Twin Disc earnings fall on restructuring charge

Racine-based Twin Disc Inc. today reported fiscal 2015 fourth quarter net income of $476,000, or 4 cents per share, down from $2.4 million, or 21 cents per share, in the fourth quarter of 2014.

The marine and heavy duty off-highway power transmission equipment manufacturer reported operating income of $74,000, down from $3.8 million in the same period a year ago. During the quarter, the company restructured its operations, which resulted in a $3.3 million charge.

Revenue totaled $67.3 million in the fourth quarter, down from $73.6 million in the fourth quarter of 2014.

The company attributed the sales decline to lower shipments of land-based transmission systems for North American oil and gas applications, and weaker demand for commercial marine and oilfield transmissions in Asia. In addition, foreign currency translations resulted in an unfavorable $4 million impact on sales in the fourth quarter.

For the full year, Twin Disc reported net income of $11.4 million, or 99 cents per share, up from $3.6 million, or 32 cents per share, in 2014.

Full year operating income was $15.5 million, up from $8.9 million last year.

And 2015 revenue totaled $265.8 million, up from $263.9 million in 2014. Foreign currency translation had an unfavorable $8.9 million impact on full-year sales.

“Trends in our markets were strong for most of the year, but during the second half we began facing an increasing number of headwinds such as volatile foreign exchange rates, challenging end markets, and the impact of global oil prices,” said John Batten, president and chief executive officer. “For the year, we were able to achieve earnings growth of (more than) 200 percent on less than a 1 percent improvement in annual sales as a more profitable mix of sales favorably impacted margins and we were able to leverage marketing, engineering and administrative expenses. We quickly responded and made the necessary adjustments to our business as a result of sustained lower oil prices and slower economic growth in several of our regions.  As a result, we proactively restructured our North American operations to lower costs and to improve efficiencies.  We continue to watch our end markets closely and to look at additional ways to lower expenses and to expand revenues.”

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