 1,151 Operating cash flows from finance leases 1 1 2 2 Right-of-use-assets obtained in exchange for lease obligations: Operating leases 125 1,390 12,252 1,669 Weighted average remaining lease term (years): Operating leases 11.2 6.3 Finance lease 3.5 4.5 Weighted average discount rate: Operating leases 7.7 % 6.7 % Finance leases 4.0 % 4.0 % Approximate future minimum rental commitments under non-cancellable lease as of December 28, 2018 Operating Leases Finance Leases 2019 $ 1,717 $ 1 2020 3,168 3 2021 2,517 3 2022 2,007 3 2023 1,845 - Thereafter 13,007 - Total future lease payments 24,261 10 Less: Amount representing interest (7,794 ) (1 ) Present value of future payments $ 16,467 $ 9 The Company had $16,465 $6,527 December 28, 2018 June 30, 2018, $16,467 $6,527 December 28, 2018 June 30, 2018, |
Significant Accounting Policies
Significant Accounting Policies (Policies) | 6 Months Ended |
Dec. 28, 2018 | |
Accounting Policies [Abstract] | |
New Accounting Pronouncements, Policy [Policy Text Block] | Recently Adopted Accounting Standards a. In May 2014, 2014 09 July 1, 2018, not not July 1, 2018. The Company determined that deferral of revenue is appropriate for certain agreements where the performance of services after product delivery is required. Such services primarily pertain to technical commissioning services by its distribution entities in its marine business, whereby the Company’s technicians calibrate the controls and transmission to ensure proper performance for the customer’s specific application. This service helps identify issues with the ship's design or performance that need to be remediated by the ship builder or other component suppliers prior to the ship being officially accepted into service by the ship buyer. The cumulative effect adjustment of adopting the new standard is not b. In February 2016, 2016 02 12 July 1, 2018, 2014 09, For operating leases in which the Company is a lessee, the Company concluded that all existing operating leases under the old guidance continue to be classified as operating leases under the new guidance, and all existing capital leases under the old guidance are classified as finance leases under the new guidance. The Company excluded any lease contracts with terms of twelve The following table presents the effect of the adoption of ASU 2016 02 June 30, 2018: June 30, 2018 Adoption June 30, 2018 As Reported Impact Restated Property, plant and equipment, net $ 48,940 $ 6,527 $ 55,467 Lease obligations - 6,527 6,527 The adoption of ASU 2014 09 2016 02 not two December 29, 2017, two December 29, 2017. c. In March 2017, 2017 07 July 1, 2018 The following table presents the effect of the adoption of ASU 2017 07 two December 29, 2017: For the Quarter Ended For the Two Quarters Ended December 29, 2017 Adoption December 29, 2017 December 29, 2017 Adoption December 29, 2017 As Reported Impact Restated As Reported Impact Restated Cost of goods sold $ 38,420 $ (97 ) $ 38,323 $ 69,590 $ (194 ) $ 69,396 Gross profit 18,126 97 18,223 32,021 194 32,215 Marketing, engineering and administrative expenses 15,268 (198 ) 15,070 28,936 (472 ) 28,464 Income from operations 2,027 295 2,322 1,036 666 1,702 Other expense (income), net 69 295 364 268 666 934 d. In February 2018, 2018 02 July 1, 2018 $6,903 e. In October 2016, 2016 16 July 1, 2018. not f. In August 2016, 2016 15 eight July 1, 2018. not g. In August 2018, No. 33 10532, X 3 04 3 04 second 2019. not New Accounting Releases In August 2018, 2018 13 820, December 15, 2019 ( 2021 In August 2018, 2018 14 December 15, 2020 ( 2021 Special Note Regarding Smaller Reporting Company Status In June 2018, 33 10513; 34 83550, 12b 2 1934, 1 $250 2 $100 $700 no September 10, 2018, first 2019. second 2019. may not may |
Note A - Basis of Presentation
Note A - Basis of Presentation (Tables) | 6 Months Ended |
Dec. 28, 2018 | |
Accounting Standards Update 2017-07 [Member] | |
Notes Tables | |
Schedule of New Accounting Pronouncements and Changes in Accounting Principles [Table Text Block] | For the Quarter Ended For the Two Quarters Ended December 29, 2017 Adoption December 29, 2017 December 29, 2017 Adoption December 29, 2017 As Reported Impact Restated As Reported Impact Restated Cost of goods sold $ 38,420 $ (97 ) $ 38,323 $ 69,590 $ (194 ) $ 69,396 Gross profit 18,126 97 18,223 32,021 194 32,215 Marketing, engineering and administrative expenses 15,268 (198 ) 15,070 28,936 (472 ) 28,464 Income from operations 2,027 295 2,322 1,036 666 1,702 Other expense (income), net 69 295 364 268 666 934 |
Accounting Standards Update 2016-02 [Member] | |
Notes Tables | |
Schedule of New Accounting Pronouncements and Changes in Accounting Principles [Table Text Block] | June 30, 2018 Adoption June 30, 2018 As Reported Impact Restated Property, plant and equipment, net $ 48,940 $ 6,527 $ 55,467 Lease obligations - 6,527 6,527 |
Note B - Acquisition of Veth _2
Note B - Acquisition of Veth Propulsion Holding BV (Tables) | 6 Months Ended |
Dec. 28, 2018 | |
Notes Tables | |
Schedule of Business Acquisitions by Acquisition, Consideration Transferred [Table Text Block] | Cash (a) $ 60,729 Fair value of contingent consideration (b) 2,920 Total $ 63,649 |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block] | Cash, including restricted cash $ 1,078 (a) Accounts receivable and other current assets 9,999 (b) Inventories 27,273 (c) Property, plant and equipment 2,641 (d) Intangibles 22,000 (e) Other assets 258 Accounts payable and customer deposits and other current liabilities (18,402 ) Deferred tax liability (6,877 ) (f) Total net assets acquired 37,970 Goodwill 25,679 (g) Total consideration $ 63,649 |
Schedule of Inventory Acquired, Measured at Fair Value [Table Text Block] | Raw materials $ 12,804 Projects work in progress at fair value 14,469 Inventories at fair value 27,273 Inventories at book value 22,871 Step-up $ 4,402 |
Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination [Table Text Block] | Estimated fair value Estimated average useful lives Annual amortization Customer relationships $ 12,300 12 $ 1,025 Technology and know-how 8,000 7 1,143 Tradename 1,700 10 170 Total $ 22,000 $ 2,338 |
Business Acquisition, Pro Forma Information, Actual [Table Text Block] | Quarter Ended Two Quarters Ended December 28, 2018 December 28, 2018 Net sales $ 14,083 $ 27,436 Gross profit (a) 3,706 5,892 Operating income (loss) (b) 681 (40 ) Net income (loss) attributable to Twin Disc 376 (575 ) |
Business Acquisition, Pro Forma Information [Table Text Block] | Quarter Ended Two Quarters Ended December 29, 2017 December 29, 2017 Net sales $ 71,191 $ 130,902 Gross profit (a) 21,420 38,609 Net loss attributable to Twin Disc (b) (4,790 ) (2,075 ) Basic loss per share attributable to Twin Disc common shareholders $ (0.42 ) $ (0.18 ) Diluted loss per share attributable to Twin Disc common shareholders $ (0.42 ) $ (0.18 ) Weighted average number of common shares outstanding: Basic 11,297 11,278 Diluted 11,297 11,278 |
Note C - Revenue Recognition (T
Note C - Revenue Recognition (Tables) | 6 Months Ended |
Dec. 28, 2018 | |
Notes Tables | |
Disaggregation of Revenue [Table Text Block] | Elimination of Manufacturing Distribution Intercompany Sales Total Industrial $ 8,253 $ 2,580 $ (1,717 ) $ 9,116 Land-based transmissions 30,309 6,846 (7,377 ) 29,778 Marine and propulsion systems 32,412 16,307 (10,863 ) 37,856 Other 12 1,357 (12 ) 1,357 Total $ 70,986 $ 27,090 $ (19,969 ) $ 78,107 Elimination of Manufacturing Distribution Intercompany Sales Total Industrial $ 14,734 $ 3,977 $ (2,549 ) $ 16,162 Land-based transmissions 59,742 12,456 (12,784 ) 59,414 Marine and propulsion systems 65,388 30,464 (21,721 ) 74,131 Other 35 3,113 (59 ) 3,089 Total $ 139,899 $ 50,010 $ (37,113 ) $ 152,796 |
Note D - Inventories (Tables)
Note D - Inventories (Tables) | 6 Months Ended |
Dec. 28, 2018 | |
Notes Tables | |
Schedule of Inventory, Current [Table Text Block] | December 28, 2018 June 30, 2018 Inventories: Finished parts $ 56,796 $ 49,332 Work in process 26,723 13,183 Raw materials 46,715 21,486 $ 130,234 $ 84,001 |
Note E - Warranty (Tables)
Note E - Warranty (Tables) | 6 Months Ended |
Dec. 28, 2018 | |
Notes Tables | |
