Racine-based Twin Disc Inc. is increasing base salaries for its top executives, reinstating a portion of the pay cut put in place last year as the company dealt with the downturn in the oil and gas industry.
[caption id="attachment_124501" align="alignright" width="350"] Grand Banks' GB60 includes Twin Disc products.[/caption]
The maker of marine and off-highway power transmission equipment announced a 6 percent cut to base salaries for named executives and a 10 percent cut for president and chief executive officer John Batton in November 2015. The corporate incentive plan was also suspended for 2016.
Twin Disc’s board voted last week to reinstate half of the reductions as part of a partial pay reinstatement program at the company’s Racine operations. Base wages for salaried and hourly employees were cut by 4 percent last year. The company also eliminated 15 salaried positions and instituted temporary layoffs.
The reinstatement gives Batton an annual base salary of $475,000, up from $450,000. Chief financial officer Jeffrey Knutson goes from $296,100 to $305,550, Dean Bratel, vice president for sales and applied technology goes from $258,500 to $266,750 and Denise Wilcox, vice president for human resources, goes from $216,200 to $223,100.
The company did not disclose details of its pay reinstatement for salaried and hourly employees or whether employees on temporary layoff would be returning.
Knutson did not return a call seeking additional comment.
The company’s first quarter results did show an improvement over last year, but the company still recorded a net loss of $2.7 million or 24 cents per diluted share. The result was an improvement over the net loss of $4.3 million, or 39 cents per diluted share, last year.
Revenue was down 4.1 percent to $35.8 million, but the company was able to reduce its cost of goods sold by 8.6 percent and marketing, engineering and administrative expenses were down 18.1 percent.
During the company’s earnings call, Batton reiterated that as the oil and gas market began its downturn, the company opted to focus on being profitable with roughly $200 million in sales. The company posted an $11.2 million profit in fiscal 2015 with $265 million in revenue and lost $13 million on $166 million in revenue in fiscal 2016.
“We firmly believe that we are on track for a lower break even point,” Batton said, although he added it was difficult to point to any one particular area of the business that was doing better and market conditions remained weak.
The company has significant exposure to the oil and gas industry and Batton said while many people didn’t realize just how much of the frac fleet was not operating, there are signs of increase in activity.
“It’s the first glimmer of hope here in North America, primarily in Texas,” he said.