Note E - Business Segments

3 Months Ended

Sep. 25, 2020

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

E. 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's worldwide sales to both domestic and foreign customers are transacted through a direct sales force and a distributor network.

The Company has two reportable segments: manufacturing and distribution.  Its segment structure reflects the way management makes operating decisions and manages the growth and profitability of the business. It also corresponds with management’s approach of allocating resources and assessing the performance of its segments. The accounting practices of the segments are the same as those described in the summary of significant accounting policies. Transfers among segments are at established inter-company selling prices.  Management evaluates the performance of its segments based on net income.

Information about the Company’s segments is summarized as follows:

	For the Quarter Ended
	September 25, 2020			September 27, 2019
Net sales
Manufacturing segment sales	$	38,495		$	54,561
Distribution segment sales		22,506			22,428
Inter/Intra segment elimination – manufacturing		(10,738	)		(13,830	)
Inter/Intra segment elimination – distribution		(4,120	)		(3,869	)
	$	46,143		$	59,290
Net (loss) income attributable to Twin Disc
Manufacturing segment net loss	$	(2,662	)	$	(4,855	)
Distribution segment net income		1,155			1,092
Corporate and eliminations		(2,472	)		(2,548	)
	$	(3,979	)	$	(6,311	)

	September 25, 2020			June 30, 2020
Assets
Manufacturing segment assets	$	369,621		$	365,417
Distribution segment assets		43,844			43,118
Corporate assets and elimination of intercompany assets		(111,122	)		(114,408	)
	$	302,343		$	294,127

Disaggregated revenue:

The following table presents details deemed most relevant to the users of the financial statements for the quarters ended September 25, 2020 and September 27, 2019.

Net sales by product group for the quarter ended September 25, 2020 is summarized as follows:

					Elimination of
	Manufacturing		Distribution		Intercompany Sales			Total
Industrial	$	4,806	$	1,370	$	(393	)	$	5,783
Land-based transmissions		10,494		6,067		(4,728	)		11,833
Marine and propulsion systems		23,179		12,759		(9,732	)		26,206
Other		16		2,310		(5	)		2,321
Total	$	38,495	$	22,506	$	(14,858	)	$	46,143

Net sales by product group for the quarter ended September 27, 2019 is summarized as follows:

					Elimination of
	Manufacturing		Distribution		Intercompany Sales			Total
Industrial	$	6,808	$	1,468	$	(812	)	$	7,464
Land-based transmissions		17,414		5,480		(7,376	)		15,518
Marine and propulsion systems		30,320		14,211		(9,510	)		35,021
Other		19		1,269		(1	)		1,287
Total	$	54,561	$	22,428	$	(17,699	)	$	59,290