Note E - Business Segments

6 Months Ended

Dec. 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						For the Two Quarters Ended
	December 25, 2020			December 27, 2019			December 25, 2020			December 27, 2019
Net sales
Manufacturing segment sales	$	41,705		$	57,173		$	80,200		$	111,734
Distribution segment sales		23,223			22,025			45,729			44,452
Inter/Intra segment elimination – manufacturing		(12,170	)		(15,105	)		(22,908	)		(28,935	)
Inter/Intra segment elimination – distribution		(4,320	)		(4,557	)		(8,440	)		(8,425	)
	$	48,438		$	59,536		$	94,581		$	118,826
Net (loss) income attributable to Twin Disc
Manufacturing segment net loss	$	(3,112	)	$	(2,936	)	$	(5,774	)	$	(7,791	)
Distribution segment net income		500			842			1,655			1,934
Corporate and eliminations		(1,701	)		(4,422	)		(4,173	)		(6,970	)
	$	(4,313	)	$	(6,516	)	$	(8,292	)	$	(12,827	)

	December 25, 2020			June 30, 2020
Assets
Manufacturing segment assets	$	373,405		$	365,417
Distribution segment assets		45,534			43,118
Corporate assets and elimination of intercompany assets		(112,356	)		(114,408	)
	$	306,583		$	294,127

Disaggregated revenue:

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

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

					Elimination of
	Manufacturing		Distribution		Intercompany Sales			Total
Industrial	$	5,287	$	1,308	$	(512	)	$	6,083
Land-based transmissions		10,101		6,308		(5,503	)		10,906
Marine and propulsion systems		26,300		14,216		(10,464	)		30,052
Other		17		1,391		(11	)		1,397
Total	$	41,705	$	23,223	$	(16,490	)	$	48,438

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

					Elimination of
	Manufacturing		Distribution		Intercompany Sales			Total
Industrial	$	5,892	$	1,484	$	(751	)	$	6,625
Land-based transmissions		16,559		6,238		(7,492	)		15,305
Marine and propulsion systems		34,700		13,418		(11,419	)		36,699
Other		22		885		-			907
Total	$	57,173	$	22,025	$	(19,662	)	$	59,536

Net sales by product group for the two quarters ended December 25, 2020 is summarized as follows:

					Elimination of
	Manufacturing		Distribution		Intercompany Sales			Total
Industrial	$	10,093	$	2,679	$	(905	)	$	11,867
Land-based transmissions		20,595		12,374		(10,231	)		22,738
Marine and propulsion systems		49,479		26,975		(20,195	)		56,259
Other		33		3,701		(17	)		3,717
Total	$	80,200	$	45,729	$	(31,348	)	$	94,581

Net sales by product group for the two quarters ended December 27, 2019 is summarized as follows:

					Elimination of
	Manufacturing		Distribution		Intercompany Sales			Total
Industrial	$	12,700	$	2,952	$	(1,564	)	$	14,088
Land-based transmissions		33,973		11,718		(14,867	)		30,824
Marine and propulsion systems		65,020		27,628		(20,928	)		71,720
Other		41		2,154		(1	)		2,194
Total	$	111,734	$	44,452	$	(37,360	)	$	118,826