# EDGAR Filing Document

**Accession Number:** 0000100378
**File Stem:** 0001437749-25-027486
**Filing Date:** 2025-8
**Character Count:** 30383
**Document Hash:** ef9c9c2ce9bcf24b3e729afb8068cf4b
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001437749-25-027486.hdr.sgml**: 20250821

**ACCESSION NUMBER**: 0001437749-25-027486

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 16

**CONFORMED PERIOD OF REPORT**: 20250821

**ITEM INFORMATION**: Results of Operations and Financial Condition

**ITEM INFORMATION**: Regulation FD Disclosure

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20250821

**DATE AS OF CHANGE**: 20250821

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** TWIN DISC INC
- **CENTRAL INDEX KEY:** 0000100378
- **STANDARD INDUSTRIAL CLASSIFICATION:** GENERAL INDUSTRIAL MACHINERY & EQUIPMENT [3560]
- **ORGANIZATION NAME:** 06 Technology
- **EIN:** 390667110
- **STATE OF INCORPORATION:** WI
- **FISCAL YEAR END:** 0630

**FILING VALUES:**
- **FORM TYPE:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-07635
- **FILM NUMBER:** 251238460

**BUSINESS ADDRESS:**
- **STREET 1:** 1328 RACINE ST
- **CITY:** RACINE
- **STATE:** WI
- **ZIP:** 53403
- **BUSINESS PHONE:** 2626384000

**MAIL ADDRESS:**
- **STREET 1:** 1328 RACINE STREET
- **CITY:** RACINE
- **STATE:** WI
- **ZIP:** 53403

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** TWIN DISC CLUTCH CO
- **DATE OF NAME CHANGE:** 19770217

?xml version='1.0' encoding='ASCII'? twin20250819_8k.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

**FORM 8-K**

Current Report Pursuant to Section 13 or 15(d) of

The Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported) **<u>August 21, 2025</u>**

**<u>TWIN DISC, INCORPORATED</u>**

(exact name of registrant as specified in its charter)

---

| | | |
|:---|:---|:---|
| **<u>Wisconsin</u>** | **<u>001-7635</u>** | **<u>39-0667110</u>** |
| (State or other jurisdiction | (Commission | (IRS Employer |
| of incorporation) | File Number) | Identification No.) |

---

**<u>222 East Erie Street, Suite 400</u>**&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **<u>Milwaukee, Wisconsin 53202</u>**

(Address of principal executive offices)

Registrant's telephone number, including area code:&nbsp;&nbsp;&nbsp;&nbsp; **<u>(262) 638-4000</u>**

------

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Exchange Act:

---

| | | |
|:---|:---|:---|
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
| Common Stock (No Par Value) | TWIN | The NASDAQ Stock Market LLC |

---

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

☐

------

**Item 2.02**&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Results of Operations and Financial Condition**

Twin Disc, Incorporated (the "Company") has reported its fourth quarter and full year 2025 financial results. The Company's press release dated August 21, 2025 announcing the results is attached hereto as Exhibit 99.1 and is incorporated herein in its entirety by reference.

The information set forth in this Item 2.02 of Form 8-K, including Exhibit 99.1, is furnished pursuant to Item 2.02 and shall not be deemed "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

**Item 7.01**&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Regulation FD Disclosure**

The information set forth under Item 2.02 of this report is incorporated herein by reference solely for the purposes of this Item 7.01.

The information set forth in this Item 7.01 of Form 8-K is furnished pursuant to Item 7.01 and shall not be deemed "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

FORWARD LOOKING STATEMENTS

The disclosures in this report on Form 8-K and in the documents incorporated herein by reference contain or may contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. The words "believes," "expects," "intends," "plans," "anticipates," "hopes," "likely," "will," and similar expressions identify such forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause the actual results, performance or achievements of the Company (or entities in which the Company has interests), or industry results, to differ materially from future results, performance or achievements expressed or implied by such forward-looking statements. Certain factors that could cause the Company's actual future results to differ materially from those discussed are noted in connection with such statements, but other unanticipated factors could arise. Certain risks regarding the Company's forward-looking statement are discussed in the Company's filings with the Securities and Exchange Commission, including an extensive discussion of these risks in the Company's Annual Report on Form 10-K for the year ended June 30, 2023. Readers are cautioned not to place undue reliance on these forward-looking statements which reflect management's view only as of the date of this Form 8-K. The Company undertakes no obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events, conditions or circumstances.

