Twin Disc at Midwest Ideas Conference: Strategic Growth and Diversification

On Wednesday, 27 August 2025, Twin Disc Inc. (NASDAQ:TWIN) presented at the 16th Annual Midwest Ideas Conference, unveiling its strategic evolution into a global power transmission leader. The company emphasized its diversified portfolio through recent acquisitions and a strong focus on hybrid and electric solutions. While the company is expanding globally, challenges such as seasonality and integration of acquisitions remain.

Key Takeaways

• Twin Disc aims for $500 million in revenue with 30% gross margins, leveraging acquisitions and hybrid solutions.
• Recent acquisitions like Veth, Katsa, and Kobelt enhance capabilities in marine, defense, and industrial markets.
• The defense segment shows robust growth, with increased spending in the US and NATO.
• The company is focusing on hybrid and electric markets, expecting significant revenue increase from these solutions.
• Seasonality affects performance, with the first fiscal quarter typically being the weakest.

Financial Results

• Fiscal year revenue exceeded $340 million, with gross margins at 27.2%.
• The share price rose nearly 50% from its pamphlet listing at $8.50 to a closing of $12.44.
• The company maintains a debt to EBITDA ratio below two times.

Operational Updates

• Twin Disc has made three major acquisitions in the past seven years: Veth (2018), Katsa, and Kobelt.
• The acquisitions are immediately cash-generating and support the company’s strategic shift from organic growth to strategic acquisitions.
• The defense backlog increased by 45% year-over-year, now constituting 15% of the total backlog.
• The company is investing in hybrid controllers and a test boat project in Australia to streamline hybrid solutions.

Future Outlook

• Twin Disc plans to reach $500 million in revenue, focusing on free cash flow conversion and expanding its hybrid/electric offerings.
• The company intends to continue mergers and acquisitions, targeting firms with regional strength and global expansion potential.
• Investments in facilities are planned to meet the growing demand in the military segment.

Q&A Highlights

• Acquisitions are expected to drive higher growth rates than traditional business, with Katsa poised for rapid expansion.
• The first fiscal quarter is typically the weakest due to European shutdowns, with the strongest performance in the fourth quarter.
• The Texas facility focuses on assembly, benefiting from a free trade zone.

Readers are encouraged to refer to the full transcript for a detailed analysis of Twin Disc’s strategic initiatives and financial performance.

Full transcript - 16th Annual Midwest Ideas Conference:

Urke Gerken, Assistant Account Manager: Good more oh, good morning and welcome to the ideas sixteenth annual ideas conference here in Chicago. My name is Urke Gerken, assistant account manager. Here today presenting is Twin Disc Inc traded on Nasdaq, ticker t w I n. Today, have John Batten and Jeff Kunstin, CEO and CFO.

John Batten, CEO, Twin Disc Inc: Take it away. Okay. Thanks, RK. Thank you everyone for spending your early morning with us. I’m John, CEO and Jeff Knutson here, our CFO.

Safe harbor statement, I know you all know that. Just a couple of themes to leave you with to think about when we’re going through, you know, just some of the highlights we wanna do leave you with. We’re a global power transmission provider, kind of in the off highway markets, whether it’s marine and water. Increasingly diversified portfolio with our acquisitions, what I’ll get into here in the presentation. Some of the things that have come up most recently are our defense markets have start to heat up both here in The US and in NATO.

A lot of things that we’ve been working on kind of through COVID and post COVID in the supply chain crunch was margin enhancement and operational efficiencies with our global footprint. We’ve done three acquisitions, three of our biggest acquisitions we’ve done in the last seven years, one in 2018 and the last two, I’ll talk about here most recently in the last year. Integrations have been going very well. We folded all of those organizations into ours into one operating model. And we’re looking at now that that is kind of behind us a strong operational cash flow generation going forward.

So just a quick overview, I’m assuming not many of you know our story, I’ll be very brief. But we’ve been around for a hundred and seven years. We were founded in Racine, Wisconsin. We have always been in the off highway market. We started off making gear boxes for ag tractors, Wallace tractor, Case tractor, and then got into the marine transmission market for the Great Lakes fishing boats.

