Note K - Shareholders' Equity

9 Months Ended

Mar. 29, 2024

Notes to Financial Statements

Equity [Text Block]

K. Shareholders’ Equity

The Company, from time to time, makes open market purchases of its common stock under authorizations given to it by the Board of Directors, of which 315.0 shares as of March 29, 2024 remain authorized for purchase.  The Company did not make any open market purchases of its shares during the quarters ended March 29, 2024 and March 31, 2023.

As of July 1, 2022, the cumulative effect of the Accounting change resulted in $25.1 million decrease to retained earnings and a corresponding $25.1 million increase to accumulated other comprehensive loss, both net of tax of $0 ($7.9 million in deferred tax asset offset by $7.9 million valuation allowance).

See Notes A, G, M, and P for further information regarding the impact of the Accounting change on the Company’s prior year consolidated financial statements.

The following is a reconciliation of the Company’s equity balances for the three fiscal quarters of 2024 and 2023:

	Twin Disc, Inc. Shareholders’ Equity
							Accumulated
							Other						Non-
	Common			Retained			Comprehensive			Treasury			Controlling			Total
	Stock			Earnings			Loss			Stock			Interest			Equity
Balance, June 30, 2023	$	42,855		$	120,299		$	(5,570	)	$	(12,491	)	$	424		$	145,517
Net (loss) income					(1,173	)								90			(1,083	)
Translation adjustments								(3,096	)					60			(3,036	)
Benefit plan adjustments, net of tax								(171	)								(171	)
Unrealized gain on hedges, net of tax								216									216
Compensation expense		495															495
Shares (acquired) issued, net		(3,911	)								2,148						(1,763	)
Balance, September 29, 2023		39,439			119,126			(8,621	)		(10,343	)		574			140,175
Net income					930									5			935
Dividends paid to shareholders					(560	)											(560	)
Translation adjustments								5,155						35			5,190
Benefit plan adjustments, net of tax								(108	)								(108	)
Unrealized loss on hedges, net of tax								(485	)								(485	)
Compensation expense		772															772
Shares (acquired) issued, net		(550	)								541						(9	)
Balance, December 29, 2023		39,661			119,496			(4,059	)		(9,802	)		614			145,910
Net income					3,822									78			3,900
Dividends paid to shareholders					(559	)											(559	)
Translation adjustments								(3,040	)					(44	)		(3,084	)
Benefit plan adjustments, net of tax								(191	)								(191	)
Unrealized gain on cash flow hedge, net of tax								196									196
Compensation expense		791															791
Shares (acquired) issued, net		(24	)								5						(19	)
Balance, March 29, 2024	$	40,428		$	122,759		$	(7,094	)	$	(9,797	)	$	648		$	146,944

	Twin Disc, Inc. Shareholders’ Equity
							Accumulated
							Other						Non-
	Common			Retained			Comprehensive			Treasury			Controlling			Total
	Stock			Earnings			Loss			Stock			Interest			Equity
Balance, June 30, 2022	$	42,551		$	109,919		$	(6,974	)	$	(14,720	)	$	412		$	131,188
Net (loss) income					(1,422	)								98			(1,324	)
Translation adjustments								(6,328	)					38			(6,290	)
Benefit plan adjustments, net of tax								(89	)								(89	)
Unrealized gain on hedges, net of tax								793									793
Compensation expense		658															658
Shares (acquired) issued, net		(1,924	)								1,756						(168	)
Balance, September 30, 2022		41,285			108,497			(12,598	)		(12,964	)		548			124,768
Net income					1,746									15			1,761
Translation adjustments								8,333						59			8,392
Benefit plan adjustments, net of tax								(1,122	)								(1,122	)
Unrealized loss on hedges, net of tax								(595	)								(595	)
Compensation expense		856															856
Shares (acquired) issued, net		(697	)								402						(295	)
Balance, December 30, 2022		41,444			110,243			(5,982	)		(12,562	)		622			133,765
Net income					3,281									76			3,357
Translation adjustments								1,023						(9	)		1,014
Benefit plan adjustments, net of tax								(29	)								(29	)
Unrealized loss on cash flow hedge, net of tax								(224	)								(224	)
Compensation expense		736															736
Shares (acquired) issued, net		(35	)								35						-
Balance, March 31, 2023	$	42,145		$	113,524		$	(5,212	)	$	(12,527	)	$	689		$	138,619