------

**Item 9.01**&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Financial Statements and Exhibits**

(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Exhibits

---

| | |
|:---|:---|
| EXHIBIT NUMBER | DESCRIPTION |
| 99.1 | [Press Release announcing fourth quarter and full year 2025 financial results.](ex_855273.htm) |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |

---

------

**SIGNATURE**

Pursuant to the requirements of section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

---

| | |
|:---|:---|
| Date: August 21, 2025 | Twin Disc, Inc. |
|  | <u>/s/ JEFFREY S. KNUTSON</u> |
|  | Jeffrey S. Knutson |
|  | Vice President-Finance, Chief Financial Officer, Treasurer & Secretary |

---

## Exhibit 99.1

**Exhibit 99.1**

![ex_855273img001.jpg](ex_855273img001.jpg)

**Twin Disc Announces Full Year and Fourth Quarter Results**

MILWAUKEE, Wis., August 21, 2025 (GLOBE NEWSWIRE) -- **Twin Disc, Inc. (NASDAQ: TWIN)** today reported results for the fourth quarter and full fiscal year 2025 ended June 30, 2025.

**<u>Fiscal Full Year 2025 Highlights</u>**

● *Sales increased 15.5% year-over-year to $340.7 million* 

● *Net loss attributable to Twin Disc was ($1.9) million* 

● *EBITDA\* of $19.0 million, including the impact from currency translation loss, stock based compensation, and other items* 

● *Operating cash flow of $24.0 million and Free cash flow\* of $8.8 million* 

● *Healthy six-month backlog of $150.5 million supported by strong ongoing order activity* 

**<u>Fiscal Fourth Quarter 2025 Highlights</u>**

● *Sales increased 14.5% year-over-year to $96.7 million* 

● *Net income attributable to Twin Disc was $1.4 million* 

● *EBITDA\* of $7.0 million, including the impact from currency translation loss, stock based compensation, and other items* 

● *Operating cash flow of $16.4 million and Free cash flow\* of $8.7 million* 

**<u>CEO Perspective</u>**

"We closed out the fiscal year with our strongest quarter, a reflection of the team's consistent execution and resilience in dynamic markets. Marine and Propulsion led the way with robust defense-driven demand, while Industrial saw steady recovery and increased shipments late in the year. Although oil and gas remained challenged, we continued to advance our electrification strategy with new e-frac activity. Throughout the year, we maintained pricing discipline and protected margins, even as we managed through tariff noise and ongoing cost pressures. Our recent acquisitions expanded our global footprint and diversified our end markets, reinforcing the strength of our platform," commented John H. Batten, President and Chief Executive Officer of Twin Disc.

"As we enter the new fiscal year, we are in a stronger position both operationally and strategically, supported by a healthy backlog, greater organizational agility, and our integration efforts that are creating new commercial opportunities across regions and segments. Our established presence in the defense market, reinforced by a steady flow of strong customer inquiries, positions us to capture additional growth. Looking ahead, we are committed to driving growth, maintaining disciplined operations, and executing on our long-term value creation strategy," concluded Mr. Batten.

**<u>Fourth Quarter and Full-Year Results</u>**

Sales for the fiscal 2025 fourth quarter increased 14.5% year-over-year to $96.7 million and fiscal 2025 full year sales increased 15.4% to $340.7 million when compared to the prior year. Fourth quarter and full year sales growth were both driven by demand for the Company's Land-Based Transmissions markets, with strength in Marine and Propulsion Systems and a stabilization in the Industrial segment. On an organic basis\*, which excludes the impacts of acquisitions and foreign currency exchange, fourth quarter revenue decreased 8.4% year-over-year, due primarily to reduced shipments of oil and gas transmissions into China. For the fiscal 2025 full year, revenue increased 1.0% on an organic basis when compared to the prior year.

