Twin Disc today reported a sales decline of almost 25 percent for its second quarter — $33.7 million, compared with $44.8 million in the year-earlier quarter.
The company also said it saw a drop in sales for the first half of its fiscal year from $82.2 million to $69.5 million.
The sales decline was primarily the result of softening demand in Asia for the company's commercial marine products, an ongoing domestic supplier transition issue delaying shipments, a reduction in global demand for industrial products and a decline in volume related to the company's oil and gas products.
"Challenging market conditions continued throughout the fiscal 2017 second quarter. However, the initiatives we have implemented to improve operating and financial efficiencies have helped us navigate a weak environment across many of our end markets,” Twin Disc president and CEO John Batten said in a statement.
Despite a 24.9 percent sales decline in the second quarter, which ended Dec. 30, the company generated positive operating cash flow, Batten said.
“We remain focused on proactively adjusting our cost structure for changes in demand, working with customers to provide exceptional service and developing next-generation products that will drive higher market share once our markets recover,” Batten said.
“As oil and gas prices have stabilized and started to slowly improve, we are cautiously optimistic that demand in the oil and gas market, as well as adjacent markets in which we operate, will begin to benefit our results in the second half of fiscal 2017."
Gross margin in the second quarter was 26.6 percent, compared with 25.9 percent in the same period last year.
The company reported a net loss for the quarter of $2.9 million, or 26 cents a share, compared with $2.3 million, or 21 cents a share, in the year-earlier quarter.
For the first half of the fiscal year, Twin Disc said it had a net loss of $5.6 million, or 50 cents a share, compared with $6.6 million, or 59 cents a share, for the first half of fiscal 2016.