RACINE, Wis. – Twin Disc, Inc. (NASDAQ:TWIN) is so pleased with how its current business is performing in fiscal 2006 that it wants to acquire other companies, it reported in a recent statement.
The company manufactures marine transmissions, surface drives and propellers as well as products for a range of other markets. Twin Disc didn’t disclose whether its acquisition plans involve its marine business.
Sales for the quarter ended December 31, 2005, improved 4.2 percent to $57,051,000 from $54,731,000 in the same period a year ago. Year to date, sales increased 6.5 percent to $106,628,000 from $100,113,000 in the fiscal 2005 first half. Sales continue to benefit from strong demand across all the markets the company serves, especially from its oilfield, military, and commercial marine customers, Twin Disc reported.
Gross margin as a percentage of sales increased 2.6 percentage points to 28.1 percent from 25.5 percent in last year's comparable period. For the fiscal 2006 first half, gross margin as a percentage of sales increased 2.9 percentage points to 28.5 percent from 25.6 percent in the same period last year. The increase in gross margins is a result of a shift in product mix to higher margin items, selective price increases, improved absorption due to higher volume at the company's domestic manufacturing operation, and previously announced cost reduction programs, according to Twin Disc.
Net earnings for the second quarter increased 123.6 percent, or $1,376,000, to $2,489,000, or $0.84 per diluted share, compared with $1,113,000, or $0.38 per diluted share, for the fiscal 2005 second quarter. For the fiscal 2006 first half, net earnings increased 127.1 percent to $4,974,000, or $1.70 per diluted share, compared with $2,190,000, or $0.76 per diluted share, in the fiscal 2005 first half.
"Fiscal 2006 is turning out to be one of the best years in the company's 87 year history,” stated Michael E. Batten, chairman and chief executive officer. “We are extremely pleased with the positive momentum as this was the best second quarter of sales since 1982, and the best second quarter for net earnings since 1989. With our trailing twelve-month sales and earnings now at $224,987,000 and $3.31 per diluted share, respectively, we are confident about the financial outlook for fiscal 2006. We are encouraged with our financial growth and are seeking acquisitions to further expand our internal businesses."
In related news, the company reported that Michael H. Joyce (65), president and chief operating officer, has elected to retire effective July 31. He will also resign from the Board of Directors on the same date.
Joyce's retirement is part of a board supported multi-year succession plan, according to the company. During this next phase, while Batten will take on the title of president in addition to chairman - chief executive officer, Messrs. James Feiertag, executive vice president, in charge of North American operations and global Transmission and Industrial Sales and Marketing and John Batten, executive vice president in charge of European Operations and global Marine Propulsion Sales and Marketing, will assume full operating responsibilities in their respective areas. The remaining officer team that reported to Joyce will report to Michael Batten.
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