Note E - Business Segments

9 Months Ended

Mar. 25, 2022

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 Three Quarters Ended
	March 25, 2022			March 26, 2021			March 25, 2022			March 26, 2021
Net sales
Manufacturing segment sales	$	56,403		$	52,138		$	147,296		$	132,338
Distribution segment sales		23,660			26,221			72,485			71,950
Inter/Intra segment elimination – manufacturing		(16,672	)		(15,074	)		(40,815	)		(37,892	)
Inter/Intra segment elimination – distribution		(4,102	)		(5,645	)		(12,027	)		(14,019	)
	$	59,289		$	57,640		$	166,939		$	152,377
Net (loss) income attributable to Twin Disc
Manufacturing segment net (loss) income	$	6,000		$	2,422		$	9,230		$	(3,352	)
Distribution segment net income		1,415			697			3,396			2,352
Corporate and eliminations		(5,184	)		(3,025	)		(12,310	)		(7,198	)
	$	2,231		$	94		$	316		$	(8,198	)

Assets	March 25, 2022			June 30, 2021
Manufacturing segment assets	$	356,154		$	364,379
Distribution segment assets		54,629			46,956
Corporate assets and elimination of intercompany assets		(133,059	)		(135,922	)
	$	277,724		$	275,413

Disaggregated revenue:

The following table presents details deemed most relevant to the users of the financial statements for the quarters and three quarters ended March 25, 2022 and March 26, 2021.

Net sales by product group for the quarter ended March 25, 2022 is summarized as follows:

	Manufacturing		Distribution		Elimination of Intercompany Sales			Total
Industrial	$	7,947	$	1,449	$	(935	)	$	8,461
Land-based transmissions		17,448		7,173		(8,535	)		16,086
Marine and propulsion systems		30,820		13,108		(10,766	)		33,162
Other		188		1,930		(538	)		1,580
Total	$	56,403	$	23,660	$	(20,774	)	$	59,289

Net sales by product group for the quarter ended March 26, 2021 is summarized as follows:

	Manufacturing		Distribution		Elimination of Intercompany Sales			Total
Industrial	$	5,652	$	1,491	$	(1,307	)	$	5,836
Land-based transmissions		13,793		6,892		(5,419	)		15,266
Marine and propulsion systems		32,671		15,016		(13,951	)		33,736
Other		22		2,822		(42	)		2,802
Total	$	52,138	$	26,221	$	(20,719	)	$	57,640

Net sales by product group for the three quarters ended March 25, 2022 is summarized as follows:

	Manufacturing		Distribution		Elimination of Intercompany Sales			Total
Industrial	$	20,939	$	4,377	$	(3,016	)	$	22,300
Land-based transmissions		41,158		18,775		(18,287	)		41,646
Marine and propulsion systems		84,968		41,330		(30,983	)		95,315
Other		231		8,003		(556	)		7,678
Total	$	147,296	$	72,485	$	(52,842	)	$	166,939

Net sales by product group for the three quarters ended March 26, 2021 is summarized as follows:

	Manufacturing		Distribution		Elimination of Intercompany Sales			Total
Industrial	$	15,744	$	4,168	$	(3,369	)	$	16,543
Land-based transmissions		34,388		19,267		(14,388	)		39,267
Marine and propulsion systems		82,152		41,996		(34,095	)		90,053
Other		54		6,519		(59	)		6,514
Total	$	132,338	$	71,950	$	(51,911	)	$	152,377