Schedule of Product Warranty Liability [Table Text Block] | For the Quarter Ended For the Two Quarters Ended December 28, 2018 December 29, 2017 December 28, 2018 December 29, 2017 Reserve balance, beginning of period $ 4,667 $ 2,326 $ 4,407 $ 2,062 Current period expense and adjustments 128 723 857 1,381 Payments or credits to customers (926 ) (589 ) (1,946 ) (1,022 ) Acquisition - - 557 - Translation (26 ) 7 (32 ) 46 Reserve balance, end of period $ 3,843 $ 2,467 $ 3,843 $ 2,467 |
Note G - Business Segments (Tab
Note G - Business Segments (Tables) | 6 Months Ended |
Dec. 28, 2018 | |
Notes Tables | |
Reconciliation of Revenue from Segments to Consolidated [Table Text Block] | For the Quarter Ended For the Two Quarters Ended December 28, 2018 December 29, 2017 December 28, 2018 December 29, 2017 Net sales Manufacturing segment sales $ 70,986 $ 48,580 $ 139,899 $ 88,453 Distribution segment sales 27,090 21,336 50,010 38,998 Inter/Intra segment elimination – manufacturing (14,931 ) (9,489 ) (29,681 ) (19,821 ) Inter/Intra segment elimination – distribution (5,038 ) (3,881 ) (7,432 ) (6,019 ) $ 78,107 $ 56,546 $ 152,796 $ 101,611 Net income (loss) attributable to Twin Disc Manufacturing segment net income $ 7,924 $ 123 $ 15,159 $ 5,190 Distribution segment net income 569 387 1,434 1,056 Corporate and eliminations (4,420 ) (4,623 ) (9,658 ) (6,968 ) $ 4,073 $ (4,113 ) $ 6,935 $ (722 ) |
Reconciliation of Assets from Segment to Consolidated [Table Text Block] | Assets December 28, 2018 June 30, 2018 Manufacturing segment assets $ 380,928 $ 266,417 Distribution segment assets 59,382 52,230 Corporate assets and elimination of intercompany assets (89,480 ) (77,407 ) $ 350,830 $ 241,240 |
Note I - Pension and Other Po_2
Note I - Pension and Other Postretirement Benefit Plans (Tables) | 6 Months Ended |
Dec. 28, 2018 | |
Notes Tables | |
Schedule of Net Funded Status [Table Text Block] | For the Quarter Ended For the Two Quarters Ended December 28, 2018 December 29, 2017 December 28, 2018 December 29, 2017 Pension Benefits: Service cost $ 251 $ 241 $ 497 $ 503 Interest cost 1,083 1,062 2,175 2,136 Expected return on plan assets (1,333 ) (1,516 ) (2,664 ) (3,041 ) Amortization of transition obligation 9 9 17 18 Amortization of prior service cost 1 1 2 2 Amortization of actuarial net loss 678 759 1,355 1,518 Net periodic benefit cost $ 689 $ 556 $ 1,382 $ 1,136 Postretirement Benefits: Service cost $ 5 $ 5 $ 9 $ 10 Interest cost 76 77 152 169 Amortization of actuarial net loss (69 ) (59 ) (137 ) (56 ) Net periodic benefit cost $ 12 $ 23 $ 24 $ 123 |
Note K - Goodwill and Other I_2
Note K - Goodwill and Other Intangibles (Tables) | 6 Months Ended |
Dec. 28, 2018 | |
Notes Tables | |
Schedule of Goodwill [Table Text Block] | Net Book Value Rollforward By Reporting Unit Gross Carrying Amount Accumulated Amortization / Impairment Net Book Value European Industrial European Propulsion Balance at June 30, 2018 $ 16,514 $ (13,822 ) $ 2,692 $ 2,692 $ - Acquisition 25,679 - 25,679 - 25,679 Translation adjustment (542 ) - (542 ) (75 ) (467 ) Balance at December 28, 2018 $ 41,651 $ (13,822 ) $ 27,829 $ 2,617 $ 25,212 |
Schedule of Acquired Finite-Lived Intangible Assets by Major Class [Table Text Block] | Net Book Value Rollforward Net Book Value By Asset Type Gross Carrying Amount Accumulated Amortization / Impairment Net Book Value Trade Name Customer Relationships Technology Know-how Other Balance at June 30, 2018 $ 13,485 $ (11,781 ) $ 1,704 $ 1,288 $ - $ - $ 416 Acquisition 22,000 - 22,000 1,700 12,300 8,000 - Other additions 138 - 138 - - - 138 Amortization - (1,249 ) (1,249 ) (127 ) (506 ) (564 ) (52 ) Translation adjustment (431 ) - (431 ) (66 ) (221 ) (143 ) (1 ) Balance at December 28, 2018 $ 35,192 $ (13,030 ) $ 22,162 $ 2,795 $ 11,573 $ 7,293 $ 501 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block] | Fiscal Year 2019 $ 1,267 2020 2,534 2021 2,488 2022 2,446 2023 2,439 2024 2,409 |
Note L - Long-term Debt (Tables
Note L - Long-term Debt (Tables) | 6 Months Ended |
Dec. 28, 2018 | |
Notes Tables | |
Schedule of Debt [Table Text Block] | December 28, 2018 June 30, 2018 Revolving loans $ 35,815 $ 4,787 Term loan (due January 2020) 10,837 - Other 34 37 Total long-term debt $ 46,686 $ 4,824 |
Note M - Shareholders' Equity (
Note M - Shareholders' Equity (Tables) | 6 Months Ended |
Dec. 28, 2018 | |
Notes Tables | |
Schedule of Stockholders Equity [Table Text Block] | Twin Disc, Inc. Shareholders’ Equity Accumulated Other Non- Common Retained Comprehensive Treasury Controlling Total Stock Earnings Income (Loss) Stock Interest Equity Balance, June 30, 2018 $ 11,570 $ 178,896 $ (23,792 ) $ (23,677 ) $ 619 $ 143,616 Net income 2,862 41 2,903 Translation adjustments (536 ) (25 ) (561 ) Benefit plan adjustments, net of tax 471 471 Release stranded tax effects 6,903 (6,903 ) - Cash dividends (115 ) (115 ) Compensation expense 850 850 Common stock issued, net 32,210 32,210 Shares acquired, net (586 ) (328 ) (914 ) Balance, September 28, 2018 44,044 188,661 (30,760 ) (24,005 ) 520 178,460 Net income 4,073 6 4,079 Translation adjustments (1,773 ) (13 ) (1,786 ) Benefit plan adjustments, net of tax 478 478 Cash dividends - Compensation expense 590 590 Shares (acquired) issued, net (497 ) 520 23 Balance, December 28, 2018 $ 44,137 $ 192,734 $ (32,055 ) $ (23,485 ) $ 513 $ 181,844 Twin Disc, Inc. Shareholders’ Equity Accumulated Other Non- Common Retained Comprehensive Treasury Controlling Total Stock Earnings Income (Loss) Stock Interest Equity Balance, June 30, 2017 $ 10,429 $ 169,368 $ (32,671 ) $ (24,205 ) $ 646 $ 123,567 Net income 3,391 13 3,404 Translation adjustments 2,547 (6 ) 2,541 Benefit plan adjustments, net of tax 474 474 Cash dividends (172 ) (172 ) Compensation expense 479 479 Shares (acquired) issued, net (1,030 ) 817 (213 ) Balance, September 29, 2017 9,878 172,759 (29,650 ) (23,388 ) 481 130,080 Net (loss) income (4,113 ) 63 (4,050 ) Translation adjustments 489 (1 ) 488 Benefit plan adjustments, net of tax 1,734 1,734 Cash dividends - Compensation expense 584 584 Shares (acquired) issued, net (376 ) 189 (187 ) Balance, December 29, 2017 $ 10,086 $ 168,646 $ (27,427 ) $ (23,199 ) $ 543 $ 128,649 |
Reconciliation For The Changes In Accumulated Other Comprehensive Income Loss Net Of Tax By Component [Table Text Block] | Translation Benefit Plan Adjustment Adjustment Balance at June 30, 2018 $ 7,085 $ (30,877 ) Translation adjustment during the quarter (536 ) - Release stranded tax effects - (6,903 ) Amounts reclassified from accumulated other comprehensive income - 471 Net current period other comprehensive loss (536 ) (6,432 ) Balance at September 28, 2018 6,549 (37,309 ) Translation adjustment during the quarter (1,773 ) - Amounts reclassified from accumulated other comprehensive income - 478 Net current period other comprehensive (loss) income (1,773 ) 478 Balance at December 28, 2018 $ 4,776 $ (36,831 ) Translation Benefit Plan Adjustment Adjustment Balance at June 30, 2017 $ 6,130 $ (38,801 ) Translation adjustment during the quarter 2,547 - Amounts reclassified from accumulated other comprehensive income - 474 Net current period other comprehensive income 2,547 474 Balance at September 29, 2017 8,677 (38,327 ) Translation adjustment during the quarter 489 - Other comprehensive income before reclassifications - 1,695 Amounts reclassified from accumulated other comprehensive income - 39 Net current period other comprehensive income 489 1,734 Balance at December 29, 2017 $ 9,166 $ (36,593 ) |
Reclassification out of Accumulated Other Comprehensive Income [Table Text Block] | Amount Reclassified Amount Reclassified Quarter Ended Two Quarters Ended December 28, 2018 December 28, 2018 Changes in benefit plan items Actuarial losses $ 614 (a) $ 1,222 (a) Transition asset and prior service benefit 10 (a) 19 (a) Total amortization 624 1,241 Income taxes 146 292 Total reclassification net of tax $ 478 $ 949 Amount Reclassified Amount Reclassified Quarter Ended Two Quarters Ended December 29, 2017 December 29, 2017 Changes in benefit plan items Actuarial losses $ 703 (a) $ 1,445 (a) Transition asset and prior service benefit 10 (a) 20 (a) Total amortization 713 1,465 Other benefit plan adjustments (1,695 ) (1,695 ) Income taxes 674 952 Total reclassification net of tax $ 1,734 $ 2,208 |
