Twin Disc Inc (TWIN) 2025 Q1 法說會逐字稿

Thank you for standing by. My name is Andrea and I will be your conference operator today. At this time, I would like to welcome everyone to the Twin Disc Incorporated fiscal first quarter, 2025 conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again, I would now like to turn the call over to Jeffrey Knutson Twin. This CFO thank you. Please go ahead.

謝謝你的支持。我叫安德里亞，今天我將擔任你們的會議操作員。此時，我謹歡迎大家參加 Twin Disc Incorporated 2025 財年第一季電話會議。所有線路均已靜音，以防止任何背景噪音。演講者發言後，將進行問答環節。如果您想在此期間提出問題，只需按電話鍵盤上的星號，然後再按數字 1 即可。如果您想撤回問題，請再次按星號 1，我現在想將電話轉給傑弗裡·克努森·特溫 (Jeffrey Knutson Twin)。這位財務長謝謝你。請繼續。

Good morning and thank you for joining us today to discuss our fiscal 2025 1st quarter results on the call with me today is John that for the CEO. I would like to remind everyone that certain statements made during this conference call, especially statements, expressing hopes to expectations or predictions for the future are forward-looking statements. It is important to remember that the company's actual results could differ materially from those projected in such forward-looking statements.

早安，感謝您今天加入我們，與我一起討論我們的 2025 財年第一季業績，今天與我通話的是執行長約翰。我想提醒大家的是，本次電話會議中所做的某些陳述，尤其是表達對未來的希望、期望或預測的陳述，均屬於前瞻性陳述。重要的是要記住，公司的實際結果可能與此類前瞻性聲明中的預測有重大差異。

Information concerning factors that could cause actual results to differ materially from those in the forward-looking statements are contained in the company's annual report on form 10-K copies of which may be obtained by contacting either the company or the SEC any forward-looking statements that are made during this call are based on assumptions as of today. And the company undertakes no obligation to publicly update or revise these statements to reflect subsequent events or new information during today's call management will also discuss certain non-GAAP financial measures for a definition of non-GAAP financial measures and a reconciliation of GAAP and non-GAAP financial results. Please see the earnings release issued earlier today by now. You should have received the news release which was issued this morning before the market opened. If you have not received a copy, please call our office at 262,638 4,000 and we will send the release to you.

有關可能導致實際結果與前瞻性陳述中的結果有重大差異的因素的資訊包含在公司 10-K 表格的年度報告中，可以透過聯絡公司或 SEC 取得任何前瞻性陳述的副本。所做的一切都是基於今天的假設。公司沒有義務公開更新或修改這些報表以反映後續事件或新信息，在今天的電話會議期間，管理層還將討論某些非GAAP 財務指標，以確定非GAAP 財務指標的定義以及GAAP 和非GAAP 的調節。請立即查看今天早些時候發布的收益報告。您應該已經收到今天早上開市前發布的新聞稿。如果您尚未收到副本，請致電我們的辦公室：262,638 4,000，我們會將新聞稿發送給您。

Now, I'll turn the call over to John.

現在，我將把電話轉給約翰。

Good morning, everyone and welcome to our fiscal 2025 1st quarter conference call begin. I'd like to walk through some of the quarter's highlights.

大家早安，歡迎參加我們即將開始的 2025 財年第一季電話會議。我想介紹一下本季的一些亮點。

We are pleased to report a strong start to the year with double digit revenue growth in the first quarter. We are making progress in advancing our long term strategy of becoming a leading provider of hybrid electrification solutions as we deepen our relationships with major OEM and continue to expand that reach on a global scale.

我們很高興地報告今年開局強勁，第一季營收成長兩位數。隨著我們加深與主要原始設備製造商的關係並繼續擴大在全球範圍內的影響力，我們在推動成為混合動力電氣化解決方案領先供應商的長期策略方面取得了進展。

Our performance in the quarter was primarily driven by the impact of the acquisition of Costa oil along with growth in our marine and propulsion business where demand for that remains exceptionally strong. As many of you recall, we took proactive steps in fiscal 2024 to build up inventory within that in anticipation of increased demand which has since materialized and market demand in our industrial business is stabilizing. However, the business grew this quarter largely due to the addition of CASA.

我們本季的業績主要受到收購科斯塔石油公司的影響以及我們的船舶和推進業務的成長所推動，而船舶和推進業務的需求仍然異常強勁。正如你們許多人所記得的那樣，我們在 2024 財年採取了積極措施，在該範圍內建立庫存，以應對需求增加的情況，而需求增加已經成為現實，而且我們工業業務的市場需求正在穩定。然而，本季業務的成長主要歸功於 CASA 的加入。

The integration of CASA our second largest acquisition state is progressing ahead of schedule. The addition of CASA has broadened our global reach and opened up new cross selling opportunities with leading European OEM, which we expect to continue supporting our long term performance.