Reconciliations for the changes in accumulated other comprehensive loss, net of tax, by component for the quarters ended March 29, 2024 and March 31, 2023 are as follows:

	Translation			Benefit Plan			Cash Flow			Net Investment
	Adjustment			Adjustment			Hedges			Hedges
Balance, June 30, 2023	$	(1,582	)	$	(5,948	)	$	688		$	1,272
Translation adjustment during the quarter		(3,096	)		-			-			-
Amounts reclassified from accumulated other comprehensive loss		-			(171	)		(6	)		222
Net current period other comprehensive (loss) income		(3,096	)		(171	)		(6	)		222
Balance, September 29, 2023		(4,678	)		(6,119	)		682			1,494
Translation adjustment during the quarter		5,155			-			-			-
Amounts reclassified from accumulated other comprehensive loss		-			(108	)		(183	)		(302	)
Net current period other comprehensive income (loss)		5,155			(108	)		(183	)		(302	)
Balance at December 29, 2023		477			(6,227	)		499			1,192
Translation adjustment during the quarter		(3,040	)		-			-			-
Amounts reclassified from accumulated other comprehensive loss		-			(191	)		40			156
Net current period other comprehensive (loss) income		(3,040	)		(191	)		40			156
Balance at March 29, 2024	$	(2,563	)	$	(6,418	)	$	539		$	1,348

	Translation			Benefit Plan			Cash Flow			Net Investment
	Adjustment			Adjustment			Hedges			Hedges
Balance, June 30, 2022	$	(2,266	)	$	(6,614	)	$	356		$	1,550
Translation adjustment during the quarter		(6,328	)		-			-			-
Amounts reclassified from accumulated other comprehensive loss		-			(89	)		657			136
Net current period other comprehensive (loss) income		(6,328	)		(89	)		657			136
Balance, September 30, 2022		(8,594	)		(6,703	)		1,013			1,686
Translation adjustment during the quarter		8,333			-			-			-
Amounts reclassified from accumulated other comprehensive loss		-			(7	)		(10	)		(585	)
Plan merger adjustment		-			(1,115	)		-			-
Net current period other comprehensive income (loss)		8,333			(1,122	)		(10	)		(585	)
Balance at December 30, 2022		(261	)		(7,825	)		1,003			1,101
Translation adjustment during the quarter		1,023			-			-			-
Amounts reclassified from accumulated other comprehensive loss		-			(29	)		(133	)		(91	)
Net current period other comprehensive income (loss)		1,023			(29	)		(133	)		(91	)
Balance at March 31, 2023	$	762		$	(7,854	)	$	870		$	1,010

Reconciliation for the changes in benefit plan adjustments, net of tax for the quarter ended March 29, 2024 are as follows:

	Amount Reclassified				Amount Reclassified
	Quarter Ended				Three Quarters Ended
	March 29, 2024				March 29, 2024
Changes in benefit plan items
Actuarial losses	$	(198	)	(a)	$	(461	)	(a)
Transition asset and prior service benefit		(3	)	(a)		(11	)	(a)
Total amortization		(201	)			(472	)
Income tax expense		10				2
Total reclassification net of tax	$	(191	)		$	(470	)

Reconciliation for the changes in benefit plan adjustments, net of tax for the quarter ended March 31, 2023 is as follows:

	Amount Reclassified				Amount Reclassified
	Quarter Ended				Three Quarters Ended
	March 31, 2023				March 31, 2023
Changes in benefit plan items
Actuarial gains	$	630		(a)	$	1,853		(a)
Transition asset and prior service benefit		(51	)	(a)		(152	)	(a)
Mark-to-market adjustment		(607	)			(1,821	)
Plan merger remeasurement adjustment		-				(1,115	)
Total amortization		(28	)			(1,235	)
Income taxes		(1	)			(5	)
Total reclassification net of tax	$	(29	)		$	(1,240	)

(a) These accumulated other comprehensive loss components are included in the computation of net periodic pension cost (see Note G, "Pension and Other Postretirement Benefit Plans" for further details).