Note N - Restructuring of Ope_2
Note N - Restructuring of Operations (Tables) | 6 Months Ended |
Dec. 28, 2018 | |
Notes Tables | |
Restructuring and Related Costs [Table Text Block] | Accrued restructuring liability, June 30, 2018 $ 90 Additions during the year 607 Payments and adjustments during the year (697 ) Accrued restructuring liability, December 28, 2018 $ - |
Note O - Earnings Per Share (Ta
Note O - Earnings Per Share (Tables) | 6 Months Ended |
Dec. 28, 2018 | |
Notes Tables | |
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | For the Quarter Ended For the Two Quarters Ended December 28, 2018 December 29, 2017 December 28, 2018 December 29, 2017 Basic: Net income (loss) $ 4,079 $ (4,050 ) $ 6,982 $ (646 ) Less: Net earnings attributable to noncontrolling interest (6 ) (63 ) (47 ) (76 ) Less: Undistributed earnings attributable to unvested shares (53 ) - (105 ) - Net income (loss) available to Twin Disc shareholders 4,020 (4,113 ) 6,830 (722 ) Weighted average shares outstanding - basic 12,909 11,297 12,233 11,278 Basic Income (Loss) Per Share: Net income (loss) per share - basic $ 0.31 $ (0.36 ) $ 0.56 $ (0.06 ) Diluted: Net income (loss) $ 4,079 $ (4,050 ) $ 6,982 $ (646 ) Less: Net earnings attributable to noncontrolling interest (6 ) (63 ) (47 ) (76 ) Less: Undistributed earnings attributable to unvested shares (53 ) - (105 ) - Net income (loss) available to Twin Disc shareholders 4,020 (4,113 ) 6,830 (722 ) Weighted average shares outstanding - basic 12,909 11,297 12,233 11,278 Effect of dilutive stock awards 88 - 71 - Weighted average shares outstanding - diluted 12,997 11,297 12,304 11,278 Diluted Income (Loss) Per Share: Net income (loss) per share - diluted $ 0.31 $ (0.36 ) $ 0.56 $ (0.06 ) |
Note P - Lease Liabilities (Tab
Note P - Lease Liabilities (Tables) | 6 Months Ended |
Dec. 28, 2018 | |
Notes Tables | |
Lease, Cost [Table Text Block] | For the Quarter Ended For the Two Quarters Ended December 28, 2018 December 29, 2017 December 28, 2018 December 29, 2017 Finance lease cost: Amortization of right-of-use assets $ 1 $ 1 $ 1 $ 1 Operating lease cost 850 665 1,730 1,298 Short-term lease cost 12 18 22 51 Variable lease cost (3 ) - 5 2 Total lease cost 860 684 1,758 1,352 Less: Sublease income (1 ) (98 ) (17 ) (151 ) Net lease cost $ 859 $ 586 $ 1,741 $ 1,201 |
Operating and Finance Leases, Other Disclosures [Table Text Block] | For the Quarter Ended For the Two Quarters Ended December 28, 2018 December 29, 2017 December 28, 2018 December 29, 2017 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 850 $ 571 $ 1,725 $ 1,151 Operating cash flows from finance leases 1 1 2 2 Right-of-use-assets obtained in exchange for lease obligations: Operating leases 125 1,390 12,252 1,669 Weighted average remaining lease term (years): Operating leases 11.2 6.3 Finance lease 3.5 4.5 Weighted average discount rate: Operating leases 7.7 % 6.7 % Finance leases 4.0 % 4.0 % |
Schedule of Future Minimum Rental Payments for Operating Leases and Finance Lease, Liability, Maturity [Table Text Block] | Operating Leases Finance Leases 2019 $ 1,717 $ 1 2020 3,168 3 2021 2,517 3 2022 2,007 3 2023 1,845 - Thereafter 13,007 - Total future lease payments 24,261 10 Less: Amount representing interest (7,794 ) (1 ) Present value of future payments $ 16,467 $ 9 |
Note A - Basis of Presentatio_2
Note A - Basis of Presentation (Details Textual) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Sep. 28, 2018 | Dec. 28, 2018 | |
Tax Cuts and Jobs Act, Reclassification from AOCI to Retained Earnings, Tax Effect | ||
Retained Earnings [Member] | ||
Tax Cuts and Jobs Act, Reclassification from AOCI to Retained Earnings, Tax Effect | 6,903 | $ 6,903 |
AOCI Attributable to Parent [Member] | ||
Tax Cuts and Jobs Act, Reclassification from AOCI to Retained Earnings, Tax Effect | $ (6,903) | $ (6,903) |
Note A - Basis of Presentatio_3
Note A - Basis of Presentation - Summary of Effect of Adopting ASU 2016-02 on the Condensed Consolidated Balance Sheet (Details) - USD ($) $ in Thousands | Dec. 28, 2018 | Jun. 30, 2018 |
Property, plant and equipment, net | $ 70,309 | $ 55,467 |
Lease obligations | $ 16,467 | 6,527 |
Previously Reported [Member] | ||
Property, plant and equipment, net | 48,940 | |
Lease obligations | ||
Restatement Adjustment [Member] | Accounting Standards Update 2016-02 [Member] | ||
Property, plant and equipment, net | 6,527 | |
Lease obligations | $ 6,527 |
Note A - Basis of Presentatio_4
Note A - Basis of Presentation - Summary of Effects of Adopting ASU 2017-07 on the Condensed Statements of Operations and Comprehensive Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 28, 2018 | Dec. 29, 2017 | Dec. 28, 2018 | Dec. 29, 2017 | |
Cost of goods sold | $ 52,019 | $ 38,323 | $ 102,723 | $ 69,396 |
Gross profit | 26,088 | 18,223 | 50,073 | 32,215 |
Marketing, engineering and administrative expenses | 18,909 | 15,070 | 37,894 | 28,464 |
Income from operations | 6,745 | 2,322 | 11,572 | 1,702 |
Other expense (income), net | $ 798 | 364 | $ 1,118 | 934 |
Previously Reported [Member] | ||||
Cost of goods sold | 38,420 | 69,590 | ||
Gross profit | 18,126 | 32,021 | ||
Marketing, engineering and administrative expenses | 15,268 | 28,936 | ||
Income from operations | 2,027 | 1,036 | ||
Other expense (income), net | 69 | 268 | ||
Restatement Adjustment [Member] | Accounting Standards Update 2017-07 [Member] | ||||
Cost of goods sold | (97) | (194) | ||
Gross profit | 97 | 194 | ||
Marketing, engineering and administrative expenses | (198) | (472) | ||
Income from operations | 295 | 666 | ||
Other expense (income), net | $ 295 | $ 666 |
Note B - Acquisition of Veth _3
Note B - Acquisition of Veth Propulsion Holding BV (Details Textual) - USD ($) $ in Thousands | Jul. 02, 2018 | Dec. 28, 2018 | Dec. 29, 2017 | Dec. 28, 2018 | Dec. 29, 2017 | |
Proceeds from Issuance of Long-term Debt, Total | $ 35,000 | |||||
Payments to Acquire Businesses, Net of Cash Acquired, Total | 59,651 | |||||
Amortization of Inventory Fair Value Step-up | 2,173 | |||||
Amortization of Intangible Assets, Total | $ 583 | $ 45 | 1,249 | 89 | ||
The 2018 Credit Agreement [Member] | ||||||
Proceeds from Issuance of Long-term Debt, Total | $ 60,729 | |||||
Payments to Acquire Businesses, Net of Cash Acquired, Total | 59,651 | |||||
Cash Acquired from Acquisition | 1,078 | |||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Restricted Cash | $ 685 | |||||
Veth Propulsion [Member] | ||||||
Business Acquisition, Percentage of Voting Interests Acquired | 100.00% | |||||
Payments to Acquire Businesses, Gross | [1] | $ 60,729 | ||||
Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, High | $ 3,800 | |||||
Percentage of Work in Process of Inventory Completed | 70.00% | |||||
Inventory, Net, Step-up Value Amount | $ 4,402 | |||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment, Total | [2] | $ 2,641 | ||||
Amortization of Inventory Fair Value Step-up | 1,002 | 1,179 | 2,173 | 2,358 | ||
Amortization of Intangible Assets, Total | 647 | 1,268 | ||||
Business Combination, Acquisition Related Costs | $ 256 | $ 460 | ||||
Amortization of Intangible Assets and Interest Expense of Long-term Debt, Total, Before Tax | $ 1,136 | $ 2,271 | ||||
Veth Propulsion [Member] | Het Komt Vast Goed B.V. [Member] | ||||||
Lessee, Operating Lease, Term of Contract | 15 years | |||||
Lessee, Operating Lease, Annual Rent Payments | $ 1,249 | |||||
Veth Propulsion [Member] | Minimum [Member] | ||||||
Property, Plant and Equipment, Useful Life | 2 years | |||||
Veth Propulsion [Member] | Maximum [Member] | ||||||
Property, Plant and Equipment, Useful Life | 13 years | |||||
[1] | In the statement of cash flows, the cash used in the acquisition of Veth Propulsion in the amount of $59,651 is net of the cash, including restricted cash, acquired in the transaction, of $1,078 (see below for fair value of assets acquired and liabilities assumed). | |||||
[2] | The fair value of property, plant and equipment is estimated at $2,641. These assets primarily consist of manufacturing equipment, test equipment, vehicles, and office and plant fixtures. Their estimated useful lives range from 2 to 13 years. |