我們第二大收購國CASA的整合正在提前推進。CASA 的加入擴大了我們的全球影響力，並開闢了與歐洲領先 OEM 的新交叉銷售機會，我們預計這將繼續支持我們的長期業績。

Shifting to our product segment results sales in our marine and propulsion segment grew 22.9% year over year driven by sustained activity in commercial markets and the impact of the cost of acquisition within the luxury yacht market that continues to expand on a global scale and its backlog grew essentially by 19% in the quarter. Incoming orders for vet products reached an all time all time highs in October driven in part by the demand for elite clusters which customers seek out for their increased fuel efficiency, added maneuverability and low noise vibration levels.

轉向我們的產品領域後，由於商業市場的持續活動以及豪華遊艇市場在全球範圍內持續擴張及其積壓的採購成本的影響，我們的船舶和推進領域的銷售額同比增長了 22.9%本季度基本增長了19%。十月獸醫產品的新訂單量創下歷史新高，部分原因是對精英集群的需求，客戶尋求這些集群以提高燃油效率、增加可操作性和低噪音振動水平。

We are gaining traction with elite clusters and new geographic markets beyond Europe. And our largest North American distributor is already positioned to be one of the largest customers due in part to strong demand for this product.

我們正在吸引歐洲以外的精英集群和新地理市場。我們最大的北美經銷商已經成為最大的客戶之一，部分原因是對該產品的強勁需求。

We're also capturing demand for customers that are converting to hybrid and electric marine systems. We recently won a hybrid system order for sightseeing vessel in the northeast that enables us to supply 10 times the content that would have been needed on a ship powered by internal combustion engine by adding content like batteries, motors, controls, converters and inverters.

我們也捕捉轉向混合動力和電動船舶系統的客戶的需求。我們最近贏得了一份東北觀光船的混合動力系統訂單，透過添加電池、馬達、控制器、轉換器和逆變器等內容，我們能夠提供比內燃機動力船所需內容多 10 倍的內容。

We also delivered multiple units of marine control drive which drive large clusters and hybrid systems for use in the Panama Canal. We will continue pursuing these types of growth opportunities as part of our strategic focus on expanding our offering in the hybrid and electrification space.

我們還交付了多台船舶控制驅動裝置，用於驅動巴拿馬運河使用的大型集群和混合系統。我們將繼續尋求這些類型的成長機會，作為我們擴大混合動力和電氣化領域產品的策略重點的一部分。

As mentioned in the past few quarters, a long term trend of heightened government defense spending has supported increased inquiries for patrol vote projects which should drive additional growth in the near term.

正如過去幾季所提到的，政府國防支出增加的長期趨勢支持了對巡邏投票項目的詢問增加，這應該在短期內推動進一步的成長。

Turning to our land based transmission business. We saw a 7% decline in sales primarily due to the softness in the Asian Pacific region as oil and gas exports remain flat, reflecting the broader demand challenges in the region. Despite this, we're encouraged by record levels of backlog in our airport rescue and firefighting or our transmission business which represented roughly half of our revenue within land based transmissions in the quarter. Our vehicles are essential for fire safety and prevention at any airport around the globe. Our ability to offer advanced configuration, unique torque capability and innovative power dividing systems makes a supplier of choice for our applications.

轉向我們的陸基傳輸業務。我們的銷售額下降了 7%，主要是由於亞太地區的疲軟，石油和天然氣出口保持平穩，反映出該地區更廣泛的需求挑戰。儘管如此，我們對機場救援和消防或傳輸業務的積壓創紀錄水平感到鼓舞，該業務約佔本季度陸基傳輸收入的一半。我們的車輛對於全球任何機場的消防安全和預防都至關重要。我們能夠提供先進的配置、獨特的扭力能力和創新的功率分配系統，使我們成為我們應用的首選供應商。

Our business has remained particularly robust. We are capturing increased demand for these vehicles as new airports are built, internationally, aging vehicle fleets need to be replaced and tightening global emission standards require fleet transmission to be updated.

我們的業務仍然特別強勁。隨著國際上新機場的建成、老化的車隊需要更換以及收緊的全球排放標準要求更新車隊傳輸，我們正在捕捉對這些車輛日益增長的需求。

We are also meeting demand for replacement parts for military vehicles including transmission and steering units which we expect to continue supporting growth in the segment of the impact of ongoing geopolitical turmoil.

