Note E - Business Segments

9 Months Ended

Mar. 26, 2021

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

E. Business Segments

The Company and its subsidiaries are engaged in the manufacture and sale of marine and heavy-duty off-highway power transmission equipment. Principal products 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 controls systems. The Company sells to both domestic and foreign customers in a variety of market areas, principally pleasure craft, commercial and military marine markets, as well as in the energy and natural resources, government and industrial markets. The Company's worldwide sales to both domestic and foreign customers are transacted through a direct sales force and a distributor network.

The Company has two reportable segments: manufacturing and distribution. Its segment structure reflects the way management makes operating decisions and manages the growth and profitability of the business. It also corresponds with management’s approach of allocating resources and assessing the performance of its segments. The accounting practices of the segments are the same as those described in the summary of significant accounting policies. Transfers among segments are at established inter-company selling prices. Management evaluates the performance of its segments based on net income.

Information about the Company’s segments is summarized as follows:

	For the Quarter Ended						For the Three Quarters Ended
	March 26, 2021			March 27, 2020			March 26, 2021			March 27, 2020
Net sales
Manufacturing segment sales	$	52,138		$	58,877		$	132,338		$	170,611
Distribution segment sales		26,221			28,387			71,950			72,839
Inter/Intra segment elimination – manufacturing		(15,074	)		(13,993	)		(37,892	)		(42,928	)
Inter/Intra segment elimination – distribution		(5,645	)		(4,635	)		(14,019	)		(13,060	)
	$	57,640		$	68,636		$	152,377		$	187,462
Net income (loss) attributable to Twin Disc
Manufacturing segment net income (loss)	$	2,422		$	(26,859	)	$	(3,352	)	$	(34,650	)
Distribution segment net income		697			991			2,352			2,925
Corporate and eliminations		(3,025	)		638			(7,198	)		(6,332	)
	$	94		$	(25,230	)	$	(8,198	)	$	(38,057	)

	March 26, 2021			June 30, 2020
Assets
Manufacturing segment assets	$	366,594		$	365,417
Distribution segment assets		48,121			43,118
Corporate assets and elimination of intercompany assets		(116,232	)		(114,408	)
	$	298,483		$	294,127

Disaggregated revenue:

The following table presents details deemed most relevant to the users of the financial statements for the quarters and three quarters ended March 26, 2021 and March 27, 2020.

Net sales by product group for the quarter ended March 26, 2021 is summarized as follows:

					Elimination of
	Manufacturing		Distribution		Intercompany Sales			Total
Industrial	$	5,652	$	1,491	$	(1,307	)	$	5,836
Land-based transmissions		13,793		6,892		(5,419	)		15,266
Marine and propulsion systems		32,671		15,016		(13,951	)		33,736
Other		22		2,822		(42	)		2,802
Total	$	52,138	$	26,221	$	(20,719	)	$	57,640

Net sales by product group for the quarter ended March 27, 2020 is summarized as follows:

					Elimination of
	Manufacturing		Distribution		Intercompany Sales			Total
Industrial	$	5,709	$	1,760	$	(619	)	$	6,850
Land-based transmissions		15,185		9,051		(6,599	)		17,637
Marine and propulsion systems		37,968		15,817		(11,409	)		42,376
Other		15		1,759		(1	)		1,773
Total	$	58,877	$	28,387	$	(18,628	)	$	68,636

Net sales by product group for the three quarters ended March 26, 2021 is summarized as follows:

					Elimination of
	Manufacturing		Distribution		Intercompany Sales			Total
Industrial	$	15,744	$	4,168	$	(3,369	)	$	16,543
Land-based transmissions		34,388		19,267		(14,388	)		39,267
Marine and propulsion systems		82,152		41,996		(34,095	)		90,053
Other		54		6,519		(59	)		6,514
Total	$	132,338	$	71,950	$	(51,911	)	$	152,377

Net sales by product group for the three quarters ended March 27, 2020 is summarized as follows:

					Elimination of
	Manufacturing		Distribution		Intercompany Sales			Total
Industrial	$	18,409	$	4,712	$	(2,183	)	$	20,938
Land-based transmissions		49,159		20,769		(21,466	)		48,462
Marine and propulsion systems		102,988		43,445		(32,337	)		114,096
Other		55		3,913		(2	)		3,966
Total	$	170,611	$	72,839	$	(55,988	)	$	187,462