Sales by product group (certain amounts have been reclassified from Marine and Propulsion to Other):

---

| | | | |
|:---|:---|:---|:---|
| **Product Group** | **Q4 FY25 Sales** | **Q4 FY24 Sales** | **Change (%)** |
| **(Thousands of $):** |  |  |  |
| Marine and Propulsion Systems | $53011 | $47228 | 12.2% |
| Land-Based Transmissions | 26122 | 24989 | 4.5% |
| Industrial | 13141 | 7219 | 82.0% |
| Other | 4404 | 4982 | -11.6% |
| **Total** | $96678 | $84418 | 14.5% |

---

------

---

| | | | |
|:---|:---|:---|:---|
| **Product Group** | **FY25 Sales** | **FY24 Sales** | **Change (%)** |
| **(Thousands of $):** |  |  |  |
| Marine and Propulsion Systems | $201101 | $171765 | 17.1% |
| Land-Based Transmissions | 80192 | 78519 | 2.1% |
| Industrial | 41502 | 25669 | 61.7% |
| Other | 17943 | 19174 | (6.4%) |
| **Total** | $340738 | $295127 | 15.5% |

---

For the fiscal 2025 full year, Twin Disc delivered double-digit growth year-over-year in the European and Asia-Pacific regions including the impact of acquisitions. The distribution of sales across geographical regions shifted, with a greater proportion of sales coming from Europe, and a lower proportion coming from the Asia-Pacific region.

Gross profit increased 19.7% to $30.0 million compared to $25.1 million for the fourth quarter of fiscal 2025. Fourth quarter gross margin improved approximately 130 basis points to 31.0% from the prior year period,<u> </u>supported by a favorable product mix and one-time cost capitalization adjustments in Katsa inventory. For the fiscal 2025 full year, gross profit increased 11.3% to $92.7 million, and gross margin decreased approximately 100 basis points to 27.2%.

Marketing, engineering and administrative (ME&A) expenses increased by $4.3 million, or 20.9%, to $24.6 million, compared to $20.4 million in the prior year period. The increased ME&A expense was primarily driven by the addition of Katsa and Kobelt, in addition to an increase in professional fees and an inflationary impact on wages and benefits. For the fiscal 2025 full year, ME&A expense increased 15.1% to $82.4 million, primarily driven by the same factors driving the fourth quarter increase, noted above.

Net income attributable to Twin Disc for the fourth quarter of fiscal 2025 was $1.4 million, or $0.10 per diluted share, compared to net income attributable to Twin Disc of $7.4 million, or $0.53 per diluted share, for the fourth quarter of fiscal 2024. For the fiscal 2025 full year, the Company generated a net loss attributable to Twin Disc of ($1.9 million), or ($0.14) per diluted share, a decrease of 116.8% and 116.5%, respectively, from fiscal 2024 full year. Earnings before interest, taxes, depreciation, and amortization (EBITDA) were $7.0 million in the fourth quarter, down 40.4% compared to the fourth quarter of fiscal 2024. The year-over-year change was driven by increased currency translation losses, higher operating expenses, and stock based compensation. Full year fiscal 2025 EBITDA decreased 28.3% to $19.0 million from $26.5 million in fiscal 2024. This change was driven by increased currency translation losses, stock based compensation, and inventory adjustments.