And then in World War two, we did the transmissions for a lot of the landing crafts, and that kind of exploded our business around the world. Today, we have just about a thousand employees. We report manufacturing and distribution. Our revenue is just over 340,000,000 and gross margins of 27.2%. Now, you look at the the the fiscal twenty five pie charts here, this is a big shift for us.

You go back a decade and we were very much heavily weighted in North America. So this would have been two thirds North America, mostly The US and Canada, heavy in oil and gas, heavy in the offshore supply vessel market. But really through the cycles in oil and gas and our strategic objective to diversify away. And the fact that our last three acquisitions have been outside of The US, the biggest one in Netherlands, second biggest in Finland, and then we did one in Canada. You can see where we are today where Europe is our largest market.

North America and Asia are kind of split fifty fifty. And where we’d once spend fifty fifty land based products and marine based products with our vet acquisition, does asthma thrusters, We are very much now heavily weighted in the marine markets. But the special sauce of our company is, you know, we’ve been in the off highway markets for over a century. And as these markets, Manitowoc’s here, some other customers you probably know, shifting and looking at fully electric solutions and hybrid solutions. We are uniquely qualified with our controls technology that we’ve developed over the last thirty years to help them into this foray.

So we have a big a big push into the hybridization of our markets. And then lastly, that last bullet point, you know, got in the way, but Veth is an azimuth thruster company that makes steering propellers that propel vessels and steer them very popular in the European waterways. We saw this market, these products coming into our markets on the river and some of the cruise lines in The US. So we jumped at the opportunity to acquire them in 2018. And I’m now happy to report that North America is their largest section largest part of their backlog.

So just quickly looking at the evolution here, we started in 1918 and really, you go across the top until 1999, most of our growth was organic. We would develop a product, we’d sell it to an OEM. They traditionally would vertically integrate it, we would lose that business and then we would rinse and repeat. And it really wasn’t until 1999 that we started to go out and acquire companies to add product lines to our portfolio. We did a couple small ones in in the Italian, really focusing kind of on the the European market that in ’99 with TechnoDrive.

Rolla does the propellers for our surface drives and now does it for the Vet thrusters. And then BCS, which was a component company for the Italian yacht market. But really, we kind of took a decade off, but as I mentioned, the Vet Propulsion in 2018 was kind of a game changer for us. New product, new technology. They’d already been doing hybrid and diesel electric.

So they fully launched us into this space in engineering. And we’ve now taken these that technology to our traditional products whether it’s land based or marine. And then lastly, I would just add in the last year, we’ve done two acquisitions back to back, Katsa and Kobelt. Katsa is a finished company. They started off as purely a machining company making parts for, you know, the the Scandinavian, but primarily the Finnish engine companies.

And over the last, I would say, fifteen to twenty years, they developed their own gearbox line and that was growing and getting more popular. And and serendipitously, they’re supplying some of the the manufacturers of the NATO vehicles. Patria is the the number one. So as we went through the process, Finland was not in NATO. And when we closed the deal, Finland was in NATO.

Sweden joined soon after. And this this opportunity for us is beginning to explode. So just looking quickly at our product overview, give you a visualization. That is the on the top left, you know, our marine propulsion systems. This is a vessel that’s driven by our our VET diesel electric thrusters.

It can also be fully diesel. But basically, this is kind of the size of boat that is in our sweet spot whether it’s for marine transmissions or thrusters. And and from here, we only go bigger. Land based transmissions, we kind of have stationary applications and mobile applications. For mobile applications, this is by far our biggest airport rescue firefighting.

We supply the top two producers in the world, Rosenbauer and NAFCO. Rosenbauer is out of Austria and Minnesota, and NAFCO is out of The UAE. So our technology, very robust, very specialized application. These are basically NASCAR race cars, all wheel drive eight by eight and six by sixes. These are the trucks at international airports that have to get any place the plane would crash within, you know, a few miles of the airport over any terrain.

Very specialized application. Our transmissions allow for power dividing. You only need one engine. You can run the vehicle, and when you get to the crash site, you can run the vehicle and the pump off of the engine. And then the industrial space, you know, it’s it’s it’s a huge market, all sorts of products, reduction gear boxes, increases, power take offs, And this was the area of the business that we were trying.

