What guidance did Twin Disc's management provide for the next earnings period?

What were the key takeaways from Twin Disc's earnings call?

What does Twin Disc do and what are its main business segments?

What is Twin Disc's gross profit margin?

What is Twin Disc's latest dividend and current dividend yield?

Did Twin Disc beat or miss consensus estimates last quarter?

What were the key takeaways from Twin Disc’s earnings call?

What factors drove the changes in Twin Disc's revenue and profit?

- **Revenue Growth**: Q1 sales up 9.7% YoY to $80M, driven by marine and industrial segments.
- **Margin Expansion**: Gross margin improved 220bps to 28.7%, with EBITDA up 172% YoY.
- **Defense Strength**: Defense orders up 45% YoY, 15% of $163.3M backlog, with autonomous vessel programs doubling annually.
- **Tariff Mitigation**: 1-3% Q2 cost impact expected to normalize to 1% in H2FY26.
- **Cash Flow Target**: 60% EBITDA conversion, with Q1 inventory investments to be recovered in Q2.
- **Sustainability**: 40% incremental margin target for future growth, supported by Veth supply chain stabilization.

**【Management Opening Remarks】**
- CFO Jeff Knutson provided standard disclaimers on forward-looking statements and non-GAAP financial measures, emphasizing caution regarding potential future results and the use of non-GAAP metrics for performance evaluation.

**【CEO Commentary】**
- **Revenue Growth**: Q1 sales of $80 million (+9.7% YoY), driven by marine and industrial segments, with organic growth of 1.1% excluding acquisitions.
- **Gross Margin Expansion**: 28.7% (up 220bps YoY) due to cost initiatives and improved product mix, particularly in Veth thrusters.
- **Defense Momentum**: Defense-related orders up 45% YoY, comprising 15% of $163.3M backlog, with key contracts in NATO vehicles and U.S. Navy autonomous vessels.
- **Tariff Impact**: 1-3% Q2 cost of sales impact from tariffs, expected to normalize to 1% in H2FY26.
- **Backlog Strength**: 6-month backlog up 13% YoY, supported by sustained demand across marine, land, and industrial segments.

**【CFO Financial Commentary】**
- **Profitability**: Net loss of $0.04M (-89% YoY loss reduction), EBITDA of $4.7M (+172% YoY), reflecting margin improvements and reduced currency losses.
- **Cash Flow**: Q1 cash balance $14.2M (down 14.8% YoY) due to seasonal working capital needs, with net debt at 1.3x leverage.
- **Free Cash Flow Target**: 60% of EBITDA, aiming to recover Q1 inventory investments in Q2.

**【Q&A Highlights】**
- **Military Growth Timing**: Finland NATO vehicle program to double in 12-18 months; U.S. Navy autonomous vessels to double annually.
- **Oil & Gas Resilience**: Despite China slowdown, ARFF rebuilds and e-frac orders ($2.3M) offset volume declines, with natural gas demand supporting long-term outlook.
- **Gross Margin Sustainability**: 220bps improvement driven by Veth supply chain stabilization; 40% incremental margin target for future growth.
- **Free Cash Flow Outlook**: Targeting 60% EBITDA conversion, with Q1 drag from tariffs and inventory expected to normalize in Q2.
- **Land-Based Transmission**: Flat sales due to ARFF capacity constraints, offset by Katsa integration and emerging rebuild demand.

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