Earnings call transcript Q2 2023

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Operator

Greetings, and welcome to Twin Disc Inc. Fiscal Second Quarter 2023 Earnings Conference Call. At thit time, all participants are in a listen-only mode. [Operator Instructions] As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Stan Berger. you. Thank

begin. may You

Stan Berger

for On financial extremely the taken pleased in quarter thank to Doug. company's discuss Disc, XXXX and fiscal the of business we participate second you and call, are that first our us behalf you, to management the half of and Twin time joining results Thank you have outlook.

predictions like call, for certain statements beliefs, this conference especially Before statements. statements that expectations, future introducing made the everyone or management, are forward-looking to remind I hopes, those would introductions, during

is the XX-K, in from It materially projected company's results company's the of could cause Information important the copies forward-looking concerning could or on be may which contained differ such to those contacting those annual report from in obtained actual actual to remember results by that SEC. factors the that differ forward-looking either company Form in statements. are materially the statements

have morning which By release, now, news market should the received before you the this issued was opened.

have the If Officer; company's Hosting at send you. to not our Jeff John Executive of Twin the President a Financial Chief and and Finance, Treasurer Secretary. release Disc's we office Knutson, please XXX-XXX-XXXX, Batten, Chief and call today Vice will you Officer, are call a copy, received

call At the time, this I Batten. will over John? John to turn

John Batten

call. Stan, and conference fiscal our quarter you, Thank second good morning, to everyone. XXXX Welcome

to with take will we begin short be a your questions. summary then happy usual, As and statement, we'll

almost around to first good world a very the every we Given did supply and teams in sequential year-over-year that and deliver making in inflationary pressures the area improvement quarter. better job quarter, saw constraints think our we the a

improvement in details, improved came oil currency, healthy at holding a cover Jeff in America that growth in line top of most is will rebuild constant very half stated and almost with sales the each in into but business XX%. euros. North the some On improved the activity. what's account, currency Global industrial of you in than gas once Marine produced also more shipments percentages take and

of The fall new that markets late further and we had they had all summer XXXX. months strong our pricing Veth’s round was finish pass improve and That gross with backlog robust. we XXXX to in increased shipments in January. of Activity should delivered very cost increases another as the margins fiscal nicely in of quarter. on

inventory control second many There was noticeable Much had This of improve improvement shipments, the Additionally, lockdowns, harnesses expect pause quarter in have also Shipments shipped. in slowed we Asia COVID for we some this year. margin quarter-over-quarter demand their and lower displays. of of their slightly the the declined half. half and can now projects in in in improve attributed as the results. during but second to waiting should our increase be units this in a to

causes increased very into late which from Again, North on that inventory transmissions. a treat quarter rebuilds, other key had like America the keep us will deliveries shipping half. and gas components remain oil aftermarket second heat continue gears for good from completed

fourth quarter. the unit New into this quarter later should start and shipments

electric & Pacific viral see will frac National and last have released resilience this has to electric our suspect I Company built the hybrid and for and Northwest in field the rig mentioned research include later As X,XXX new Other that market Snow vessel to deployed quarter, on horsepower the year. transmission the Grizzly calendar Laboratory. in a you this applications be that Seattle X,XXX come with I it, frac by

electric applications. fiscal the encourage of for our end is updates and visit and XX-foot catamaran a year. transmissions. latest website of water the should everyone is through all I This electric motor marine that resilience the RV on both master clutches The in the our driven diesel and our be by hybrid to

building mainly that In on Through our production sale looking for underway. of do this to this more Similarly, recorded our consolidation to test, quarter, of organizational facility. a process focus assembly we're gain for looking and Italian we is structures. you and gear the supply to be efficient, are well decision we chain both This facility. we noticed years smaller on with and footprint the operations, Belgian and the efficient and with more our new look and our

now, to talk about Jeff I'll over to the turn it And financials.

