Exhibit 99.1
TWIN DISC, INC., ANNOUNCES FINANCIAL RESULTS FOR
FISCAL 2003 FOURTH QUARTER AND FULL YEAR
RACINE, WISCONSIN-July 28, 2003-Twin Disc, Inc. (NYSE: TDI), today reported
financial results for the fourth quarter and fiscal year ended June 30, 2003.
Revenues for both periods were aided by the positive impact of a strong Euro.
For the year's closing quarter, net sales increased to $53,100,000 from the
$52,840,000 reported for the same period last year. Net income for the quarter
of $1,941,000, or $0.69 per diluted share, was up from of $1,400,000, or $0.50
per diluted share, a year ago.
Net sales for fiscal 2003 of $179,591,000 were approximately flat compared with
the $179,385,000 reported for fiscal 2002. The Company reported a net loss for
the fiscal year of $2,368,000, or $0.84 per share, versus last year's net income
of $2,058,000, or $0.73 per diluted share. Fiscal 2003 earnings were negatively
impacted by just over $2 million in charges related to restructuring initiatives
during the year.
Fiscal 2003 revenues increased in each quarter versus the prior quarter, with
fourth-quarter net sales up 45 percent, 24 percent and 13 percent, respectively,
from the fiscal year's first, second and third quarters. Reflecting increased
sales volume and a favorable product mix, gross margin for the fiscal fourth
quarter expanded to 22.6 percent-up from 16.2 percent in the current fiscal
year's first quarter, 15.6 percent in the second quarter and 22.1 percent in the
third quarter.
Chairman and Chief Executive Officer Michael E. Batten stated, "In our fiscal
2003 fourth quarter, modestly recovering demand supported by upward momentum in
current military contracts and positive effects of foreign currency translation
resulted in our third sequential quarter of revenue improvement, and second
consecutive quarter of profitability.
"Highlights for the period included significant contributions from new-product
introductions, such as our high-performance QuickShift(tm) marine transmissions
and the 8500 Series transmissions for oilfield applications, which supplemented
improving core business strength. Our continuing ability to compete successfully
for defense applications was underscored by the $14.8 million contract for
transmission systems announced in June, augmenting recently awarded U.S. defense
contracts for other land-based transmissions."
Batten continued, "Even factoring in the anticipated rates of profitability in
fiscal 2004, a special review of the Company's domestic compensation and
benefits packages signaled the necessity for additional actions to address the
impact of rising pension and post-retirement healthcare costs. Actions taken-
albeit reluctantly-subsequent to the fiscal yearend included increasing
retirees' healthcare-expense contributions and eliminating certain healthcare
coverages, as well as across-the-board wage reductions for officers and
employees. The combined effect of these changes will approximately offset
projected increases for both pension and post-retirement healthcare costs in
fiscal 2004. We are proud of the fact that, despite these adjustments, our
compensation and benefits packages still rank near the top of Racine-area
employers surveyed within the past year.
"Looking ahead, we are encouraged by modestly improving order rates in our
pleasure craft marine business. Arneson surface drive demand remains solid, and
we are experiencing increasing momentum in sales of industrial products. In
summary, we expect positive year-over-year comparisons entering the new fiscal
year," Batten concluded.
Twin Disc, Inc., designs, manufactures and internationally distributes heavy-
duty off-highway power transmission equipment for the construction, industrial,
government, marine, agricultural, and energy and natural resources markets.
This press release may contain statements that are forward looking as defined by
the Securities and Exchange Commission in its rules, regulations and releases.
The Company intends that such forward-looking statements be subject to the safe
harbors created thereby. All forward-looking statements are based on current
expectations regarding important risk factors including those identified in the
Company's most recent periodic report and other filings with the Securities and
Exchange Commission. Accordingly, actual results may differ materially from
those expressed in the forward-looking statements, and the making of such
statements should not be regarded as a representation by the Company or any
other person that the results expressed therein will be achieved.
- --Financial Results Follow-
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per-share data)
Three Months Ended Fiscal Year Ended
June 30, June 30,
(Unaudited)
2003 2002 2003 2002
-------- -------- -------- --------
Net sales $53,100 $52,840 $179,591 $179,385
Cost of sales 41,118 40,723 144,575 139,146
-------- -------- -------- --------
Gross income 11,982 12,117 35,016 40,239
Marketing, engineering and
administrative expenses 8,460 8,854 34,790 34,638
Restructuring of operations 0 0 2,042 0
-------- -------- -------- --------
Operating income (loss) 3,522 3,263 (1,816) 5,601
Interest expense 340 345 1,323 1,700
Other (income) expense (262) (363) (500) (1,242)
Earnings (loss) before taxes and
minority interest 3,444 3,281 (2,639) 5,143
Income taxes (benefit) 1,498 1,829 (283) 2,950
-------- -------- -------- --------
Earnings (loss) before minority
Interest 1,946 1,452 (2,356) 2,193
Minority interest (5) (52) (12) (135)
Net earnings (loss) $1,941 $1,400 ($2,368) $2,058
-------- -------- -------- --------
-------- -------- -------- --------
Earnings (loss) per share data:
Basic $0.69 $0.50 ($0.84) $0.73
Diluted $0.69 $0.50 ($0.84) $0.73
Average shares outstanding 2,798 2,808 2,805 2,808
Fully diluted shares outstanding 2,798 2,808 2,805 2,808
Dividends per share $0.175 $0.175 $0.70 $0.70
Contact: Twin Disc, Inc.
Christopher J. Eperjesy (262) 638-4343