 Fourth quarter gross profit percent improved 60 basis points year-over-year Generated 4.3 million of cash from operating activities during the fourth quarter Veth Propulsion sales increased 6.2 for fiscal 2020 7.2 million of annualized expense reductions announced in response to the COVID-19 crisis Challenging market conditions due to the impacts of the COVID-19 crisis and weaker oil and gas marketsRACINE, Wis., Aug. 07, 2020 GLOBE NEWSWIRE -- Twin Disc, Inc. NASDAQ: TWIN, today reported financial results for the fiscal 2020 fourth quarter ended June 30, 2020. Sales for the fiscal 2020 fourth quarter were 59.4 million, compared to 72.4 million for the same period last year. The 18.0 decrease in 2020 fourth quarter sales was primarily due to continued softness in the Companys oil and gas markets along with weaker demand for industrial and marine products compared to the same period the prior fiscal year. Despite a difficult global economy, our Veth Propulsion acquisition reported a 6.2 increase in sales for fiscal 2020 and a 26.0 increase compared to the prior fiscal year fourth quarter. This growth reflects the acquisition synergies we have been able to achieve with respect to market penetration and product acceptance in Veths non-traditional markets of Asia and North America. For the fiscal 2020 full year, sales were 246.8 million, compared to 302.7 million for fiscal 2019. Foreign currency exchange had a 0.9 million unfavorable impact on fiscal 2020 fourth quarter sales and a 4.8 million unfavorable impact on fiscal 2020 year-to-date sales. John H. Batten, Chief Executive Officer, commented: Our six-month backlog at June 30, 2020, was 66.6 million, compared to 87.4 million at March 27, 2020, and 99.6 million at June 30, 2019. By many accounts, fiscal 2020 was one of the most challenging years in Twin Discs 102-year history. As the COVID-19 crisis continues impacting demand across many of our global markets, we are focused on managing the actions that are under our control. Throughout our history we have successfully emerged from challenging industry cycles, and I am confident we will come out of the COVID-19 crisis as a stronger and leaner company that is better positioned to compete within our various markets. Across our global manufacturing and distribution operations, our teams have remained dedicated to delivering quality, craftsmanship and innovation to our worldwide customers. I am proud of the response, hard work and commitment of our global employees during this challenging period.Mr. Batten continued: In response to the COVID-19 crisis and the severe impact the pandemic is having on many of our global markets, we are taking aggressive actions to reduce expenses, while focusing on initiatives that improve Twin Discs efficiency, productivity, and cost structure. As a result, we recently announced 7.2 million of annualized expense reductions primarily impacting our domestic operations. Simultaneously, we have pursued strategies to limit the capital requirements of our business, improve manufacturing efficiency, reduce costs, and diversify our geographic footprint and end-market concentration, while enhancing the quality and reliability of Twin Discs products. On August 1, 2020, we opened our new manufacturing facility in Lufkin, TX. As this facility ramps up production, we believe it will further improve our manufacturing and logistic capabilities, while concentrating resources closer to many of our end customers. Gross profit percent for the fiscal 2020 fourth quarter was 23.3, compared to 22.7 in the fiscal 2019 fourth quarter. The 60 basis point increase in gross profit margin percentage for the fiscal 2020 fourth quarter compared to the fiscal 2019 fourth quarter was primarily due to the positive impact of targeted cost reduction initiatives on certain key products, along with a global focus on cost containment. For the fiscal 2020 full year, gross profit was 22.6, compared to 29.6 for the fiscal 2019 full year. For the fiscal 2020 fourth quarter, marketing, engineering and administrative MEA expenses decreased 1.2 million to 15.1 million, compared to 16.3 million for the fiscal 2019 fourth quarter. The 7.1 decrease in MEA expenses in the quarter was primarily due to reduced professional fees 0.6 million, reduced domestic salaries 0.4 million, reduced corporate travel 0.2 million, reduced marketing activities 0.2 million and general cost containment actions 0.3 million. These decreases were partially offset by an increase to amortization expense due to a change in assumptions 0.5 million. As a percent of revenues, MEA expenses were 25.5 for the fiscal 2020 fourth quarter, compared to 22.5 for the same period last fiscal year. For the fiscal 2020 full year, MEA expenses decreased 8.3 million, or 11.6, to 63.2 million, compared to 71.5 million