Twin Disc delivered a solid Q3 2024, marked by margin expansion and robust cash generation despite mixed end-market dynamics. Revenue of $74.16 million represented a 0.53% year-over-year increase and a 1.60% quarter-over-quarter uptick, while gross margins rose to 28.2% (vs. 26.1% a year ago), underscoring the benefit of previously implemented price increases and ongoing operational efficiency. Net income totaled $3.82 million ($0.27 per diluted share), and EBITDA reached $7.0 million, reflecting disciplined cost control and favorable product mix. Backlog activity improved, with management signaling a six-month backlog expansion and ongoing inventory discipline as parts of a broader effort to convert demand into revenue while preserving working capital efficiency.
Strategically, Twin Disc advanced its positioning in industrial and marine technology through the announced acquisition of Katsa Oy, a Finnish gear and gearbox specialist. Management framed this as a step to broaden global reach, drive cross-selling opportunities, and accelerate growth in hybrid/electric propulsion capabilities across marine and off-highway applications. The company also highlighted strength in Asia Pacific and Europe, with expanding sales in the Middle East (notably Turkey) linked to offshore wind initiatives, alongside a continued stabilizing trend in Marine & Propulsion demand. The Industrial segment remained challenged, while the lower-horsepower and more commoditized offerings in the Industrial line showed weakness, offsets partly by higher-value, more sophisticated products.
Looking ahead, management cautioned for a challenging year-over-year comparison in Q4 due to the prior-year period’s elevated results, but remained optimistic on margins, cash flow, and the potential for accretive growth from M&A and product innovation. Investors should monitor Katsa’s close timeline, integration progress, backlog conversion velocity, and the evolution of demand across marine, industrial, and hybrid/electrification markets as catalysts for future performance.