Jeff Knutson

and marine global prior the fiscal up oil the Good year quarter, John. reliable results. for briefly were company's mentioned somewhat Thanks, electric with challenging reflects ongoing the supply the X.X% XX.X and area from quarter quarters, sales everyone. million The improved quarter. I'll find quarter previous the in second year-to-date the constraints of demand increase markets. and Sales XXXX morning, chain through the X.X by run second remaining and million in gas, to in Shipments supply. components most industrial, predictable limited or

quarter, for second marine year transmission sales sales pumping North the America showed Europe to by region, compared products XX%, demand decline while slight Sales pressure Industrial from X.X%, the help of sales propulsion in grew into up product North sales improved By With equipment, X.X%. X.X%. American our in were XX%. were a and product up while improving prior by

China. pause certain primarily Asia temporary by the oil into into declined and market due to gas-related products the Pacific in a of Sales shipment X.X%,

sales exchange the net to X and million in impact for was negative currency Foreign half. first the X.X a quarter million

first sales XX.X% XX% On half. for second quarter increased a currency and constant basis, the

improved favorable to inflationary function margin efficiencies prior thanks actions. and quarter proactive to operating volume, compared reduced of is the the the mix, This improved, second second impact, XX.X% The year pricing in quarter. XX.X% product a in year a improvement percent of current

XXXX for is XX.X%, second the half. XX.X% and fiscal or now compared to compared for to increased administrative For the first gross XXXX. on quarter first engineering, fiscal the Spending [ph] marketing, XXXX] half, margin [fiscal X.X%, XX,XXX costs

activity along a Netherlands foreign impact as such inflationary salaries, and increases marketing, the offset in impact spending to of X.X due fees, with by XXX,XXX, in which totaled a is in impacts and currency COVID areas prior totaling increase travel, translation quarter These million. subsidies return were The primarily the professional XXX,XXX. to more of normal partially year the

of revenue for expenses second of XX% half, year compared percent And were revenue, XXXX. prior were to XX.X% XX.X% fiscal the XX.X%, ME&A ME&A quarter. the expenses compared in a the half of first the quarter, for second As first in to

during gain During our million facility. non-operating was half leaseback first the year recorded noted. second million we prior the tax the first as quarter, to rate sale we the negative related the John sale fiscal effective for Swiss Belgian a a $X.X related XXX.X% and quarter, compared recorded $X.X in year gain leaseback Similarly, of our first to of a nonoperating fiscal The XXXX half. prior to the XXX.X%, and of facility,

is share, the fiscal loss or the diluted half second million $X.XX of the of diluted a quarter. along the had share per fiscal per X.X per in per share, prior XXXX of a valuation loss of or first mix rates X.X share wide The fiscal loss XXXX the $X.XX the with diluted disparity for or second full foreign was to earnings XXX,XXX X.X And of quarter to for $X.XX for we million first net allowance a half. compared million diluted profit year XXXX, function domestic or Net of of by in compared jurisdiction. net $X.XX a net

from and the year quarter of the million million prior was a quarter, improved X.X second $X.X year of year-to-date, improved the slight loss in prior is $X.X from greatly EBITDA first half for XX% of the for EBITDA million.

as a chain impacted shipment currency-driven by result products shipments up temporary a balance delayed Inventory X.X the the and Turning million decline excluding in was to million. supply X.X certain year, for shipments, sheet. customer increase, translation of distribution the the impact timing The operations. imbalances, of through continued gas China, oil our delay and of significant into the of

refine significant We anticipate our progress. that to inventory drive in continue focus we half planning sourcing will as second strategies and and improvement on

the the in and With inventory, half year, million of the for spending $X to first capital operating we spending offsetting range machine for operating results, half. positive full-year. of on Capital the our the quarterly similar in of first the the run focused was million expect was increase X.X cash million $XX for the in slightly modernization a for rate remainder tools, totaling improved

turn comments. John I'll to final it for back some Now,

John Batten

I'll quick and on a Jeff, moment take outlook. our Thanks,

and can have backlog we heading think into very finish the a market at conditions second Looking the fiscal that we year, XXXX. half to the strong of

offset As to we mentioned, and of we that had to QX implement the QX. additional another saw in we round pricing increases

The dealing are which with that of improve. in to come significant of starting control and the frac supply, our Many transmissions. improvement [indiscernible], most our marine, electronic covers has have all we been bottlenecks

spare Additionally, continuing we for and XXXX. see gas parts demand oil throughout

you happy the please and Jeff questions? now And your remarks. prepared for our questions. could I to be take concludes Doug, line will That open

John Batten

if We Thank appreciate conference thank call for that do in Disc joining you hope we'll you look following them myself, our the today. your interest to close will Jeff We turn our continuing fiscal of you, or that Doug, as to possible. speaking now again have third you Twin you call questions answer XXXX either and Doug, call and and to forward you. I'll to the as quickly try back quarter.

Operator

does this and your Thank today's participation. you Ladies conclude you. Thank teleconference. gentlemen, for

lines disconnect wonderful this a have time, your You at may and day.

Twin Disc (TWIN) 3 Feb 232023 Q2 Earnings call transcript