Note E - Business Segments

9 Months Ended

Mar. 31, 2023

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.  These segment structures reflect the way management makes operating decisions and manages the growth and profitability of the business, and 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 between segments are at established inter-company selling prices.  Management evaluates the performance of its segments based on their net income.

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

	For the Quarter Ended						For the Three Quarters Ended
	March 31, 2023			March 25, 2022			March 31, 2023			March 25, 2022
Net sales
Manufacturing segment sales	$	63,932		$	56,403		$	169,607		$	147,296
Distribution segment sales		33,839			23,660			83,732			72,485
Inter/Intra segment elimination – manufacturing		(18,531	)		(16,672	)		(46,373	)		(40,815	)
Inter/Intra segment elimination – distribution		(5,468	)		(4,102	)		(13,930	)		(12,027	)
	$	73,772		$	59,289		$	193,036		$	166,939
Net income attributable to Twin Disc
Manufacturing segment net income	$	5,873		$	6,000		$	11,500		$	9,230
Distribution segment net income		2,053			1,415			4,412			3,396
Corporate and eliminations		(5,252	)		(5,184	)		(14,127	)		(12,310	)
	$	2,674		$	2,231		$	1,785		$	316

Assets	March 31, 2023			June 30, 2022
Manufacturing segment assets	$	376,722		$	364,174
Distribution segment assets		60,394			50,958
Corporate assets and elimination of intercompany assets		(151,603	)		(138,609	)
	$	285,513		$	276,523

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 31, 2023 and March 25, 2022.

Net sales by product group for the quarter ended March 31, 2023 is summarized as follows:

						Elimination of
	Manufacturing			Distribution		Intercompany Sales			Total
Industrial	$	7,076		$	1,548	$	(1,321	)	$	7,303
Land-based transmissions		16,785			8,692		(5,902	)		19,575
Marine and propulsion systems		40,492			19,867		(16,505	)		43,854
Other		(421	)		3,732		(271	)		3,040
Total	$	63,932		$	33,839	$	(23,999	)	$	73,772

Net sales by product group for the quarter ended March 25, 2022 is summarized as follows:

					Elimination of
	Manufacturing		Distribution		Intercompany Sales			Total
Industrial	$	7,947	$	1,449	$	(935	)	$	8,461
Land-based transmissions		17,448		7,173		(8,535	)		16,086
Marine and propulsion systems		30,820		13,108		(10,766	)		33,162
Other		188		1,930		(538	)		1,580
Total	$	56,403	$	23,660	$	(20,774	)	$	59,289

Net sales by product group for the three quarters ended March 31, 2023 is summarized as follows:

					Elimination of
	Manufacturing		Distribution		Intercompany Sales			Total
Industrial	$	20,732	$	4,322	$	(3,208	)	$	21,846
Land-based transmissions		48,329		16,743		(14,888	)		50,184
Marine and propulsion systems		100,546		49,838		(40,751	)		109,633
Other		-		12,829		(1,456	)		11,373
Total	$	169,607	$	83,732	$	(60,303	)	$	193,036

Net sales by product group for the three quarters ended March 25, 2022 is summarized as follows:

					Elimination of
	Manufacturing		Distribution		Intercompany Sales			Total
Industrial	$	20,939	$	4,377	$	(3,016	)	$	22,300
Land-based transmissions		41,158		18,775		(18,287	)		41,646
Marine and propulsion systems		84,968		41,330		(30,983	)		95,315
Other		231		8,003		(556	)		7,678
Total	$	147,296	$	72,485	$	(52,842	)	$	166,939