Note B - Acquisition of Veth _4
Note B - Acquisition of Veth Propulsion Holding BV - Consideration Transferred (Details) - Veth Propulsion [Member] $ in Thousands | Jul. 02, 2018USD ($) | |
Payments to Acquire Businesses, Gross | $ 60,729 | [1] |
Fair value of contingent consideration (b) | 2,920 | [2] |
Total | $ 63,649 | |
[1] | In the statement of cash flows, the cash used in the acquisition of Veth Propulsion in the amount of $59,651 is net of the cash, including restricted cash, acquired in the transaction, of $1,078 (see below for fair value of assets acquired and liabilities assumed). | |
[2] | This pertains to the fair value of the earn-out, which was estimated based on a probability-weighted approach. |
Note B - Acquisition of Veth _5
Note B - Acquisition of Veth Propulsion Holding BV - Summary of Preliminary Fair Value of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Dec. 28, 2018 | Jul. 02, 2018 | Jun. 30, 2018 | |
Goodwill, Ending Balance | $ 27,829 | $ 2,692 | ||
Veth Propulsion [Member] | ||||
Cash, including restricted cash | [1] | $ 1,078 | ||
Accounts receivable and other current assets | [2] | 9,999 | ||
Inventories | [3] | 27,273 | ||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment, Total | [4] | 2,641 | ||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | [5] | 22,000 | ||
Other assets | 258 | |||
Accounts payable and customer deposits and other current liabilities | (18,402) | |||
Deferred tax liability | [6] | (6,877) | ||
Total net assets acquired | 37,970 | |||
Goodwill, Ending Balance | [7] | 25,679 | ||
Total consideration | $ 63,649 | |||
[1] | Included in cash is restricted cash in the amount of $685. This amount is restricted and not available for general business use in order to guarantee performance obligations by Veth Propulsion under certain customer contracts. A significant majority of these arrangements have expired as of December 28, 2018 and they are not expected to be renewed. | |||
[2] | Accounts receivable represents contractual amounts receivable from customers less an allowance for doubtful accounts. This amount approximates fair value. | |||
[3] | Inventories consist of: Raw materials $ 12,804 Projects work in progress at fair value 14,469 Inventories at fair value 27,273 Inventories at book value 22,871 Step-up $ 4,402 As of the effective date of the acquisition, inventory is required to be measured at fair value. Raw materials are typically utilized in operations within one year of purchase and therefore book values approximate fair value. Projects work in progress are estimated to be approximately 70% complete, and the step-up to fair value less estimated costs to complete and sell resulted in a step-up value of approximately $4,402. | |||
[4] | The fair value of property, plant and equipment is estimated at $2,641. These assets primarily consist of manufacturing equipment, test equipment, vehicles, and office and plant fixtures. Their estimated useful lives range from 2 to 13 years. | |||
[5] | Intangible assets consist of: Estimated fair value Estimated average useful lives Annual amortization Customer relationships $ 12,300 12 $ 1,025 Technology and know-how 8,000 7 1,143 Tradename 1,700 10 170 Total $ 22,000 $ 2,338 The preliminary fair values were determined primarily using an income method, which utilizes financial forecasts of expected future cash flows. Some of the more significant assumptions used in the development of intangible asset values include: the amount and timing of projected future cash flows, the discount rate selected to measure the risks inherent in future cash flows, and the assessment of the asset's life cycle and competitive trends impacting the asset, as well as other factors. | |||
[6] | This represents the net deferred tax liability associated with the fair value of assets acquired and liabilities assumed. | |||
[7] | The Company is not able to deduct any of the goodwill for tax purposes. |
Note B - Acquisition of Veth _6
Note B - Acquisition of Veth Propulsion Holding BV - Inventories (Details) - Veth Propulsion [Member] $ in Thousands | Jul. 02, 2018USD ($) | |
Raw materials | $ 12,804 | |
Projects work in progress at fair value | 14,469 | |
Inventories at fair value | 27,273 | [1] |
Inventories at book value | 22,871 | |
Step-up | $ 4,402 | |
[1] | Inventories consist of: Raw materials $ 12,804 Projects work in progress at fair value 14,469 Inventories at fair value 27,273 Inventories at book value 22,871 Step-up $ 4,402 As of the effective date of the acquisition, inventory is required to be measured at fair value. Raw materials are typically utilized in operations within one year of purchase and therefore book values approximate fair value. Projects work in progress are estimated to be approximately 70% complete, and the step-up to fair value less estimated costs to complete and sell resulted in a step-up value of approximately $4,402. |
Note B - Acquisition of Veth _7
Note B - Acquisition of Veth Propulsion Holding BV - Intangible Assets (Details) - USD ($) $ in Thousands | Jul. 02, 2018 | Dec. 28, 2018 |
Intangible assets, estimated fair value | $ 22,000 | |
Intangible assets, estimated average useful lives (Year) | 10 years | |
Customer Relationships [Member] | ||
Intangible assets, estimated fair value | $ 12,300 | |
Technology-Based Intangible Assets [Member] | ||
Intangible assets, estimated fair value | 8,000 | |
Trade Names [Member] | ||
Intangible assets, estimated fair value | $ 1,700 | |
Veth Propulsion [Member] | ||
Intangible assets, estimated fair value | $ 22,000 | |
Intangible assets, annual amortization | 2,338 | |
Veth Propulsion [Member] | Customer Relationships [Member] | ||
Intangible assets, estimated fair value | $ 12,300 | |
Intangible assets, estimated average useful lives (Year) | 12 years | |
Intangible assets, annual amortization | $ 1,025 | |
Veth Propulsion [Member] | Technology-Based Intangible Assets [Member] | ||
Intangible assets, estimated fair value | $ 8,000 | |
Intangible assets, estimated average useful lives (Year) | 7 years | |
Intangible assets, annual amortization | $ 1,143 | |
Veth Propulsion [Member] | Trade Names [Member] | ||
Intangible assets, estimated fair value | $ 1,700 | |
Intangible assets, estimated average useful lives (Year) | 10 years | |
Intangible assets, annual amortization | $ 170 |
Note B - Acquisition of Veth _8
Note B - Acquisition of Veth Propulsion Holding BV - Financial Information From Veth Propulsion Included in the Consolidated Statements of Operations (Details) - Veth Propulsion [Member] - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Dec. 28, 2018 | Dec. 28, 2018 | ||
Net sales | $ 14,083 | $ 27,436 | |
Gross profit (a) | [1] | 3,706 | 5,892 |
Operating income (loss) (b) | [2] | 681 | (40) |
Net income (loss) attributable to Twin Disc | $ 376 | $ (575) | |
[1] | Gross profit includes the non-recurring charge for the step-up of inventories acquired of $1,002 and $2,173 for the quarter and two quarters ended December 28, 2018, respectively. | ||
[2] | In addition to (a), operating income (loss) includes the depreciation of property, plant and equipment and amortization of intangible assets acquired of $647 and $1,268 for the quarter and two quarters ended December 28, 2018, respectively. Operating income (loss) also includes one-time transaction charges related to the acquisition of $256 and $460 for the quarter and two quarters ended December 28, 2018, respectively. |
Note B - Acquisition of Veth _9
Note B - Acquisition of Veth Propulsion Holding BV - Unaudited Supplemental Pro Forma Information (Details) - Veth Propulsion [Member] - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | |
Dec. 29, 2017 | Dec. 29, 2017 | ||
Net sales | $ 71,191 | $ 130,902 | |
Gross profit (a) | [1] | 21,420 | 38,609 |
Net loss attributable to Twin Disc (b) | [2] | $ (4,790) | $ (2,075) |
Basic loss per share attributable to Twin Disc common shareholders (in dollars per share) | $ (0.42) | $ (0.18) | |
Diluted loss per share attributable to Twin Disc common shareholders (in dollars per share) | $ (0.42) | $ (0.18) | |
Basic (in shares) | 11,297 | 11,278 | |
Diluted (in shares) | 11,297 | 11,278 | |