Certain items impacting EBITDA for the fourth quarter and full year of fiscal 2025 and 2024 include:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **(Thousands of $):** | **Q4 FY25**  | **Q4 FY24**  | **FY25**  | **FY24**  |
| Restructuring | $52 | $11 | $408 | $218 |
| Non-cash stock based compensation | 1389 | 1373 | 4068 | 3383 |
| Non-cash strategic inventory write-down |  |  | 1579 | 3099 |
| Acquisition costs | 40 | 488 | 839 | 856 |
| Non-cash bargain purchase gain |  | (3724) |  | (3724) |
| Currency translation (gain)/loss | 2935 | (703) | 4825 | (377) |
| Non-cash defined benefit pension amortization | 191 | (258) | 885 | (1076) |

---

On a consolidated basis, the backlog of orders to be shipped over the next six months is approximately $150.5 million at the end of the fourth quarter, compared to $133.7 million at the end of the third quarter. As a percentage of six-month backlog, inventory decreased from 103.2% at the end of the third quarter, to 101.0% at the end of the fourth quarter. Compared to the end of fiscal 2024, cash decreased 19.7% to $16.1 million, total debt increased 21.8% to $31.4 million, and net debt\* increased $9.6 million to $15.3 million. The increase was primarily attributable to higher long-term debt related to the Katsa and Kobelt acquisitions.

**<u>CFO Perspective</u>**

Jeffrey S. Knutson, Vice President of Finance, Chief Financial Officer, Treasurer and Secretary, stated, "We're pleased with our financial performance this year, marked by disciplined execution and strong integration progress. Our inventory is well positioned to support demand heading into the new year, and our cash position remains healthy, giving us flexibility to invest in growth while maintaining a strong balance sheet. With continued progress on global manufacturing optimization, we're well equipped to scale efficiently and support sustainable profitability."

------

**<u>Discussion of Results</u>**

Twin Disc will host a conference call to discuss these results and to answer questions at 9:00 a.m. Eastern time on August 21, 2025. The live audio webcast will be available on Twin Disc's website at <u>https://ir.twindisc.com</u>. To participate in the conference call, please dial (646) 307-1963 approximately ten minutes before the call is scheduled to begin. A replay of the webcast will be available at <u>https://ir.twindisc.com</u> shortly after the call until August 21, 2026.

**<u>About Twin Disc</u>**

Twin Disc, Inc. designs, manufactures, and sells marine and heavy-duty off-highway power transmission equipment. Products offered include marine transmissions, azimuth drives, surface drives, propellers, and boat management systems, as well as power-shift transmissions, hydraulic torque converters, power take-offs, industrial clutches, and control systems. The Company sells its products to customers primarily in the pleasure craft, commercial and military marine markets, as well as in the energy and natural resources, government, and industrial markets. The Company's worldwide sales to both domestic and foreign customers are transacted through a direct sales force and a distributor network. For more information, please visit <u>www.twindisc.com</u>.

**<u>Forward-Looking Statements</u>**

This press release may contain statements that are forward looking as defined by the Securities and Exchange Commission in its rules, regulations, and releases. The words "anticipates," "believes," "intends," "estimates," and "expects," or similar anticipatory expressions, usually identify forward-looking statements. The Company intends that such forward-looking statements qualify for the safe harbors from liability established by the Private Securities Litigation Reform Act of 1995. All forward-looking statements are based on current expectations and are subject to certain risks and uncertainties that could cause actual results or outcomes to differ materially from current expectations. Such risks and uncertainties include the impact of general economic conditions and the cyclical nature of many of the Company's product markets; foreign currency risks and other risks associated with the Company's international sales and operations; the ability of the Company to successfully implement price increases to offset increasing commodity costs; the ability of the Company to generate sufficient cash to pay its indebtedness as it becomes due; and the possibility of unforeseen tax consequences and the impact of tax reform in the U.S. or other jurisdictions. These and other risks are described under the caption "Risk Factors" in Item 1A of the Company's most recent Form 10-K filed with the Securities and Exchange Commission, as supplemented in subsequent periodic reports filed with the Securities and Exchange Commission. Accordingly, the making of such statements should not be regarded as a representation by the Company or any other person that the results expressed therein will be achieved. The Company assumes no obligation, and disclaims any obligation, to publicly update or revise any forward-looking statements to reflect subsequent events, new information, or otherwise.

