Note E - Business Segments

6 Months Ended

Dec. 31, 2021

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.  These segment structures reflect 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 between segments are at established inter-company selling prices.  Management evaluates the performance of its segments based on their net income.

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

	For the Quarter Ended						For the Two Quarters Ended
	December 31, 2021			December 25, 2020			December 31, 2021			December 25, 2020
Net sales
Manufacturing segment sales	$	49,298		$	41,705		$	90,893		$	80,200
Distribution segment sales		28,291			23,223			48,825			45,729
Inter/Intra segment elimination – manufacturing		(13,200	)		(12,170	)		(24,143	)		(22,908	)
Inter/Intra segment elimination – distribution		(4,500	)		(4,201	)		(7,925	)		(8,284	)
	$	59,889		$	48,557		$	107,650		$	94,737
Net (loss) income attributable to Twin Disc
Manufacturing segment net (loss) income	$	(1,601	)	$	(3,112	)	$	3,231		$	(5,774	)
Distribution segment net income		1,496			500			1,979			1,655
Corporate and eliminations		(3,731	)		(1,701	)		(7,124	)		(4,173	)
	$	(3,836	)	$	(4,313	)	$	(1,914	)	$	(8,292	)

Assets	December 31, 2021			June 30, 2021
Manufacturing segment assets	$	344,947		$	364,379
Distribution segment assets		50,899			46,956
Corporate assets and elimination of intercompany assets		(131,288	)		(135,922	)
	$	264,558		$	275,413

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 31, 2021 and December 25, 2020.

Net sales by product group for the quarter ended December 31, 2021 is summarized as follows:

					Elimination of
	Manufacturing		Distribution		Intercompany Sales			Total
Industrial	$	7,085	$	1,809	$	(1,188	)	$	7,706
Land-based transmissions		12,326		6,497		(5,505	)		13,318
Marine and propulsion systems		29,861		16,659		(11,000	)		35,520
Other		26		3,326		(7	)		3,345
Total	$	49,298	$	28,291	$	(17,700	)	$	59,889

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	$	(1,309	)	$	5,286
Land-based transmissions		10,101		6,308		(4,669	)		11,740
Marine and propulsion systems		26,300		14,216		(10,381	)		30,135
Other		17		1,391		(12	)		1,396
Total	$	41,705	$	23,223	$	(16,371	)	$	48,557

Net sales by product group for the two quarters ended December 31, 2021 is summarized as follows:

					Elimination of
	Manufacturing		Distribution		Intercompany Sales			Total
Industrial	$	12,992	$	2,927	$	(2,081	)	$	13,838
Land-based transmissions		23,710		11,602		(9,752	)		25,560
Marine and propulsion systems		54,148		28,222		(20,216	)		62,154
Other		43		6,074		(19	)		6,098
Total	$	90,893	$	48,825	$	(32,068	)	$	107,650

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	$	(2,062	)	$	10,710
Land-based transmissions		20,595		12,374		(8,969	)		24,000
Marine and propulsion systems		49,479		26,975		(20,144	)		56,310
Other		33		3,701		(17	)		3,717
Total	$	80,200	$	45,729	$	(31,192	)	$	94,737