我們也滿足軍用車輛替換零件的需求，包括變速箱和轉向裝置，我們預計這些零件將繼續支持受持續地緣政治動盪影響的部分的成長。

Sales in our industrial segment increased 61.3% year over year, primarily driven by the addition of CASA along with the general stabilization of end market demand.

工業類股銷售額年增61.3%，主要得益於CASA的加入以及終端市場需求的整體穩定。

While demand remains softer for some commoditized products, demand for higher content products has been resilient. We received a notable order for hydraulic power take off which efficiently allow the conversion into hydraulic power with minimum vibration from an OEM in the agricultural space.

儘管某些商品化產品的需求依然疲軟，但對高含量產品的需求卻一直保持彈性。我們從農業領域的原始設備製造商那裡收到了一份重要的液壓動力起飛訂單，該訂單可以有效地以最小的振動將動力轉換為液壓動力。

Looking ahead to Q2 orders to our left in facility which manufactures power take offs and buses for heavy duty industrial equipment also started to rise.

展望第二季度，我們左邊為重型工業設備製造動力輸出裝置和客車的工廠的訂單也開始增加。

We expect construction and agricultural markets to remain soft through fiscal 2025 but we will continue gaining share by leveraging our extensive engineering and applications experience to meet unique customer needs.

我們預計到 2025 財年，建築和農業市場將保持疲軟，但我們將利用我們豐富的工程和應用經驗來滿足獨特的客戶需求，並繼續獲得份額。

Our backlog has has reached historical level. Six month backlog grew both sequentially and year over year supported by demand for that product. As I mentioned earlier, foreign exchange accounted for $3.4 million of sequential backlog growth and inventory as a percentage of backlog increased to 99.7%. As we move through the year, we remain committed to disciplined inventory management to lower inventory compared to backlog.

我們的積壓已達到歷史水準。在對該產品的需求的支持下，六個月的積壓訂單連續增長並且同比增長。正如我之前提到的，外匯佔積壓訂單環比增長的 340 萬美元，庫存佔積壓訂單的百分比增加至 99.7%。在這一年中，我們仍然致力於嚴格的庫存管理，以減少積壓庫存。

To conclude my comments, I'd like to address our long term strategy before Jeff takes us through our financial review at the center of our strategy is the continued emphasis on controls and systems integration which unlocks sales and larger potential to drive sustainable growth.

最後，我想在傑夫帶我們進行財務審查之前先談談我們的長期策略，我們策略的核心是繼續強調控制和系統集成，從而釋放銷售和推動可持續增長的更大潛力。

This strategic shift is creating opportunities for us to explore and to capitalize on higher margin solutions in both our core and emerging market. With active projects focusing on fully electric and hybrid applications. We are well positioned to capture growth as the industry moves towards innovative sustainable technology simultaneously. We're streamlining and modernizing operations to enhance shipment by reducing inventory costs, shortening lead times and delivering improved outcomes for all stakeholders globally. We are already recognized as a leader in marine transmission and propulsion technology underscored by that continued growth.

這項策略轉變為我們在核心市場和新興市場探索和利用更高利潤的解決方案創造了機會。活躍的專案專注於全電動和混合動力應用。隨著產業同時朝向創新的永續技術發展，我們已做好充分準備來抓住成長機會。我們正在精簡和現代化運營，以透過降低庫存成本、縮短交貨時間並為全球所有利益相關者提供更好的成果來增強運輸。我們已被公認為船舶傳動和推進技術領域的領導者，這一持續增長凸顯了這一點。

Now, our mission has become the leading supplier of hybrid and electrical solutions across each of our end markets. With that, I'll now turn it over to Jeff and the financial. Jeff.

現在，我們的使命已成為每個終端市場的混合動力和電氣解決方案的領導供應商。有了這個，我現在將把它交給傑夫和財務部門。傑夫.

Thanks John. Good morning, everyone. We delivered sales of $72.9 million for the quarter of $9.3 million or 14.7% from the prior year driven by a $9.2 million incremental benefit from Costa combined with healthy demand in our global land market.

謝謝約翰。大家早安。在 Costa 920 萬美元的增量收益以及全球土地市場的健康需求的推動下，本季我們的銷售額為 7,290 萬美元，為 930 萬美元，較上年同期增長 14.7%。

Adjusting for the sale of the B CS business in 2024. 1st quarter, revenue was $11.1 million or 18% higher than the prior year quarter. Net loss attributable between us for the first quarter was $2.8 million or 20¢ per diluted share compared to net loss of $1.2 million or 9¢ per diluted share. In the first quarter of 50.4 earnings per share were impacted by an increase in other expense related to foreign currency loss. Additional interest expense on the acquisition of costs and additional pension amortization in the quarter, gross profit margin increased to 26.5% compared to 26.2% during the prior year period. And gross profit increased 16.1% to $19.3 million.