------

**<u>\*Non-GAAP Financial Information</u>**

Financial information excluding the impact of asset impairments, restructuring charges, foreign currency exchange rate changes and the impact of acquisitions, if any, in this press release are not measures that are defined in U.S. Generally Accepted Accounting Principles ("GAAP"). These items are measures that management believes are important to adjust for in order to have a meaningful comparison to prior and future periods and to provide a basis for future projections and for estimating our earnings growth prospects. Non-GAAP measures are used by management as a performance measure to judge profitability of our business absent the impact of foreign currency exchange rate changes and acquisitions. Management analyzes the company's business performance and trends excluding these amounts. These measures, as well as EBITDA, provide a more consistent view of performance than the closest GAAP equivalent for management and investors. Management compensates for this by using these measures in combination with the GAAP measures. The presentation of the non-GAAP measures in this press release are made alongside the most directly comparable GAAP measures.

**<u>Definitions</u>**

Organic net sales is defined respectively as net sales excluding the recent acquisitions of Katsa and Kobelt while adjusting for the effects of foreign currency exchange.

Earnings before interest, taxes, depreciation, and amortization (EBITDA) is calculated as net earnings or loss excluding interest expense, the provision or benefit for income taxes, depreciation, and amortization expenses.

Net debt is calculated as total debt less cash.

Free cash flow is calculated as net cash provided (used) by operating activities less acquisition of fixed assets.

Investors:

Riveron

TwinDiscIR@Riveron.com

![ex_855273img002.jpg](ex_855273img002.jpg)

Source: Twin Disc, Incorporated

------

**CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND** 

**COMPREHENSIVE INCOME (LOSS)**

(In thousands, except per-share data; unaudited)

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | For the Quarter Ended | For the Quarter Ended | For the Year Ended | For the Year Ended |
|  | June 30, 2025 | June 30, 2024 | June 30, 2025 | June 30, 2024 |
| Net sales | $96678 | $84418 | $340738 | $295127 |
| Cost of goods sold | 66660 | 59332 | 246433 | 208709 |
| Cost of goods sold - Other |  |  | 1579 | 3099 |
| Gross profit | 30018 | 25086 | 92726 | 83319 |
| Marketing, engineering, and administrative expenses | 24620 | 20356 | 82431 | 71622 |
| Restructuring expenses | 53 | 11 | 408 | 218 |
| Income from operations | 5345 | 4719 | 9887 | 11479 |
| Other (expense) income: |  |  |  |  |
| Interest expense | (855) | (394) | (2646) | (1443) |
| Bargain purchase gain |  | 3724 |  | 3724 |
| Other (expense) income, net | (2947) | 961 | (5472) | 1607 |
|  | (3802) | 4291 | (8118) | 3888 |
| Income before income taxes and noncontrolling interest | 1543 | 9010 | 1769 | 15367 |
| Income tax expense | 47 | 1515 | 3368 | 4121 |
| Net income (loss) | 1496 | 7495 | (1599) | 11246 |
| Less: Net earnings attributable to noncontrolling interest, net of tax | (72) | (85) | (295) | (258) |
| Net income (loss) attributable to Twin Disc, Incorporated | $1424 | $7410 | $(1894) | $10988 |
| Dividends per share | $0.04 | $0.04 | $0.16 | $0.12 |
| Income (loss) per share data: |  |  |  |  |
| Basic income (loss) per share attributable to Twin Disc, Incorporated common shareholders | $0.10 | $0.54 | $(0.14) | $0.80 |
| Diluted income (loss) per share attributable to Twin Disc, Incorporated common shareholders | $0.10 | $0.53 | $(0.14) | $0.79 |
| Weighted average shares outstanding data: |  |  |  |  |
| Basic shares outstanding | 13897 | 13748 | 13856 | 13683 |
| Diluted shares outstanding | 13971 | 13911 | 13856 | 13877 |
| Comprehensive income |  |  |  |  |
| Net income (loss) | $1496 | $7495 | $(1599) | $11246 |
| Benefit plan adjustments, net of income taxes | (2153) | (191) | (3399) | (2114) |
| Foreign currency translation adjustment | 16120 | 1587 | 15924 | 657 |
| Unrealized (loss) gain on hedges, net of income taxes | (1491) | 120 | (1851) | 46 |
| Comprehensive income | 13972 | 9011 | 9075 | 9835 |
| Less: Comprehensive (loss) income attributable to noncontrolling interest | 158 | (42) | 334 | 182 |
| Comprehensive income attributable to Twin Disc, Incorporated | $13814 | $9053 | $8741 | $9653 |