[1] | Gross profit includes the amortization of the step-up of inventories of $1,179 and $2,358 for the quarter and two quarters ended December 29, 2017, respectively. | ||
[2] | In addition to (a), this includes the amortization of intangible assets acquired and interest expense on borrowings under the Credit Agreement net of other expenses, amounting to $1,136 and $2,271, before tax, for the quarter and two quarters ended December 29, 2017, respectively. |
Note C - Revenue Recognition (D
Note C - Revenue Recognition (Details Textual) $ in Thousands | Dec. 28, 2018USD ($) |
Contract with Customer, Liability, Total | $ 0 |
Contract with Customer, Asset, Gross | $ 0 |
Note C - Revenue Recognition -
Note C - Revenue Recognition - Net Sales by Product Group (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 28, 2018 | Dec. 29, 2017 | Dec. 28, 2018 | Dec. 29, 2017 | |
Net Sales | $ 78,107 | $ 56,546 | $ 152,796 | $ 101,611 |
Operating Segments [Member] | Manufacturing Segment [Member] | ||||
Net Sales | 70,986 | 48,580 | 139,899 | 88,453 |
Operating Segments [Member] | Distribution Segment [Member] | ||||
Net Sales | 27,090 | 21,336 | 50,010 | 38,998 |
Intersegment Eliminations [Member] | ||||
Net Sales | (19,969) | (37,113) | ||
Intersegment Eliminations [Member] | Manufacturing Segment [Member] | ||||
Net Sales | (14,931) | (9,489) | (29,681) | (19,821) |
Intersegment Eliminations [Member] | Distribution Segment [Member] | ||||
Net Sales | (5,038) | $ (3,881) | (7,432) | $ (6,019) |
Industrial [Member] | ||||
Net Sales | 9,116 | 16,162 | ||
Industrial [Member] | Operating Segments [Member] | Manufacturing Segment [Member] | ||||
Net Sales | 8,253 | 14,734 | ||
Industrial [Member] | Operating Segments [Member] | Distribution Segment [Member] | ||||
Net Sales | 2,580 | 3,977 | ||
Industrial [Member] | Intersegment Eliminations [Member] | ||||
Net Sales | (1,717) | (2,549) | ||
Land Based Transmissions [Member] | ||||
Net Sales | 29,778 | 59,414 | ||
Land Based Transmissions [Member] | Operating Segments [Member] | Manufacturing Segment [Member] | ||||
Net Sales | 30,309 | 59,742 | ||
Land Based Transmissions [Member] | Operating Segments [Member] | Distribution Segment [Member] | ||||
Net Sales | 6,846 | 12,456 | ||
Land Based Transmissions [Member] | Intersegment Eliminations [Member] | ||||
Net Sales | (7,377) | (12,784) | ||
Marine and Propulsion Systems [Member] | ||||
Net Sales | 37,856 | 74,131 | ||
Marine and Propulsion Systems [Member] | Operating Segments [Member] | Manufacturing Segment [Member] | ||||
Net Sales | 32,412 | 65,388 | ||
Marine and Propulsion Systems [Member] | Operating Segments [Member] | Distribution Segment [Member] | ||||
Net Sales | 16,307 | 30,464 | ||
Marine and Propulsion Systems [Member] | Intersegment Eliminations [Member] | ||||
Net Sales | (10,863) | (21,721) | ||
Other [Member] | ||||
Net Sales | 1,357 | 3,089 | ||
Other [Member] | Operating Segments [Member] | Manufacturing Segment [Member] | ||||
Net Sales | 12 | 35 | ||
Other [Member] | Operating Segments [Member] | Distribution Segment [Member] | ||||
Net Sales | 1,357 | 3,113 | ||
Other [Member] | Intersegment Eliminations [Member] | ||||
Net Sales | $ (12) | $ (59) |
Note D - Inventories - Inventor
Note D - Inventories - Inventories (Details) - USD ($) $ in Thousands | Dec. 28, 2018 | Jun. 30, 2018 |
Finished parts | $ 56,796 | $ 49,332 |
Work in process | 26,723 | 13,183 |
Raw materials | 46,715 | 21,486 |
Total inventories | $ 130,234 | $ 84,001 |
Note E - Warranty (Details Text
Note E - Warranty (Details Textual) - USD ($) $ in Thousands | Dec. 28, 2018 | Dec. 29, 2017 |
Product Warranty Accrual, Current | $ 3,309 | $ 2,032 |
Product Warranty Accrual, Noncurrent | $ 534 | $ 435 |
Note E - Warranty - Warranty (D
Note E - Warranty - Warranty (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 28, 2018 | Dec. 29, 2017 | Dec. 28, 2018 | Dec. 29, 2017 | |
Reserve balance | $ 4,667 | $ 2,326 | $ 4,407 | $ 2,062 |
Current period expense and adjustments | 128 | 723 | 857 | 1,381 |
Payments or credits to customers | (926) | (589) | (1,946) | (1,022) |
Acquisition, Warranty | 557 | |||
Translation | (26) | 7 | (32) | 46 |
Reserve balance | $ 3,843 | $ 2,467 | $ 3,843 | $ 2,467 |
Note G - Business Segments (Det
Note G - Business Segments (Details Textual) | 6 Months Ended |
Dec. 28, 2018 | |
Number of Reportable Segments | 2 |
Note G - Business Segments - Re
Note G - Business Segments - Revenues by Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 28, 2018 | Dec. 29, 2017 | Dec. 28, 2018 | Dec. 29, 2017 | |
Net sales | ||||
Net sales | $ 78,107 | $ 56,546 | $ 152,796 | $ 101,611 |
Net income (loss) | 4,073 | (4,113) | 6,935 | (722) |
Intersegment Eliminations [Member] | ||||
Net sales | ||||
Net sales | (19,969) | (37,113) | ||
Corporate, Non-Segment [Member] | ||||
Net sales | ||||
Net income (loss) | (4,420) | (4,623) | (9,658) | (6,968) |
Manufacturing Segment [Member] | Operating Segments [Member] | ||||
Net sales | ||||
Net sales | 70,986 | 48,580 | 139,899 | 88,453 |
Net income (loss) | 7,924 | 123 | 15,159 | 5,190 |
Manufacturing Segment [Member] | Intersegment Eliminations [Member] | ||||
Net sales | ||||
Net sales | (14,931) | (9,489) | (29,681) | (19,821) |
Distribution Segment [Member] | Operating Segments [Member] | ||||
Net sales | ||||
Net sales | 27,090 | 21,336 | 50,010 | 38,998 |
Net income (loss) | 569 | 387 | 1,434 | 1,056 |
Distribution Segment [Member] | Intersegment Eliminations [Member] | ||||
Net sales | ||||
Net sales | $ (5,038) | $ (3,881) | $ (7,432) | $ (6,019) |
Note G - Business Segments - As
Note G - Business Segments - Assets by Segment (Details) - USD ($) $ in Thousands | Dec. 28, 2018 | Jun. 30, 2018 |
Segment Assets | $ 350,830 | $ 241,240 |
Operating Segments [Member] | Manufacturing Segment [Member] | ||
Segment Assets | 380,928 | 266,417 |
Operating Segments [Member] | Distribution Segment [Member] | ||
Segment Assets | 59,382 | 52,230 |
Corporate, Non-Segment [Member] | ||
Segment Assets | $ (89,480) | $ (77,407) |
Note H - Stock-based Compensa_2
Note H - Stock-based Compensation (Details Textual) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 28, 2018 | Dec. 29, 2017 | Dec. 28, 2018 | Dec. 29, 2017 | |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Total | $ 1,522,000 | $ 1,522,000 | ||
Performance Stock Awards [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 42,300 | 54,900 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 3 years | 3 years | ||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 63,400 | 69,200 | 63,400 | 69,200 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number, Ending Balance | 188,000 | 224,900 | 188,000 | 224,900 |
Allocated Share-based Compensation Expense, Total | $ 242,000 | $ 121,000 | $ 788,000 | $ 136,000 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value, Ending Balance | $ 15.02 | $ 15.02 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Fair Value | $ 0 | $ 0 | ||
Restricted Stock [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 35,600 | 85,300 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number, Ending Balance | 185,300 | 272,400 | 185,300 | 272,400 |
Allocated Share-based Compensation Expense, Total | $ 266,000 | $ 464,000 | $ 516,000 | $ 927,000 |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Total | $ 1,217,000 | 1,217,000 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Fair Value | $ 2,102,000 | $ 1,758,000 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period | 2,800 | 0 | ||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 3 years | |||
Restricted Stock [Member] | Minimum [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 1 year | |||
Restricted Stock [Member] | Maximum [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 3 years | |||
Restricted Stock Units (RSUs) [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 38,000 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 3 years | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number, Ending Balance | 38,000 | 38,000 | ||