對 2024 年 B CS 業務的出售進行調整。第一季營收為 1,110 萬美元，比去年同期成長 18%。我們第一季應佔的淨虧損為 280 萬美元，即稀釋後每股 20 美分，而淨虧損為 120 萬美元，即稀釋後每股 9 美分。第一季每股收益 50.4% 受到與外匯損失相關的其他費用增加的影響。本季因購買成本和額外退休金攤銷而產生的額外利息支出，毛利率增加至 26.5%，而去年同期為 26.2%。毛利成長 16.1%，達到 1,930 萬美元。

Sales in the quarter were consistent with inherent seasonal trends of our business. We saw double digit growth in both the marine and propulsion systems and industrial segments driven by consistent market demand and geographic expansion and the additional benefit of the cost of acquisition.

本季的銷售額與我們業務固有的季節性趨勢一致。在持續的市場需求和地理擴張以及購買成本的額外收益的推動下，我們看到船舶和推進系統以及工業領域都實現了兩位數的成長。

The continued improvement in the industrial segment further supported year over year sales growth in terms of geographies, we saw increased sales in Europe as a result of our acquisition of cost as well as continued growth in sales proportion from Middle Eastern markets.

工業板塊的持續好轉進一步支撐了地區銷售的同比增長，我們看到歐洲由於成本收購帶來的銷售增長以及中東市場銷售比例的持續增長。

Net debt increased $11.9 million to $13.1 million in the quarter, primarily driven by an increase in total debt due to the cost of acquisition. We ended the quarter with a cash balance of $16.7 million. 18.2% lower. Prior year, operating cash generation was impacted by a year term shift in order time by certain customers along with increased inventory. EBITDA was$ 1.7 million in the first quarter, down 23% compared to the first quarter of fiscal '24 gross margin increased approximately 30 basis points in the prior year period, reflecting the benefit of incremental value partially offset by an unfavorable product mix due to reduced oilfield shipments into China. We continue to focus on enhanced profitability by pursuing cost reduction activities as we move through the year including product rationalization, manufacturing efficiencies and advancing the cost of integration to deliver cost savings with regard to inflationary and supply chain challenges. We have seen near term near term shipment delays with a few of our suppliers and additional headwinds from unstable mix. We expect these headwinds to ease as we move through the fiscal year.

本季淨債務增加 1,190 萬美元，達到 1,310 萬美元，主要是由於收購成本導致總債務增加。本季結束時，我們的現金餘額為 1,670 萬美元。降低 18.2%。上一年，營運現金產生受到某些客戶訂單時間的年度變化以及庫存增加的影響。第一季 EBITDA 為 170 萬美元，比 24 財年第一季下降 23%，毛利率比上年同期增加約 30 個基點，反映出增量價值的收益被不利的產品組合部分抵銷。的油田出貨。我們在這一年中繼續致力於透過降低成本活動來提高獲利能力，包括產品合理化、製造效率和提高整合成本，以節省成本以應對通貨膨脹和供應鏈挑戰。我們已經看到一些供應商的近期發貨延遲以及不穩定的組合帶來的額外阻力。我們預計，隨著本財年的推進，這些不利因素將會緩解。

Our capital allocation priorities remain unchanged although our leverage has increased to the recent acquisition of CASA, the structural improvements we have made to our business will help us reduce leverage through consistent cash generation. We continue to evaluate acquisitions which accelerate both in our core industrial and marine technology market.

儘管我們的槓桿率在最近收購 CASA 後有所增加，但我們的資本配置優先順序保持不變，但我們對業務所做的結構性改進將幫助我們透過持續的現金產生來降低槓桿率。我們繼續評估加速我們核心工業和海洋技術市場的收購。

We also remain focused on making internal investments to drive organic growth, including investments in R&D geographic diversification and expansion and marketing.

我們也持續專注於內部投資以推動有機成長，包括對研發地理多元化、擴張和行銷的投資。

I now like to turn the call back to John to share some closing remarks.

我現在想把電話轉回給約翰，讓他分享一些結束語。

In closing the first quarter was a solid start to the year. We've delivered strong sales growth and margin expansion driven by our strategic focus on innovation and operational excellence. Our steady backlog is supported by consistent demand across our end markets. And we continue to reap the benefits of strategic decisions that have not only enhanced our global reach but diversified our product offering with our robust financial profile. We are confident in our ability to navigate through any economic uncertainties while executing our growth strategy to deliver long term value to our shareholders.

