Twin Disc Reports Record Revenue But Issues Margin Warning
On August 20, Twin Disc (NASDAQ:TWIN) reported strong fiscal fourth-quarter results with revenue reaching $114.4 million—up 18.3% year-over-year and a record for the company. Net income surged to $9.4 million or $0.64 per diluted share from $2.6 million in the prior year period, while free cash flow rose sharply to $17.2 million. Despite these gains, gross margin declined significantly to 26.3% from 32.3%, attributed by management to product mix shifts and tariff impacts. Defense sales now account for a growing portion of backlog due to U.S. Navy autonomous vessel programs and NATO orders through its Finnish subsidiary Katsa. The company is expanding in Finland to meet this demand. However, the drop in margins raises concerns about long-term profitability as Twin Disc aims for $500 million in revenue with 30% gross margin by 2030—goals that appear challenging given current trends.
Topics: Backlog Expansion Defense Sector Growth Earnings Gross Margin Warning