Allocated Share-based Compensation Expense, Total | $ 82,000 | $ 136,000 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value, Ending Balance | $ 25.77 | $ 25.77 | ||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Total | $ 842,000 | $ 842,000 | ||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 3 years |
Note I - Pension and Other Po_3
Note I - Pension and Other Postretirement Benefit Plans (Details Textual) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 28, 2018 | Dec. 29, 2017 | Dec. 28, 2018 | Dec. 29, 2017 | |
Other Comprehensive (Income) Loss, Defined Benefit Plan, Prior Service Cost (Credit), Reclassification Adjustment from AOCI, after Tax | $ 478 | $ 1,734 | $ 949 | $ 2,208 |
Other Comprehensive (Income) Loss, Defined Benefit Plan, Prior Service Cost (Credit), Reclassification Adjustment from AOCI, Tax | 146 | $ 674 | 292 | $ 952 |
Pension Plan [Member] | ||||
Defined Benefit Plan, Expected Future Employer Contributions, Current Fiscal Year | $ 2,382 | 2,382 | ||
Defined Benefit Plan, Plan Assets, Contributions by Employer | $ 1,429 |
Note I - Pension and Other Po_4
Note I - Pension and Other Postretirement Benefit Plans - Net Funded Status of Pension and Postretirement Plans (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 28, 2018 | Dec. 29, 2017 | Dec. 28, 2018 | Dec. 29, 2017 | |
Pension Plan [Member] | ||||
Service cost | $ 251 | $ 241 | $ 497 | $ 503 |
Interest cost | 1,083 | 1,062 | 2,175 | 2,136 |
Expected return on plan assets | 1,333 | 1,516 | 2,664 | 3,041 |
Amortization of transition obligation | (9) | (9) | (17) | (18) |
Amortization of prior service cost | 1 | 1 | 2 | 2 |
Amortization of actuarial net loss | 678 | 759 | 1,355 | 1,518 |
Net periodic benefit cost | 689 | 556 | 1,382 | 1,136 |
Other Postretirement Benefits Plan [Member] | ||||
Service cost | 5 | 5 | 9 | 10 |
Interest cost | 76 | 77 | 152 | 169 |
Amortization of actuarial net loss | (69) | (59) | (137) | (56) |
Net periodic benefit cost | $ 12 | $ 23 | $ 24 | $ 123 |
Note J - Income Taxes (Details
Note J - Income Taxes (Details Textual) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | |
Dec. 28, 2018 | Dec. 29, 2017 | Jun. 30, 2018 | |
Effective Income Tax Rate Reconciliation, Percent, Total | 25.10% | 204.00% | |
Increase (Decrease) in Income Tax Expense Due to Changes in Enacted Tax Rate | $ 4,526 | ||
Effective Income Tax Rate Reconciliation, Change in Enacted Tax Rate, Percent | 727.90% | ||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% | 35.00% | |
Transitional Income Tax , Amount | $ 0 | ||
Unrecognized Tax Benefits that Would Impact Effective Tax Rate | 1,092 | ||
Foreign Tax Authority [Member] | |||
Effective Income Tax Rate Reconciliation, Change in Deferred Tax Assets Valuation Allowance, Amount | $ 3,803 | ||
Effective Income Tax Rate Reconciliation, Change in Deferred Tax Assets Valuation Allowance, Percent | 611.50% | ||
Increase (Decrease) in Income Tax Expense Due to Changes in Enacted Tax Rate | $ 431 | ||
Effective Income Tax Rate Reconciliation, Change in Enacted Tax Rate, Percent | 69.30% | ||
Open Tax Year | 2011 2012 2013 2014 2015 2016 2017 2018 | ||
State and Local Jurisdiction [Member] | |||
Open Tax Year | 2015 2016 2017 2018 | ||
State and Local Jurisdiction [Member] | Wisconsin Department of Revenue [Member] | |||
Open Tax Year | 2010 2011 2012 2013 |
Note K - Goodwill and Other I_3
Note K - Goodwill and Other Intangibles (Details Textual) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||||
Dec. 28, 2018 | Dec. 29, 2017 | Dec. 28, 2018 | Dec. 29, 2017 | Jul. 02, 2018 | Jun. 30, 2018 | ||
Goodwill, Ending Balance | $ 27,829 | $ 27,829 | $ 2,692 | ||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 10 years | ||||||
Amortization of Intangible Assets, Total | 583 | $ 45 | $ 1,249 | $ 89 | |||
Indefinite-lived Intangible Assets (Excluding Goodwill), Ending Balance | 200 | 200 | 202 | ||||
European Industrial [Member] | |||||||
Goodwill, Ending Balance | 2,617 | 2,617 | $ 2,692 | ||||
Goodwill, Impairment Loss | 0 | ||||||
Veth Propulsion [Member] | |||||||
Goodwill, Ending Balance | [1] | $ 25,679 | |||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | [2] | $ 22,000 | |||||
Amortization of Intangible Assets, Total | $ 647 | $ 1,268 | |||||
[1] | The Company is not able to deduct any of the goodwill for tax purposes. | ||||||
[2] | Intangible assets consist of: Estimated fair value Estimated average useful lives Annual amortization Customer relationships $ 12,300 12 $ 1,025 Technology and know-how 8,000 7 1,143 Tradename 1,700 10 170 Total $ 22,000 $ 2,338 The preliminary fair values were determined primarily using an income method, which utilizes financial forecasts of expected future cash flows. Some of the more significant assumptions used in the development of intangible asset values include: the amount and timing of projected future cash flows, the discount rate selected to measure the risks inherent in future cash flows, and the assessment of the asset's life cycle and competitive trends impacting the asset, as well as other factors. |
Note K - Goodwill and Other I_4
Note K - Goodwill and Other Intangibles - Goodwill Rollforward (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Dec. 28, 2018 | Jun. 30, 2018 | |
Balance, goodwill gross carrying amount | $ 16,514 | |
Acquisition, goodwill gross carrying amount | 25,679 | |
Translation adjustment, goodwill gross carrying amount | (542) | |
Balance, goodwill gross carrying amount | 41,651 | |
Balance, goodwill accumulated impairment | (13,822) | $ (13,822) |
Balance, goodwill net book value | 2,692 | |
Acquisition, goodwill net book value | 25,679 | |
Translation adjustment, goodwill net book value | (542) | |
Balance, goodwill net book value | 27,829 | |
European Industrial [Member] | ||
Acquisition, goodwill gross carrying amount | ||
Translation adjustment, goodwill gross carrying amount | (75) | |
Balance, goodwill net book value | 2,692 | |
Acquisition, goodwill net book value | ||
Translation adjustment, goodwill net book value | (75) | |
Balance, goodwill net book value | 2,617 | |
European Propulsion [Member] | ||
Acquisition, goodwill gross carrying amount | 25,679 | |
Translation adjustment, goodwill gross carrying amount | (467) | |
Balance, goodwill net book value | ||
Acquisition, goodwill net book value | 25,679 | |
Translation adjustment, goodwill net book value | (467) | |
Balance, goodwill net book value | $ 25,212 |
Note K - Goodwill and Other I_5
Note K - Goodwill and Other Intangibles - Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 28, 2018 | Dec. 29, 2017 | Dec. 28, 2018 | Dec. 29, 2017 | |
Balance, Definite Intangible Assets Gross Carrying Amount | $ 13,485 | |||
Acquisition, Definite Intangible Assets Gross Carrying Amount | 22,000 | |||
Other additions, Definite Intangible Assets Gross Carrying Amount | 138 | |||
Translation adjustment, Definite Intangible Assets Gross Carrying Amount | (431) | |||
Balance, Definite Intangible Assets Gross Carrying Amount | $ 35,192 | 35,192 | ||
Balance, Definite Intangible Assets Accumulated Amortization/Impairment | (11,781) | |||
Amortization, Definite Intangible Assets Accumulated Amortization/Impairment | (583) | $ (45) | (1,249) | $ (89) |
Translation adjustment, Definite Intangible Assets Accumulated Amortization/Impairment | ||||
Balance, Definite Intangible Assets Accumulated Amortization/Impairment | (13,030) | (13,030) | ||
Balance, Definite Intangible Assets Net Book Value | 1,704 | |||
Intangible assets, estimated fair value | 22,000 | |||
Other additions, Definite Intangible Assets Net Book Value | 138 | |||
Amortization, Definite Intangible Assets Net Book Value | (583) | $ (45) | (1,249) | $ (89) |
Translation adjustment, Definite Intangible Assets Net Book Value | (431) | |||
Balance, Definite Intangible Assets Net Book Value | 22,162 | 22,162 | ||
Trade Names [Member] | ||||
Amortization, Definite Intangible Assets Accumulated Amortization/Impairment | (127) | |||
Balance, Definite Intangible Assets Net Book Value | 1,288 | |||
Intangible assets, estimated fair value | 1,700 | |||
Other additions, Definite Intangible Assets Net Book Value | ||||
Amortization, Definite Intangible Assets Net Book Value | (127) | |||
Translation adjustment, Definite Intangible Assets Net Book Value | (66) | |||