If you go back to that pie chart, marine is by far the biggest, transmission segments biggest and industrial was was third. We have really focused on our acquisitions with Katsa and Cobalt, which has a huge line of industrial brakes, which is new for us, focusing on the on those products to make this mark this this business for us roughly in the same order of magnitude as as marine and transmission. As I mentioned at the beginning, really what’s changed, I would say, in the last eighteen months is the amount of defense. All of these projects that we’ve been working on that were somewhat dormant are are starting to increase. The number of projects and orders are increasing rapidly.

You can see just the the year over year increase in spending for the US Department of Defense, 13%, a 150% NATO. I think the big beautiful bill added another 40,000,000,000 for shipbuilding primarily focused on the defense space and we’re seeing that. And then we have a great array array of products up there. You can see our transmissions, our propulsion systems, and as I mentioned with Katsa for the the NATO, they they are doing they have transmissions, gear boxes, and transfer cases for those markets. And Patria seems to be the truck that is winning a lot of the the contracts right now.

You know, in our it’s 15%. So the defense as part of our backlog is now up to 15%, which is a 45% growth year over year. And the pipeline just continues to grow, and we see that that will probably, you know, increase nicely again this year. Just touching on our strategy here for a second before I turn it over to Jeff. As I mentioned, we’ve, you know, been in these markets for a hundred years and not much changed, I would say, for the better part of ninety five years.

It was really with diesel electric in our marine markets and then the push to hybridization where things started to change and we were starting to reengineer a lot of what we’ve done. We then started investing in electronic controls technology in the nineties and had a complete complete product portfolio of electronic controls for our marine transmissions, our power shift transmissions. And about five years ago, we invested heavily in developing hybrid controllers for all of our products, trying to make it something standard that could work with dual inputs, whether it was a battery, motor, two engines, natural gas, diesel, whatever it is, and we’ve been working on that for the better part of five years. And we are now starting to get very good traction in the marine space and some of our industrial customers with bringing this technology into the market. As I mentioned, with with our acquisitions expanding them, Veth, when we acquired them in The Netherlands, they were very much European focused.

Most of their business was in Northern Europe, primarily in The Netherlands along the rivers there. As I said, we’ve expanded their their reach now to The US with our global distribution network and in Asia. And as I mentioned, their number one market right now in backlog is North America and that continues to grow. So they’ve had incredible growth over the last few years and we could we’d we’re looking to do that with COTSA and Cobalt as well. In the age of tariffs, I would say we have a global footprint that not many of our our competitors have.

We’re in Europe. We’re in North America. We are in Asia with our joint venture in Japan. It’s an interesting time right now with tariffs, trying to figure out where we’re gonna where we’re gonna manufacture things. But we’re lucky to have the footprint that we have because we’re about to burst at the seams in Finland with with NATO business and we see the same thing in The Netherlands with our vet business.

So some of these products that we’ve been producing in in Finland and The Netherlands are gonna find their way to Texas and to some other manufacturing locations where we have capacity. As I mentioned, not just in the hybridization area, but a lot of our customers are looking to to streamline their supply base and it’s providing us great opportunity to package a bunch of industrial components and marine components together with our control system and and provide and be that one solution provider whether it’s hybrid or standard diesel propulsion. And happy to say that we’re probably not done on the m and a front. There are a couple of things that are also ticking, but it’s just the right time, the right opportunity, and we’re we’re working very hard to assimilate the two that we just made, but we think we’ll be ready, you know, and I would say six to twelve months to to continue to move forward, which are you know, we we’re gonna need to do something. We’ve we’ve stated publicly that our goal is to be at a minimum 500,000,000, 30% gross margins and the free cash flow conversion.

We have the we have the bones and the infrastructure to get to 400,000,000. We should be very close this year. But to reach that 500,000,000 goal is gonna take another acquisition and we have some in in target. So the other way to get to 500,000,000 is for the hybrid and electric market to take off. So just to put it into context of what it means for a company like Twin Disc that’s just provided mechanical components, it’s usually in the area of five to 10 times more content.

You know, for a let’s just say a 50 foot vessel, we’d probably be spending or the the customer would spend probably $30,000 on a pair of marine transmissions and maybe another 10,000 on a control system. When we do the hybrid system and supply the motors and the battery and put it all together, it’s in the area of a $330,000 price tag. Whether the market will bear it, people are willing to go there is another thing, but it is, it’s a huge leverage for us. And we’ve we have orders for these. We’ve delivered them.

