Note F - Business Segments

3 Months Ended

Sep. 26, 2025

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

F. 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, energy and natural resources, government, and industrial markets.

The Company has two reportable segments: manufacturing and distribution.  Its segment structure reflects the way chief operating decision-maker (“CODM”) makes operating decisions and manages the growth and profitability of the business. It also corresponds with the CODM’s approach of allocating resources and assessing the financial performance of its segments. The Company’s CODM is the Chief Executive Officer, who reviews financial information presented on a consolidated basis. 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.  The CODM evaluates the performance of its segments based on net sales, gross profit, operating income (loss), and net income (loss).

The following table presents the selected financial information with respect to the Company’s reportable segments as of September 26, 2025:

	Manufacturing			Distribution			Corporate			Elimination and adjustments			Consolidated
Net sales:
Net sales	$	74,054		$	21,778		$	-		$	(15,836	)	$	79,996
Intra-segment sales		(2,047	)		(3,162	)		-			5,209			-
Inter-segment sales		(9,874	)		(753	)		-			10,627			-
Total consolidated net sales		62,133			17,863			-			-			79,996
Cost of goods sold:
Cost of goods sold		55,770			17,338			-			15,626			57,062
Intra-segment cost of goods sold		(2,047	)		(3,162	)		-			(5,209	)		-
Inter-segment cost of goods sold		(9,874	)		(753	)		-			(10,627	)		-
Total consoldiated cost of goods sold		43,849			13,423			-			(210	)		57,062
Gross profit		18,284			4,440			-			210			22,934
Marketing, engineering and administrative expenses		10,495			3,736			6,468			-			20,699
Operating income (loss)		7,789			704			(6,468	)		210			2,235
Other income (expense):
Interest income		398			129			482			(990	)		19
Interest expense		(1,756	)		(2	)		(32	)		990			(800	)
Other income (expense)		(3,320	)		(1,528	)		3,991			(26	)		(883	)
Total consolidated other income (expense)		(4,678	)		(1,401	)		4,441			(26	)		(1,664	)
Pretax earnings (loss)		3,111			(697	)		(2,027	)		184			571
Income tax benefit (expense)		(761	)		(225	)		17			(14	)		(983	)
Net income (loss)		2,350			(922	)		(2,010	)		170			(412	)
Minority interest		-			106			-			-			106
Net income (loss) attributable to Twin Disc, Incorporated	$	2,350		$	(1,028	)	$	(2,010	)	$	170		$	(518	)
Total consolidated assets	$	533,508		$	66,003		$	(225,825	)	$	(10,150	)	$	363,536
Depreciation and amortization	$	3,066		$	95		$	303		$	-		$	3,464
Expenditures for segment assets		2,288			370			772			-			3,430

The following table presents the selected financial information with respect to the Company’s reportable segments as of September 27, 2024:

	Manufacturing			Distribution			Corporate			Elimination and adjustments			Consolidated
Net sales:
Net sales	$	63,318		$	29,583		$	-		$	(20,004	)	$	72,897
Intra-segment sales		(858	)		(5,117	)		-			5,975			-
Inter-segment sales		(12,695	)		(1,334	)		-			14,029			-
Total consolidated net sales		49,765			23,132			-			-			72,897
Cost of goods sold:
Cost of goods sold		50,038			22,902			-		$	19,365			53,575
Intra-segment cost of goods sold		(858	)		(5,117	)		-			(5,975	)		-
Inter-segment cost of goods sold		(12,695	)		(1,334	)		-			(14,029	)		-
Total consoldiated cost of goods sold		36,485			16,451			-			(639	)		53,575
Gross profit		13,280			6,681			-			639			19,322
Marketing, engineering and administrative expenses		9,424			3,828			6,235			-			19,487
Operating income (loss)		3,856			2,853			(6,235	)		639			(165	)
Other income (expense):
Interest income		205			133			-			(299	)		39
Interest expense		(899	)		(2	)		(34	)		299			(636	)
Other income (expense)		(889	)		(1,372	)		902			(24	)		(1,383	)
Total consolidated other income (expense)		(1,583	)		(1,241	)		868			(24	)		(1,980	)
Pretax earnings (loss)		2,273			1,612			(5,367	)		615			(2,145	)
Income tax benefit (expense)		(404	)		(668	)		227			218			(627	)
Net income (loss)		1,869			944			(5,140	)		833			(2,772	)
Minority interest		-			(7	)		-			-			(7	)
Net income (loss) attributable to Twin Disc, Incorporated	$	1,869		$	951		$	(5,140	)	$	833		$	(2,765	)
Total consolidated assets	$	474,502		$	63,108		$	(203,841	)	$	(10,222	)	$	323,547
Depreciation and amortization	$	2,872		$	92		$	274		$	-		$	3,238
Expenditures for segment assets		1,713			357			292			-			2,362

Disaggregated revenue:

The following table presents details deemed most relevant to the users of the financial statements for the quarters ended September 26, 2025 and September 27, 2024.

Net sales by product group for the quarter ended September 26, 2025 is summarized as follows:

					Elimination of
	Manufacturing		Distribution		Intercompany Sales			Total
Industrial	$	10,304	$	997	$	(923	)	$	10,378
Land-based transmissions		17,880		2,951		(3,273	)		17,558
Marine and propulsion systems		45,870		13,483		(11,127	)		48,226
Other		-		4,347		(513	)		3,834
Total	$	74,054	$	21,778	$	(15,836	)	$	79,996

Net sales by product group for the quarter ended September 27, 2024 is summarized as follows:

					Elimination of
	Manufacturing		Distribution		Intercompany Sales			Total
Industrial	$	8,797	$	1,053	$	(681	)	$	9,169
Land-based transmissions		18,153		3,563		(4,432	)		17,284
Marine and propulsion systems		36,347		20,331		(14,578	)		42,100
Other		21		4,636		(313	)		4,344
Total	$	63,318	$	29,583	$	(20,004	)	$	72,897

Industrial products include clutches, power take-offs and pump drives sold to the agriculture, recycling, construction and oil and gas markets. The land-based transmission products include applications for oil field and natural gas, military and airport rescue and firefighting. The marine and propulsion systems include marine transmission, azimuth drives, controls, surface drives, and propellers for the global commercial marine, pleasure craft and patrol boat markets. Other include non-Twin Disc manufactured product sold through Company-owned distribution entities.