Twin Disc (TWIN) Fiscal Q4 2026 Earnings Call: Record Sales
Source Tradingkey
Key Takeaways
- Twin Disc reported record fiscal Q4 2026 sales of $114.4 million, up 18.3% year over year. Organic revenue increased 15.9%.
- Operating income rose 19.5% to $7.8 million, while EBITDA increased 35.1% to $11.1 million. Net income reached $9.4 million, or $0.64 per diluted share, including an income tax benefit of approximately $0.17 per share.
- Gross margin fell by approximately 600 basis points to 26.3%, reflecting product mix, tariff dilution and a $3 million favorable inventory-cost adjustment in the prior-year quarter. Tariffs reduced the latest quarter’s margin by about 60 basis points.
- Six-month backlog remained strong at $178.3 million, broadly stable from $179.5 million at the end of fiscal Q3 despite higher shipments and efforts to reduce past-due orders.
- Defense represented 17% of total backlog at fiscal year-end, up 56% year over year. Management identified defense as a durable, multi-year growth driver supported by U.S. Navy and NATO-related demand.
- Free cash flow was $17.2 million, helping reduce net debt to $13.8 million and net leverage to 0.5. The board increased the quarterly dividend by 25% to $0.05 per share.
Key Financial Data
| Metric | Fiscal Q4 2026 | Change / Commentary |
|---|---|---|
| Sales | $114.4 million | Up 18.3% year over year; record quarter |
| Organic revenue growth | 15.9% | Excludes acquisitions and foreign exchange |
| Gross profit | $30.1 million | Down 3.5% year over year |
| Gross margin | 26.3% | Down approximately 600 basis points |
| SG&A expense | $22.2 million | Down 9.8%; 19.4% of sales versus 25.5% previously |
| Operating income | $7.8 million | Up 19.5% from $6.5 million |
| Net income attributable to Twin Disc | $9.4 million | Versus $2.6 million a year earlier |
| Diluted EPS | $0.64 | Versus $0.19; included about $0.17 from a tax benefit |
| EBITDA | $11.1 million | Up 35.1%; margin increased 120 basis points to 9.7% |
| Free cash flow | $17.2 million | Meaningful sequential improvement cited by management |
| Six-month backlog | $178.3 million | Versus $179.5 million at fiscal Q3-end |
| Cash | $16.1 million | At June 30, 2026 |
| Total debt | $31.4 million | Net debt was $13.8 million |
Disclaimer: For information purposes only. Past performance is not indicative of future results.
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