Market hasn’t quite taken off yet, but we’re in a very good position for for this and across our portfolio. So one of the things that we’re trying to do in that is we’re trying to make it less expensive and less hodgepodge. So what we’ve done is we have a test boat, a 48 foot Riviera in Australia and we’ve pulled out the 700 horsepower diesel engines. We’ve replaced them with 470 horsepower diesel engines and electric batteries, electric motors, inverters, the whole system, and we’re just about to launch this in Australia this fall. And the reason we’re doing this is we’re trying to we’re trying to come to a a market solution that is less expensive and more streamlined and and and more market ready than just each one of the individual boat builders doing their own thing.

So you can see the the goal is there is to be able to supply a skid with the engine motor and and inverter all there for the the boat builder to use. So we’ll continue to tell you how we’re doing on this going forward, but this is one of the ways that we can see that we can help our market with our background, kind of launch into the hybrid electrification for a broader range of vessels. With that, I’ll turn it over to Jeff.

Jeff Kunstin, CFO, Twin Disc Inc: Hey everybody. Yeah, so I will go through just a little bit of some of the background, some of the financial stuff and some of maybe our strategic direction. So in terms of the footprint, as John pointed out, we’ve got a lot of options, right? As we look at the global tariff situation and where we manufacture and where we sell into, we have the ability to move production around the world to sort of tariff safe areas depending on where we’re selling into. The red stars that you see there are all manufacturing locations.

The newest being the one in Vancouver. That’s the Cobalt acquisition. We have company owned distribution, the blue dots that you see primarily in the Asia and The Pacific. We have customers, again, all over the world. We’ve got global sales, global support and I think the way we look at it, we’re well positioned to manage through any sort of tariff regime that comes through.

John mentioned M and A, We’ve done more than we’ve ever done as a company in the last few years. Looking back, the Vet acquisition in 2018 which was just prior to COVID that caused you know a little bit of a delay in our ability to capitalize on that acquisition, but it’s, you know, the growth has been incredible in the last few years and, you know, we don’t see a pause in that. The Kotz and Co Belt acquisitions, very accretive day one, generating cash, you know, really strong strategic fit within our markets and our products. And we fully intend to continue that. You know, we still have a strong balance sheet.

We were below two times debt to EBITDA. We have support of our lenders. We feel like we can certainly continue in the kind of range that we’ve been doing. The focus right now is on integrating the ones that we have done, but we continue to work that pipeline and as John said, within the next twelve months or so we feel like we should be in a position to continue that. And we’re focused on as we have been, diversifying away from oil and gas.

That’s always been a cyclical hangover for us. It’s great when it’s going, but when it goes away we really struggled. And we haven’t walked away from that market in any way. We continue to be as strong as we’ve ever been in that market, but we’ve grown the other sides of the business to make us a much healthier company. Everything that we We don’t buy fixer uppers, We buy successful companies that the playbook in the last three has been regional companies that have a great product, great technology, that do very well in their home markets and struggle to grow globally.

And we bring that global sales and support and reputation for quality and it’s been a great success for all three of the companies that we bought recently. These are two of them, right? Kotz and Cobalt. John mentioned them. Some of the details, maybe not worth going through all this, but you know, reasonably sized for us in that 20 to 40,000,000 range from a financial perspective.

We can manage those, we can integrate those, and they’re very accretive from day one. We’re becoming in some ways the acquirer of choice for this type of industrial company around the world, privately held, looking to family, looking to exit. We get a lot of feelers for those types of companies. We we treat them well. We we understand their their products, their customers, their markets and it’s been a really nice win for us in the last few years.

So as we look at what we’re going to do with capital allocation, think it’s it’s a similar approach that we have had right now bringing debt down. We just did an acquisition a few months ago. So we’re focused on bringing that debt down, getting the balance sheet ready to do something else. We brought the dividend back I think seven quarters ago now after an extended pause. We’ll evaluate that dividend in terms of leaving it flat or increasing it sort of on an annual basis, but right now we only brought it back because we felt we could, we would maintain that.