Balance, Definite Intangible Assets Net Book Value | 2,795 | 2,795 | ||
Customer Relationships [Member] | ||||
Amortization, Definite Intangible Assets Accumulated Amortization/Impairment | (506) | |||
Balance, Definite Intangible Assets Net Book Value | ||||
Intangible assets, estimated fair value | 12,300 | |||
Other additions, Definite Intangible Assets Net Book Value | ||||
Amortization, Definite Intangible Assets Net Book Value | (506) | |||
Translation adjustment, Definite Intangible Assets Net Book Value | (221) | |||
Balance, Definite Intangible Assets Net Book Value | 11,573 | 11,573 | ||
Technology-Based Intangible Assets [Member] | ||||
Amortization, Definite Intangible Assets Accumulated Amortization/Impairment | (564) | |||
Balance, Definite Intangible Assets Net Book Value | ||||
Intangible assets, estimated fair value | 8,000 | |||
Other additions, Definite Intangible Assets Net Book Value | ||||
Amortization, Definite Intangible Assets Net Book Value | (564) | |||
Translation adjustment, Definite Intangible Assets Net Book Value | (143) | |||
Balance, Definite Intangible Assets Net Book Value | 7,293 | 7,293 | ||
Other Intangible Assets [Member] | ||||
Amortization, Definite Intangible Assets Accumulated Amortization/Impairment | (52) | |||
Balance, Definite Intangible Assets Net Book Value | 416 | |||
Intangible assets, estimated fair value | ||||
Other additions, Definite Intangible Assets Net Book Value | 138 | |||
Amortization, Definite Intangible Assets Net Book Value | (52) | |||
Translation adjustment, Definite Intangible Assets Net Book Value | (1) | |||
Balance, Definite Intangible Assets Net Book Value | $ 501 | $ 501 |
Note K - Goodwill and Other I_6
Note K - Goodwill and Other Intangibles - Estimated Intangibles Amortization Expense (Details) $ in Thousands | Dec. 28, 2018USD ($) |
2,019 | $ 1,267 |
2,020 | 2,534 |
2,021 | 2,488 |
2,022 | 2,446 |
2,023 | 2,439 |
2,024 | $ 2,409 |
Note L - Long-term Debt (Detail
Note L - Long-term Debt (Details Textual) - USD ($) $ in Thousands | Sep. 25, 2018 | Jul. 02, 2018 | Dec. 28, 2018 | Dec. 29, 2017 | Jun. 29, 2018 |
Proceeds from Issuance of Long-term Debt, Total | $ 35,000 | ||||
The 2018 Credit Agreement [Member] | |||||
Proceeds from Issuance of Long-term Debt, Total | $ 60,729 | ||||
Repayments of Debt | $ 32,310 | ||||
The 2018 Credit Agreement [Member] | Revolving Credit Facility [Member] | |||||
Proceeds from Issuance of Long-term Debt, Total | 25,729 | ||||
The 2018 Credit Agreement [Member] | Term Loan [Member] | |||||
Proceeds from Issuance of Long-term Debt, Total | $ 35,000 | ||||
Debt Instrument, Interest Rate During Period | 5.20% | ||||
BMO [Member] | The 2018 Credit Agreement [Member] | |||||
Debt Instrument, Percentage of Equity Interest in Certain Domestic Subsidiaries | 100.00% | ||||
Debt Instrument, Percentage of Equity Interest in Certain Foreign Subsidiaries | 65.00% | ||||
BMO [Member] | The 2018 Credit Agreement [Member] | Revolving Credit Facility [Member] | |||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 50,000 | ||||
Debt Instrument, Interest Rate During Period | 4.45% | ||||
Line of Credit Facility, Current Borrowing Capacity | $ 50,000 | ||||
Line of Credit Facility, Remaining Borrowing Capacity | $ 14,185 | ||||
BMO [Member] | The 2018 Credit Agreement [Member] | Term Loan [Member] | |||||
Debt Agreement, Maximum Borrowing Capacity | $ 35,000 | ||||
Bank of Montreal [Member] | The 2018 Credit Agreement [Member] | Revolving Credit Facility [Member] | |||||
Debt Instrument, Interest Rate During Period | 2.25% |
Note L - Long-term Debt - Long-
Note L - Long-term Debt - Long-term Debt (Details) - USD ($) $ in Thousands | Dec. 28, 2018 | Jun. 30, 2018 |
Long-term debt | $ 46,686 | $ 4,824 |
Revolving Loan [Member] | ||
Long-term debt | 35,815 | 4,787 |
Term Loan [Member] | ||
Long-term debt | 10,837 | |
Other Long-Term Debt [Member] | ||
Long-term debt | $ 34 | $ 37 |
Note M - Shareholders' Equity_2
Note M - Shareholders' Equity (Details Textual) - USD ($) $ / shares in Units, $ in Thousands | Sep. 25, 2018 | Dec. 28, 2018 | Dec. 29, 2017 | Dec. 28, 2018 | Dec. 29, 2017 |
Stock Issued During Period, Shares, New Issues | 1,533,300 | ||||
Share Price | $ 22.50 | ||||
Payments of Stock Underwriting Costs | $ 2,070 | ||||
Payments of Stock Offering Expenses | 220 | ||||
Proceeds from Issuance of Common Stock | $ 32,210 | ||||
Stock Repurchase Program, Remaining Number of Shares Authorized to be Repurchased | 315,000 | 315,000 | |||
Treasury Stock, Shares, Acquired | 0 | 0 | 0 | 0 |
Note M - Shareholders' Equity -
Note M - Shareholders' Equity - Shareholders' Equity Reconciliation (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Dec. 28, 2018 | Sep. 28, 2018 | Dec. 29, 2017 | Sep. 29, 2017 | Dec. 28, 2018 | Dec. 29, 2017 | |
Balance | $ 178,460 | $ 143,616 | $ 130,080 | $ 123,567 | $ 143,616 | $ 123,567 |
Net income (loss) | 4,079 | 2,903 | (4,050) | 3,404 | 6,982 | (646) |
Translation adjustment during the quarter | (1,786) | (561) | 488 | 2,541 | (2,347) | 3,029 |
Benefit plan adjustments, net of tax | 478 | 471 | 1,734 | 474 | 949 | 2,208 |
Release stranded tax effects | ||||||
Cash dividends | (115) | (172) | ||||
Compensation expense and tax shortfall | 590 | 850 | 584 | 479 | ||
Common stock issued, net | 32,210 | |||||
Shares acquired, net | 23 | (914) | (187) | (213) | ||
Balance | 181,844 | 178,460 | 128,649 | 130,080 | 181,844 | 128,649 |
Common Stock [Member] | ||||||
Balance | 44,044 | 11,570 | 9,878 | 10,429 | 11,570 | 10,429 |
Net income (loss) | ||||||
Translation adjustment during the quarter | ||||||
Benefit plan adjustments, net of tax | ||||||
Release stranded tax effects | ||||||
Cash dividends | ||||||
Compensation expense and tax shortfall | 590 | 850 | 584 | 479 | ||
Common stock issued, net | 32,210 | |||||
Shares acquired, net | (497) | (586) | (376) | (1,030) | ||
Balance | 44,137 | 44,044 | 10,086 | 9,878 | 44,137 | 10,086 |
Retained Earnings [Member] | ||||||
Balance | 188,661 | 178,896 | 172,759 | 169,368 | 178,896 | 169,368 |
Net income (loss) | 4,073 | 2,862 | (4,113) | 3,391 | ||
Translation adjustment during the quarter | ||||||
Benefit plan adjustments, net of tax | ||||||
Release stranded tax effects | (6,903) | (6,903) | ||||
Cash dividends | ||||||
Compensation expense and tax shortfall | ||||||
Common stock issued, net | ||||||
Shares acquired, net | ||||||
Balance | 192,734 | 188,661 | 168,646 | 172,759 | 192,734 | 168,646 |
AOCI Attributable to Parent [Member] | ||||||
Balance | (30,760) | (23,792) | (29,650) | (32,671) | (23,792) | (32,671) |
Net income (loss) | ||||||
Translation adjustment during the quarter | (1,773) | (536) | 489 | 2,547 | ||
Benefit plan adjustments, net of tax | 478 | 471 | 1,734 | 474 | ||
Release stranded tax effects | 6,903 | 6,903 | ||||
Cash dividends | ||||||
Compensation expense and tax shortfall | ||||||
Common stock issued, net | ||||||
Shares acquired, net | ||||||
Balance | (32,055) | (30,760) | (27,427) | (29,650) | (32,055) | (27,427) |
Treasury Stock [Member] | ||||||
Balance | (24,005) | (23,677) | (23,388) | (24,205) | (23,677) | (24,205) |
Net income (loss) | ||||||
Translation adjustment during the quarter | ||||||
Benefit plan adjustments, net of tax | ||||||
Release stranded tax effects | ||||||
Cash dividends | ||||||
Compensation expense and tax shortfall | ||||||
Common stock issued, net | ||||||
Shares acquired, net | 520 | (328) | 189 | 817 | ||
Balance | (23,485) | (24,005) | (23,199) | (23,388) | (23,485) | (23,199) |
Noncontrolling Interest [Member] | ||||||
Balance | 520 | 619 | 481 | 646 | 619 | 646 |
Net income (loss) | 6 | 41 | 63 | 13 | ||
Translation adjustment during the quarter | (13) | (25) | (1) | (6) | ||
Benefit plan adjustments, net of tax | ||||||
Release stranded tax effects | ||||||
Cash dividends | (115) | (172) | ||||
Compensation expense and tax shortfall | ||||||
Common stock issued, net | ||||||
Shares acquired, net | ||||||
Balance | $ 513 | $ 520 | $ 543 | $ 481 | $ 513 | $ 543 |
Note M - Shareholders' Equity_3
Note M - Shareholders' Equity - Accumulated Other Comprehensive Income (Loss), Net of Tax (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Dec. 28, 2018 | Sep. 28, 2018 | Dec. 29, 2017 | Sep. 29, 2017 | Dec. 28, 2018 | Dec. 29, 2017 | |
