Racine-based Twin Disc Inc., facing a sales and earnings decline that the company blames on “continued weakness in the North American pressure pumping sector,” reported fourth quarter net earnings of $47,000, down from $1.26 million in the fiscal 2012 fourth quarter.
For the full fiscal year the company reported net earnings of $3.88 million, down from $26.74 million in fiscal 2012.
Net sales for the quarter were $75.93 million, down 21 percent from $96.1 million in the fourth quarter of fiscal 2012. For the full fiscal year net sales were $285.28 million, down 19.8 percent from $355.87 million in fiscal 2012.
The company reported lower demand from customers in the pressure pumping sector of the North American oil and gas market and softness in sales to European customers, but higher demand from customers in the North American and Asian commercial marine markets. Sales to customers serving the global mega yacht market “remained at historic lows” throughout the fiscal year, while demand remained steady for equipment used in the airport rescue and fire fighting, and military markets, the company said.
“On many levels, fiscal 2013 was a transitional year for the company as we continued to build a solid foundation to support our long-term growth strategies,” said Michael E. Batten, chairman and chief executive officer. “A key component of our strategic plan has been to enhance Twin Disc’s position as a global company. For the sixth consecutive year, the majority of our sales have been to customers outside the U.S. We remain committed to marketing the Twin Disc brand internationally with an expanding focus on emerging markets. As a result, China now represents 10 percent of overall sales and has become the second largest market for sales after the U.S.”
Batten said the company’s six-month backlog at the end of June was $66,765,000 compared to $64,879,000 at March 29, 2013 and $98,746,000 at June 30, 2012.
“The $1,886,000 sequential increase in the backlog represents the first increase in seven quarters,” he said. “While we are optimistic our backlog has bottomed, we do not anticipate the improvement to be similar to the past recovery, which was driven by rapid demand for oil and gas pressure pumping transmissions in North America. The fiscal 2014 first half will be influenced by similar dynamics that affected our business this past year – global demand from commercial marine customers and international oil and gas opportunities, offset by weak European and global mega yacht markets. We are cautiously optimistic demand from the North American oil and gas market will begin to improve in the fiscal 2014 second half.”