---

------

**RECONCILIATION OF CONSOLIDATED NET (LOSS) INCOME TO EBITDA**

(In thousands; unaudited)

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | For the Quarter Ended | For the Quarter Ended | For the Year Ended | For the Year Ended |
|  | June 30, 2025 | June 30, 2024 | June 30, 2025 | June 30, 2024 |
| Net income (loss) attributable to Twin Disc, Incorporated | $1424 | $7410 | $(1894) | $10988 |
| Interest expense | 855 | 394 | 2646 | 1443 |
| Income tax expense | 47 | 1515 | 3368 | 4121 |
| Depreciation and amortization | 4705 | 2484 | 14899 | 9981 |
| Earnings before interest, taxes, depreciation and amortization (EBITDA) | $7031 | $11803 | $19019 | $26533 |

---

**RECONCILIATION OF TOTAL DEBT TO NET DEBT**

(In thousands; unaudited)

---

| | | |
|:---|:---|:---|
|  | June 30, 2025 | June 30, 2024 |
| Current maturities of long-term debt | $3000 | $2000 |
| Long-term debt | 28446 | 23811 |
| Total debt | 31446 | 25811 |
| Less cash | 16109 | 20070 |
| Net debt | $15337 | $5741 |

---

---

| |
|:---|
| **RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW**  |
| (In thousands; unaudited) |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | For the Quarter Ended | For the Quarter Ended | For the Year Ended | For the Year Ended |
|  | June 30, 2025 | June 30, 2024 | June 30, 2025 | June 30, 2024 |
| Net cash provided by operating activities | $16448 | $11499 | $23979 | $33716 |
| Acquisition of property, plant, and equipment | (7705) | (1109) | (15157) | (8707) |
| Free cash flow | $8743 | $10390 | $8822 | $25009 |

---

------

**RECONCILIATION OF REPORTED NET SALES TO ORGANIC NET SALES**

(In thousands; unaudited)

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | For the Quarter Ended | For the Quarter Ended | For the Year Ended | For the Year Ended |
|  | June 30, 2025 | June 30, 2024 | June 30, 2025 | June 30, 2024 |
| Net Sales | $96678 | $84418 | $340738 | $295127 |
| Less: Acquisitions/Divestitures | (16457) |  | (43973) | (2556) |
| Less: Foreign Currency Impact | (2915) |  | (1423) |  |
| Organic Net Sales | $77306 | $84418 | $295342 | $292571 |

---

------

**CONDENSED CONSOLIDATED BALANCE SHEETS**

(In thousands; except share amounts, unaudited)

