Twin Disc today reported $72.5 million in sales for its fiscal fourth quarter ended June 30, 2019, a 1.8 percent decrease compared to the same period a year ago. The company reported a net loss of $822,000 compared to net income of $9.5 million a year ago.
Twin Disc said in a statement that the decrease in sales was primarily due to lower demand for its 8500 series transmission systems for North American fracking customers. The lower sales were partially offset in growth from its marine and industrial markets as well as the contribution of Veth Propulsion, the marine transmission manufacturer it acquired last year.
John H. Batten, CEO, said “operational challenges associated with manufacturing and supply chain issues,” and a “weak oil and gas environment” hurt fourth-quarter profits.
The company reported its marine sales jumped in fiscal 2019 by 8 percent to 38 percent of total sales.
“The Veth Propulsion acquisition was an important milestone and its fiscal 2019 financial performance was in line with our initial expectations,” added Batten. “During fiscal 2019, we have completed most of the integration of Veth Propulsion, expanded Veth’s presence in the U.S. and improved our mix of marine sales. In fact, Veth’s backlog has increased approximately 30 percent since we acquired the business in July 2018.”
Twin Disc’s fiscal 2019 annual sales were up 25.7 percent to $302.7 million. The company finished the year with $10.7 million in net income, compared to $9.5 million a year ago.
“As we enter the new fiscal year, we are focused on improving our performance, investing in our operations, and creating an infrastructure to support Twin Disc for the future,” said Batten. “Components of this plan include our new operations facility in Texas, which is scheduled to open in the first calendar quarter of 2020, and our expanded Wisconsin distribution center, which is now running at peak performance.”
The company’s six-month backlog at June 30, 2019 was $99,593,000, compared to $113,703,000 at March 29, 2019 and $114,979,000 at June 30, 2018.
“Despite the near-term market and operational challenges, we believe we are headed in the right direction to support our business and create shareholder value for the long-term,” said Batten.