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Twin Disc, Inc. (NASDAQ: TWIN) today reported financial results for the fiscal 2012 first quarter ended September 30, 2011.
Sales for the fiscal 2012 first quarter, seasonally the weakest quarter of the fiscal year, improved to $81,330,000, from $61,395,000 for the same period last year. The improvement in sales was the result of strong demand from customers in the oil and gas markets as well as growing demand in our aftermarket, industrial and airport rescue and fire fighting (ARFF) markets. Stable demand continues from the land- and marine-based military markets. While overall demand from commercial marine markets continued to improve, sales for the quarter were down slightly as a result of the timing of shipments to customers. The mega yacht and pleasure craft marine markets showed modest improvements in shipments and order activity in the first quarter versus the same period a year ago, albeit off of depressed levels.
Gross margin for the fiscal 2012 first quarter was a record 37.8 percent, compared to 32.6 percent in the fiscal 2011 first quarter. The significant improvement in fiscal 2012 first-quarter gross margin was the result of continuing increased sales volumes, improved manufacturing efficiency and absorption, and a more profitable mix of business.
For the fiscal 2012 first quarter, marketing, engineering and administrative (ME&A) expenses, as a percentage of sales, were 19.6 percent, compared to 24.1 percent for the fiscal 2011 first quarter. ME&A expenses increased $1,132,000 versus the same period last fiscal year. Stock-based compensation expense decreased $1,107,000 versus the prior year’s first fiscal quarter, primarily driven by the decrease in the Company’s stock price in the first quarter of fiscal 2012. Partially offsetting this were movements in foreign exchange rates, which increased ME&A expenses by $792,000 in the first quarter of fiscal 2012 versus the comparable period a year ago. The net remaining increase of $1,447,000 primarily relates to increased research and development activities, and higher salaries and wages.