Twin Disc, Inc. (NASDAQ:TWIN) reported fourth-quarter and full-year results on Thursday, showing double-digit revenue growth across both periods but ending the fiscal year with a net loss.
For the year ended June 30, 2025, sales rose 15.5% year-on-year to $340.7 million. Despite the top-line growth, the company posted a net loss attributable to shareholders of $1.9 million, or ($0.14) per diluted share, compared with a profit in the prior year. EBITDA came in at $19.0 million, down from $26.5 million a year earlier, reflecting higher expenses, currency translation losses, and stock-based compensation.
Operating cash flow for the year reached $24.0 million, with free cash flow of $8.8 million. Twin Disc also reported a six-month backlog of $150.5 million, supported by strong order activity.
Fourth-Quarter Results
In the three months ending June 30, quarterly sales rose 14.5% from a year earlier to $96.7 million. Net income attributable to Twin Disc was $1.4 million, or $0.10 per diluted share, compared with $7.4 million, or $0.53 per diluted share, in the same period of 2024.
Quarterly EBITDA dropped 40% to $7.0 million, pressured by higher operating expenses and currency impacts. Still, gross profit for the quarter improved nearly 20% to $30.0 million, with gross margin climbing 130 basis points to 31%.
CEO Comments on Market Dynamics
“We closed out the fiscal year with our strongest quarter, a reflection of the team’s consistent execution and resilience in dynamic markets. Marine and Propulsion led the way with robust defense-driven demand, while Industrial saw steady recovery and increased shipments late in the year. Although oil and gas remained challenged, we continued to advance our electrification strategy with new e-frac activity. Throughout the year, we maintained pricing discipline and protected margins, even as we managed through tariff noise and ongoing cost pressures. Our recent acquisitions expanded our global footprint and diversified our end markets, reinforcing the strength of our platform,” said John H. Batten, President and Chief Executive Officer.
He added: “As we enter the new fiscal year, we are in a stronger position both operationally and strategically, supported by a healthy backlog, greater organizational agility, and our integration efforts that are creating new commercial opportunities across regions and segments. Our established presence in the defense market, reinforced by a steady flow of strong customer inquiries, positions us to capture additional growth. Looking ahead, we are committed to driving growth, maintaining disciplined operations, and executing on our long-term value creation strategy.”
Business Trends and Regional Shifts
The company said full-year sales growth was fueled by demand for land-based transmissions and strength in marine and propulsion systems, while industrial markets stabilized. On an organic basis, excluding acquisitions and currency effects, revenue for the fourth quarter fell 8.4% due to lower oil and gas transmission shipments to China. Full-year organic revenue rose 1%.
Regionally, Twin Disc delivered double-digit growth in Europe and Asia-Pacific, helped by acquisitions. The sales mix shifted toward Europe, while Asia-Pacific’s share declined.
Expenses and Margins
Marketing, engineering, and administrative costs increased 20.9% year-over-year in the fourth quarter to $24.6 million, driven by acquisitions, higher professional fees, and wage inflation. For the full year, ME&A expenses rose 15.1% to $82.4 million.
Gross profit for the year rose 11.3% to $92.7 million, though gross margin slipped 100 basis points to 27.2%.
CFO Perspective
Jeffrey S. Knutson, Vice President of Finance, Chief Financial Officer, Treasurer, and Secretary, said: “We’re pleased with our financial performance this year, marked by disciplined execution and strong integration progress. Our inventory is well positioned to support demand heading into the new year, and our cash position remains healthy, giving us flexibility to invest in growth while maintaining a strong balance sheet. With continued progress on global manufacturing optimization, we’re well equipped to scale efficiently and support sustainable profitability.”
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