Twin Disc said sales dropped 12 percent in its second quarter because the company had less business in North America and Europe and its sales to customers serving the global megayacht market stayed at historical lows.
Sales fell to $63.2 million for the quarter that ended Dec. 27 from $72.3 million in the same quarter last year. For the fiscal year to date, sales were $129.6 million, compared with $141.1 million the previous year.
Profits for the quarter were sharply lower. The company said it earned $518,000, or 5 cents a diluted share, compared with $3.34 million, or 29 cents a share, in the quarter a year earlier.
Offsetting the company’s lagging sales in North America and Europe were higher shipments to customers in Asian markets. Twin Disc also said demand remained steady for equipment used in the industrial, airport rescue and firefighting markets.
Gross margin for the second quarter was 29.3 percent, compared with 30.8 percent in the quarter a year earlier. The decrease in second-quarter gross margin this year was the result of lower sales volume and a less profitable mix of business, the company said.
“Unfavorable trends in the North American pressure-pumping market continue to weigh on our financial results,” president and CEO John Batten said in a statement. “To help insulate our business from product and geographic downturns, we have focused our efforts on improving our product and geographic diversity. Commercial marine and oil and gas sales to customers in Asia remain strong, and we continue to set record sales for the region. We remain focused on business strategies that diversify sales, improve profitability, invest in our facilities and continue new-product development while conservatively managing our balance sheet.”