總而言之，第一季是今年的好開始。在我們對創新和卓越營運的策略重點的推動下，我們實現了強勁的銷售成長和利潤擴張。我們穩定的積壓訂單得到了終端市場持續需求的支持。我們繼續從策略決策中獲益，這些決策不僅增強了我們的全球影響力，而且憑藉我們穩健的財務狀況實現了產品供應的多樣化。我們對克服任何經濟不確定性的能力充滿信心，同時執行我們的成長策略，為股東創造長期價值。

That concludes our prepared remarks. Jeff and I will be happy to answer your question.

我們準備好的演講到此結束。傑夫和我很樂意回答你的問題。

Thank you. At this time. I would like to remind everyone in order to ask a question, press star, then the number one in your telephone keypad, we will pause for just a moment to compile the Q&A roster.

謝謝。此時。我想提醒大家，要提問，請按星號，然後按電話鍵盤上的數字一，我們將暫停片刻來整理問答名冊。

Your first question comes from the line of Simon Wong with G funds. Thank you. Please go ahead.

你的第一個問題來自G基金的Simon Wong。謝謝。請繼續。

Morning, Simon.

早安，西蒙。

Just a couple of a couple of questions here. First on the free cash flow, free sizeable, negative, free cash generation quarter. What's your outlook for the year?

這裡只有幾個問題。首先是自由現金流，自由現金流相當大，為負，自由現金流產生季度。您對今年的前景有何展望？

Yeah, I mean, it's still positive. I think we get back on the inventory reduction the big, the big you know impacts in the quarter were significant, you know, year end accrual payment. And then we had inventory jump up on us as we, as we commented with some order push out. So we expect to jump back into, you know, generally positive 60% of the but the level of free cash flow for the rest of the year quarter by quarter, hopefully picking up some of the of the shortfall in the quarter through the rest of the year.

是的，我的意思是，這仍然是積極的。我認為我們在庫存削減方面取得了巨大的成果，你知道，本季的影響是重大的，你知道，年終應計付款。然後我們的庫存激增，因為我們評論了一些訂單的推出。因此，我們預計今年剩餘時間的自由現金流水準將逐季回升到整體正值 60%，希望透過剩餘時間彌補本季的部分缺口。

Okay. And then the effect offering that you introduced about two or three quarters ago, Any update on, on the, on the offering.

好的。然後是您大約兩三個季度前推出的效果產品，有關該產品的任何更新。

It's still the prototypes are still out there. But we have not, we have not had any takers yet on, on pulling the trigger to buy a fleet. We're getting more calls for traditional right now that that seems to be where everyone where our customers are focusing, focusing on our traditional spread.

原型仍然在那裡。但我們還沒有，我們還沒有任何接受者扣動扳機購買一支艦隊。現在我們收到了更多對傳統產品的需求，這似乎是我們的客戶所關注的每個人都關注的地方，專注於我們的傳統傳播。

Okay. One final, a quick one. What, what's the oil and gas business? How much, what's the, how much did it contribute to this quarter?

好的。一場決賽，一場快速的決賽。什麼，什麼是石油和天然氣業務？對這個季度貢獻了多少、多少、多少？

Yeah, so oil and gas was a lower percentage of the quarter than, than we see in the past. It was about 10% of revenue for the quarter. If you compare that to last year's Q1, it was more like 15% of the quarter. So definitely down in the quarter and contributed to the payrolling impact that.

是的，所以石油和天然氣在本季度的百分比比我們過去看到的要低。約佔該季度營收的 10%。如果與去年第一季相比，這一比例更像是該季度的 15%。因此，本季肯定有所下降，並導致了薪資影響。

Okay, great. Thank you.

好的，太好了。謝謝。

Thank you again. If you would like to ask a question, press star one on your telephone. Keep it no questions at this time, please continue.

再次感謝您。如果您想提問，請按電話上的星號一。此時不要有任何疑問，請繼續。

All right, Andrea, I guess if there's no further questions, we can stop the call and I hope to see everyone at our second quarter call which will be late January, early February 2025.

好吧，Andrea，我想如果沒有其他問題，我們可以停止通話，我希望在 2025 年 1 月底 2 月初的第二季電話會議上見到大家。

Thank you, ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.

謝謝女士們、先生們，今天的電話會議到此結束。感謝大家的加入。您現在可以斷開連線。