Balance | $ 178,460 | $ 143,616 | $ 130,080 | $ 123,567 | $ 143,616 | $ 123,567 |
Translation adjustment during the quarter | (1,786) | (561) | 488 | 2,541 | (2,347) | 3,029 |
Release stranded tax effects | ||||||
Balance | 181,844 | 178,460 | 128,649 | 130,080 | 181,844 | 128,649 |
Accumulated Foreign Currency Adjustment Attributable to Parent [Member] | ||||||
Balance | 6,549 | 7,085 | 8,677 | 6,130 | 7,085 | 6,130 |
Translation adjustment during the quarter | (1,773) | (536) | 489 | 2,547 | ||
Release stranded tax effects | ||||||
Amounts reclassified from accumulated other comprehensive income | ||||||
Net current period other comprehensive (loss) income | (1,773) | (536) | 489 | 2,547 | ||
Other comprehensive income before reclassifications | ||||||
Balance | 4,776 | 6,549 | 9,166 | 8,677 | 4,776 | 9,166 |
Accumulated Defined Benefit Plans Adjustment Attributable to Parent [Member] | ||||||
Balance | (37,309) | (30,877) | (38,327) | (38,801) | (30,877) | (38,801) |
Translation adjustment during the quarter | ||||||
Release stranded tax effects | (6,903) | |||||
Amounts reclassified from accumulated other comprehensive income | 478 | 471 | 39 | 474 | ||
Net current period other comprehensive (loss) income | 478 | (6,432) | 1,734 | 474 | ||
Other comprehensive income before reclassifications | 1,695 | |||||
Balance | $ (36,831) | $ (37,309) | $ (36,593) | $ (38,327) | $ (36,831) | $ (36,593) |
Note M - Shareholders' Equity_4
Note M - Shareholders' Equity - Reconciliation for the Reclassifications Out of Accumulated Other Comprehensive Income (Loss), Net of Tax (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||||
Dec. 28, 2018 | Sep. 28, 2018 | Dec. 29, 2017 | Sep. 29, 2017 | Dec. 28, 2018 | Dec. 29, 2017 | ||
Income tax expense | $ 1,451 | $ 5,925 | $ 2,338 | $ 1,267 | |||
Net income (loss) | 4,079 | $ 2,903 | (4,050) | $ 3,404 | 6,982 | (646) | |
Reclassification out of Accumulated Other Comprehensive Income [Member] | Accumulated Defined Benefit Plans Adjustment Attributable to Parent [Member] | |||||||
Actuarial losses | [1] | 614 | 703 | 1,222 | 1,445 | ||
Transition asset and prior service benefit | [1] | 10 | 10 | 19 | 20 | ||
Total amortization | 624 | 713 | 1,241 | 1,465 | |||
Income tax expense | 146 | 674 | 292 | 952 | |||
Net income (loss) | $ 478 | 1,734 | $ 949 | 2,208 | |||
Other benefit plan adjustments | $ (1,695) | $ (1,695) | |||||
[1] | These accumulated other comprehensive income components are included in the computation of net periodic pension cost (see Note I "Pension and Other Postretirement Benefit Plans" for further details). |
Note N - Restructuring of Ope_3
Note N - Restructuring of Operations (Details Textual) $ in Thousands | 3 Months Ended | 6 Months Ended | 43 Months Ended | ||
Dec. 28, 2018USD ($) | Dec. 29, 2017USD ($) | Dec. 28, 2018USD ($) | Dec. 29, 2017USD ($) | Dec. 28, 2018USD ($) | |
Restructuring Charges, Total | $ 434 | $ 831 | $ 607 | $ 2,049 | $ 9,880 |
Restructuring and Related Cost, Number of Positions Eliminated | 175 |
Note N - Restructuring of Ope_4
Note N - Restructuring of Operations - Roll-forward of Restructuring Activity (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 43 Months Ended | ||
Dec. 28, 2018 | Dec. 29, 2017 | Dec. 28, 2018 | Dec. 29, 2017 | Dec. 28, 2018 | |
Accrued restructuring liability | $ 90 | ||||
Additions during the year | $ 434 | $ 831 | 607 | $ 2,049 | $ 9,880 |
Payments and adjustments during the year | (697) | ||||
Accrued restructuring liability |
Note O - Earnings Per Share (De
Note O - Earnings Per Share (Details Textual) - shares | 3 Months Ended | 6 Months Ended | ||
Dec. 28, 2018 | Dec. 29, 2017 | Dec. 28, 2018 | Dec. 29, 2017 | |
Performance Shares [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 134,400 | 224,900 | 134,400 | 224,900 |
Restricted Stock [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 185,300 | 272,400 | 185,300 | 272,400 |
Restricted Stock Units (RSUs) [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 33,600 | 16,600 | ||
Employee Stock Option [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 3,400 | 9,600 | 3,400 | 9,600 |
Note O - Earnings Per Share - C
Note O - Earnings Per Share - Components of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Dec. 28, 2018 | Sep. 28, 2018 | Dec. 29, 2017 | Sep. 29, 2017 | Dec. 28, 2018 | Dec. 29, 2017 | |
Basic: | ||||||
Net income (loss) | $ 4,079 | $ 2,903 | $ (4,050) | $ 3,404 | $ 6,982 | $ (646) |
Less: Net earnings attributable to noncontrolling interest | (6) | (63) | (47) | (76) | ||
Less: Undistributed earnings attributable to unvested shares | (53) | (105) | ||||
Net income (loss) available to Twin Disc shareholders | $ 4,020 | $ (4,113) | $ 6,830 | $ (722) | ||
Weighted average shares outstanding - basic (in shares) | 12,909 | 11,297 | 12,233 | 11,278 | ||
Basic Income (Loss) Per Share: | ||||||
Net income (loss) per share - basic (in dollars per share) | $ 0.31 | $ (0.36) | $ 0.56 | $ (0.06) | ||
Diluted: | ||||||
Net income (loss) | $ 4,079 | $ 2,903 | $ (4,050) | $ 3,404 | $ 6,982 | $ (646) |
Less: Net earnings attributable to noncontrolling interest | (6) | (63) | (47) | (76) | ||
Less: Undistributed earnings attributable to unvested shares | (53) | (105) | ||||
Net income (loss) available to Twin Disc shareholders | $ 4,020 | $ (4,113) | $ 6,830 | $ (722) | ||
Weighted average shares outstanding - basic (in shares) | 12,909 | 11,297 | 12,233 | 11,278 | ||
Effect of dilutive stock awards (in shares) | 88 | 71 | ||||
Weighted average shares outstanding - diluted (in shares) | 12,997 | 11,297 | 12,304 | 11,278 | ||
Diluted Income (Loss) Per Share: | ||||||
Net income (loss) per share - diluted (in dollars per share) | $ 0.31 | $ (0.36) | $ 0.56 | $ (0.06) |
Note P - Lease Liabilities (Det
Note P - Lease Liabilities (Details Textual) - USD ($) $ in Thousands | Dec. 28, 2018 | Jun. 30, 2018 |
Operating Lease, Right-of-Use Asset | $ 16,465 | $ 6,527 |
Operating Lease, Liability, Total | $ 16,467 | $ 6,527 |
Note P - Lease Liabilities - Co
Note P - Lease Liabilities - Components of Lease Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 28, 2018 | Dec. 29, 2017 | Dec. 28, 2018 | Dec. 29, 2017 | |
Amortization of right-of-use assets | $ 1 | $ 1 | $ 1 | $ 1 |
Operating lease cost | 850 | 665 | 1,730 | 1,298 |
Short-term lease cost | 12 | 18 | 22 | 51 |
Variable lease cost | (3) | 5 | 2 | |
Total lease cost | 860 | 684 | 1,758 | 1,352 |
Less: Sublease income | (1) | (98) | (17) | (151) |
Net lease cost | $ 859 | $ 586 | $ 1,741 | $ 1,201 |
Note P - Lease Liabilities - Ot
Note P - Lease Liabilities - Other Information Related to Leases (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 28, 2018 | Dec. 29, 2017 | Dec. 28, 2018 | Dec. 29, 2017 | |
Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases | $ 850 | $ 571 | $ 1,725 | $ 1,151 |
Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from finance leases | 1 | 1 | 2 | 2 |
Right-of-use-assets obtained in exchange for lease obligations: Operating leases | $ 125 | $ 1,390 | $ 12,252 | $ 1,669 |
Weighted average remaining lease term (years): Operating leases (Year) | 11 years 73 days | 6 years 109 days | 11 years 73 days | 6 years 109 days |
Weighted average remaining lease term (years): Finance lease (Year) | 3 years 182 days | 4 years 182 days | 3 years 182 days | 4 years 182 days |
Weighted average discount rate: Operating leases | 7.70% | 6.70% | 7.70% | 6.70% |
Weighted average discount rate: Finance leases | 4.00% | 4.00% | 4.00% | 4.00% |
Note P - Lease Liabilities - Fu
Note P - Lease Liabilities - Future Minimum Rental Commitments Under Noncancellable Leases (Details) - USD ($) $ in Thousands | Dec. 28, 2018 | Jun. 30, 2018 |
2,019 | $ 1,717 | |
2,019 | 1 | |
2,020 | 3,168 | |
2,020 | 3 | |
2,021 | 2,517 | |
2,021 | 3 | |
2,022 | 2,007 | |
2,022 | 3 | |
2,023 | 1,845 | |
2,023 | ||
Thereafter | 13,007 | |
Thereafter | ||
Total future lease payments | 24,261 | |
Total future lease payments | 10 | |
Less: Amount representing interest | (7,794) | |
Less: Amount representing interest | 1 | |
Operating Lease, Liability, Total | 16,467 | $ 6,527 |
Present value of future payments | $ 9 |