---

| | | |
|:---|:---|:---|
|  | June 30, 2025 | June 30, 2024 |
| ASSETS |  |  |
| Current assets: |  |  |
| Cash | $16109 | $20070 |
| Trade accounts receivable, net | 58941 | 52207 |
| Inventories, net | 151951 | 130484 |
| Other current assets | 19914 | 16870 |
| Total current assets | 246915 | 219631 |
| Property, plant and equipment, net | 69576 | 58074 |
| Right-of-use assets operating lease assets | 17250 | 16622 |
| Goodwill | 2892 |  |
| Intangible assets, net | 13361 | 12686 |
| Deferred income taxes | 2812 | 2339 |
| Other noncurrent assets | 2756 | 2706 |
| Total assets | $355562 | $312058 |
| LIABILITIES AND EQUITY |  |  |
| Current liabilities: |  |  |
| Current maturities of long-term debt | $3000 | $2000 |
| Current maturities of right-of use operating lease obligations | 3393 | 2521 |
| Accounts payable | 38745 | 32586 |
| Accrued liabilities | 80655 | 62409 |
| Total current liabilities | 125793 | 99516 |
| Long-term debt | 28446 | 23811 |
| Right-of-use lease obligations | 14357 | 14376 |
| Accrued retirement benefits | 11832 | 7854 |
| Deferred income taxes | 4320 | 5340 |
| Other long-term liabilities | 6423 | 6107 |
| Total liabilities | 191171 | 157004 |
| Twin Disc, Incorporated shareholders' equity: |  |  |
| Preferred shares authorized: 200,000; issued: none; no par value |  |  |
| Common shares authorized: 30,000,000; issued: 14,632,802; no par value | 42269 | 41798 |
| Retained earnings | 125414 | 129592 |
| Accumulated other comprehensive loss | 3730 | (6905) |
|  | 171413 | 164485 |
| Less treasury stock, at cost (482,181 and 637,778 shares, respectively) | 7402 | 9783 |
| Total Twin Disc, Incorporated shareholders' equity | 164011 | 154702 |
| Noncontrolling interest | 380 | 352 |
| Total equity | 164391 | 155054 |
| Total liabilities and equity | $355562 | $312058 |

---

------

**CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS**

(In thousands; unaudited)

---

| | | |
|:---|:---|:---|
|  | June 30, 2025 | June 30, 2024 |
| CASH FLOWS FROM OPERATING ACTIVITIES: |  |  |
| Net (loss) income | $(1599) | $11246 |
| Adjustments to reconcile net (loss) income to net cash provided by operating activities: |  |  |
| Depreciation and amortization | 14899 | 9981 |
| Gain on sale of assets | (98) | (91) |
| Loss on write-down of industrial product inventory | 1579 |  |
| Loss on sale of boat management product line and related inventory |  | 3099 |
| Gain on Katsa acquisition |  | (3724) |
| Restructuring charges | 39 | (82) |
| Benefit for deferred income taxes | (1581) | (560) |
| Stock compensation expense and other non-cash changes, net | 4107 | 3836 |
| Net change in operating assets and liabilities | 6633 | 10011 |
| Net cash provided by operating activities | 23979 | 33716 |
| CASH FLOWS FROM INVESTING ACTIVITIES: |  |  |
| Acquisition of property, plant, and equipment | (15157) | (8707) |
| Acquisition of Katsa, less cash acquired | (17236) |  |
| Acquisition of Kobelt, less cash acquired |  | (23178) |
| Proceeds from sale of property, plant, and equipment | 147 |  |
| Other, net | (653) | (184) |
| Net cash used by investing activities | (32899) | (32069) |
| CASH FLOWS FROM FINANCING ACTIVITIES: |  |  |
| Borrowings under long-term debt agreement | 6500 |  |
| Borrowings under revolving loan arrangements | 122264 | 90534 |
| Repayments of revolving loan arrangements | (122264) | (81109) |
| Repayments of other long-term debt | (2500) | (2010) |
| Dividends paid to shareholders | (2284) | (1695) |
| Dividends paid to noncontrolling interest | (306) | (254) |
| Payments of right-of-use finance lease obligations | (1119) | (921) |
| Payments of withholding taxes on stock compensation | (1256) | (1791) |
| Net cash (used) provided by financing activities | (965) | 2754 |
| Effect of exchange rate changes on cash | 5924 | 2406 |
| Net change in cash | (3961) | 6807 |
| Cash: |  |  |
| Beginning of period | 20070 | 13263 |
| End of period | $16109 | $20070 |

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