RACINE, Wis. – Twin Disc, Inc. (NASDAQ:TWIN)’s first quarter of fiscal 2008 was the best in the company’s history, it reported today in a statement.
Sales, net earnings and diluted earnings per share for the first three months of fiscal 2008, ended Sept. 28, all broke records, according to Twin Disc.
Sales for the quarter improved 11.9 percent to $73,613,000 from $65,774,000 in the same period a year ago. The results for the current fiscal quarter were led by strong sales of marine and propulsion products to the commercial marine and megayacht markets, as well as continued strong demand for land based transmission products, Twin Disc stated.
Gross margin, as a percentage of fiscal 2008 first-quarter sales, increased 1.5 percentage points to 32.4 percent from 30.9 percent in last year’s comparable period. Profitability continued to be strong during the fiscal 2008 first quarter, according to the company. For the fiscal 2007 first quarter, gross margins were negatively impacted by an unfavorable purchase accounting adjustment to inventory in the amount of $734,000. Net earnings for the fiscal 2008 first quarter increased 39.1 percent, or $1,434,000 to $5,106,000, or $0.88 per diluted share, compared with $3,672,000, or $0.62 per diluted share, for the fiscal 2007 first quarter.
Earnings before interest, taxes, depreciation and amortization increased 33.3 percent to $10,842,000 for the fiscal 2008 first quarter, from $8,136,000 for the same period last fiscal year.
The net year-over-year translation effect of the change in foreign currency exchange rates was to increase sales by $2,357,000 in the fiscal 2008 first quarter when compared to the same period in fiscal 2007. The net impact to gross profit was $455,000. This represents the net impact of favorable foreign currency translation of $740,000 and the unfavorable margin impact of a strengthening Euro on US dollar sales of our Belgian manufacturing operation of $285,000, according to the company.
“On the marine side of our business, we continued to see strong demand for our commercial and pleasure craft marine products in the quarter,” said Michael E. Batten, chairman, president and CEO. “Sales of our commercial marine gears into Southeast Asia and the Gulf Coast of the United States were particularly robust. In addition, marine propulsion system sales into the Italian megayacht market, the largest in the world, continued to expand versus the same period last year.”
“Going forward, we expect that fiscal 2008 will be another good year, as worldwide demand for our products continues in the markets we serve,” concluded Batten. “Our backlog of orders to be shipped over the next six months was $112,293,000, an increase of 12.1 percent from $100,184,000 in the same period a year ago and up 1.8 percent from $110,357,000 at fiscal 2007 year end. As a result of our current financial results and the outlook for the remainder of fiscal 2008, the Board of Directors has increased our quarterly dividend payment 27.3 percent to $0.14 per common share from $0.11 per common share.”
Twin Disc, Inc. designs, manufactures and sells marine and heavy-duty off-highway power transmission equipment. Products offered include: marine transmissions, surface drives, propellers and boat management systems, as well as power-shift transmissions, hydraulic torque converters, power take-offs, industrial clutches and control systems.
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