for the fiscal 2019 full year. As a percent of revenues, for the fiscal 2020 full year, MEA expenses increased to 25.6, compared to 23.6 for the fiscal 2019 full year. Twin Disc recorded restructuring charges of 0.2 million in the fiscal 2020 fourth quarter, compared to restructuring charges of 0.4 million in the same period last fiscal year. Restructuring activities during the fiscal 2020 fourth quarter related primarily to cost reduction and productivity actions at the Companys European operations. For the fiscal 2020 full year, the Company recorded restructuring charges of 5.1 million, compared to 1.2 million for the fiscal 2019 full year. During the fiscal 2020 third quarter, the Company recorded a 27.6 million non-cash goodwill and long-lived asset impairment charge related to the unprecedented uncertainty in the Companys markets due to the global COVID-19 pandemic, along with an historic decline in oil prices impacting the global energy market.The effective tax rate for fiscal 2020 was 9.5 compared to 25.6 for fiscal 2019. Under the Tax Cuts and Jobs Act, a company is prohibited from recognizing certain foreign global intangible low taxed income GILTI deductions and credits when in a domestic loss position, but is required to include the foreign GILTI income inclusions. The 5.8 million GILTI inclusion and deemed taxes decreased the fiscal 2020 rate by 2.8. The Company determined that the carrying value of certain goodwill and intangibles exceeded their fair value and a 27.6 million impairment loss was recorded in the third fiscal quarter, resulting in a decrease to the effective tax rate of 13.3. Income generated in foreign jurisdictions and other tax preference items also impacted the rate. Net loss attributable to Twin Disc for the fiscal 2020 fourth quarter was 1.8 million, or 0.13 per share, compared to a net loss of 0.8 million, or 0.06 per share, for the fiscal 2019 fourth quarter. For the fiscal 2020 full year, net loss attributable to Twin Disc was 39.8 million, or 3.03 per diluted share, compared to net income of 10.7 million, or 0.83 per diluted share for the fiscal 2019 full year. Earnings before interest, taxes, depreciation and amortization EBITDA was 1.3 million for the fiscal 2020 fourth quarter, compared to 2.9 million for the fiscal 2019 fourth quarter. For the fiscal 2020 full year, EBITDA was a negative 30.2 million compared to EBITDA of 29.9 million for the fiscal 2019 full year. Jeffrey S. Knutson, Vice President Finance, Chief Financial Officer, Treasurer and Secretary, stated: Throughout the COVID-19 crisis we have aggressively eliminated expenses and aligned our cost structure with expected sales, while focusing on strengthening our balance sheet and reducing working capital levels. For fiscal year 2020 we generated 9.6 million of cash from operating activities, including 4.3 million of cash from operating activities during the fiscal 2020 fourth quarter. Working capital at June 30, 2020 was 107.2 million, compared to 127.3 million at June 30, 2019. Inventory reduction efforts contributed 5.3 million to this year-over-year improvement. We have deferred all non-essential spending and capital expenditures to conserve cash until the economic environment becomes clearer, and currently expect to invest 7 million to 9 million in capital expenditures during fiscal 2021.Twin Disc will be hosting a conference call to discuss these results and to answer questions at 11:00 a.m. Eastern Time on Friday, August 7, 2020. To participate in the conference call, please dial 866-548-4713 five to ten minutes before the call is scheduled to begin. A replay will be available from 2:00 p.m. August 7, 2020, until midnight August 14, 2020. The number to hear the teleconference replay is 844-512-2921. The access code for the replay is 7300177. The conference call will also be broadcast live over the Internet. To listen to the call via the Internet, access Twin Discs website at and follow the instructions at the webcast link. The archived webcast will be available shortly after the call on the Companys website.About Twin Disc, Inc. Twin Disc, Inc. designs, manufactures and sells marine and heavy-duty off-highway power transmission equipment. Products offered include marine transmissions, azimuth drives, surface drives, propellers and boat management systems, as well as power-shift transmissions, hydraulic torque converters, power take-offs, industrial clutches and control systems. The Company sells its products to customers primarily in the pleasure craft, commercial and military marine markets, as well as in the energy and natural resources, government and industrial markets. The Companys worldwide sales to both domestic and foreign customers are transacted through a direct sales force and a distributor network. For more information, please visit 