Continue to focus on organic growth. So John mentioned the explosion in the military segment for us and that will require some investment in our facilities to be able to satisfy that demand. So we’ll be investing there and acquisitions. Those are two obviously critical things for us to continue the momentum that we’ve got. And we’ll look at share repurchases.

I think you know it’s always a battle for us because we see such an opportunity for us to grow through acquisition and buying our stock doesn’t really help that. I think what we have seen and if you’ve looked at we released earnings last week. I think we’re getting now some good traction in the market for our execution on our strategy. I think if you look at the profile of us in pamphlet, we’re listed at 8 and a half dollars a share. As of yesterday we closed at $12.44.

So we’re up you know something short of 50% since that was printed. So I think we’re starting to get some good traction, some good understanding of where we’re going and belief in in our ability to execute that that strategy. So as you look at us, what are the highlights? Why would you invest in Twin Disc? We are We’re global, very global.

And we’re seen as a leader in our markets, in those niche markets where we’re delivering solutions in a way that local private companies couldn’t and the larger companies like a Caterpillar aren’t aren’t focused on it. So we we do well in those markets. We’re well positioned to benefit from the defense market and the hybrid transmission markets both driving a lot of backlog growth for us and we see a lot of momentum in those markets. We have a lot of operational initiatives going on. I think we’ve seen through last year quarter over quarter good increases in our margin performance.

We see that continuing again with our target of delivering at least 30% gross margin by 2030 and hopefully sooner than that. We’ve done I think very well the last three acquisitions that we’ve done. We’re just getting better at it. Identifying them, getting them integrated into our global sales and support network and helping them grow and them helping us grow. And through that, we continue to generate strong cash.

We have a strong balance sheet. So we’ve always been poised and a position to see what’s next and I think we’ll continue to do that. So any questions for John and I? For the newer acquisitions, are you generally acquiring companies that have more growth trajectory? If you look the company the company that you require?

John Batten, CEO, Twin Disc Inc: Yeah. So that I would say they’re all it it’s similar. They’re all regional. I would well, Katsa definitely is similar, the company in Finland. Definitely similar in that regional Scandinavia focus.

And we think their their growth trajectory could be very similar to vets, maybe even higher. But really they have higher meaning if we can bring our global presence to there, but they’re gonna achieve a growth trajectory just on their defense with their traditional customers. The issue we’re gonna have with Katsa is it’s a good one. It’s a new one for us is meaning that potentially the volume is growing so fast. We’re having to pull stuff out and produce it other places.

But yeah, no, we think that that one is COTSA will probably have quickest growth trajectory like what that has had. Cobalt has been more established in some of the international markets. They right now we’re rationalizing their dealer network and our distribution network, and seeing where we can where one plus one equals three. But we think certainly with their industrial break line, that we have a chance to grow that part of the business fairly quickly. So, you know, I think they’re both all three of those companies, Vet, Kotz and Cobalt, will probably see growth a higher growth rate than than what we see as the traditional twin disc because we’re taking them to new markets, new customers, new distributors.

So yeah, I I think that that part of the those three parts of the business are gonna be our catalyst for higher growth than said that, you know, oil and gas is starting to heat back up here as far as new units for us. We just had our first order for e frac. We have prototypes out there for natural gas engines in the oil and gas space. And I can’t overemphasize the amount of money that the US Navy is now gonna spend on building ships, you know, that that part of our businesses is seeing some strong tailwinds too. So but yeah, the three acquisitions for sure, better better than average growth for them.

They’re gonna be accelerating

Jeff Kunstin, CFO, Twin Disc Inc: our growth.

John Batten, CEO, Twin Disc Inc: Okay. Yeah.

Jeff Kunstin, CFO, Twin Disc Inc: Anybody else? Yep.

John Batten, CEO, Twin Disc Inc: Yeah. Can you talk about seasonality? Well, is. So now we have more it’s always been so our first we’re a July one company. So it’s usually almost always, we build through the year.

So, you know, our our weakest quarters that our first fiscal quarter, and it builds in our strongest is our fourth quarter, which would be the second calendar quarter. This is only now the only really, there’s two markets that can change that traditionally. One is oil and gas, and two is defense. It’s really for us, it’s the number of shipping days. All of our European subs have two to three weeks shutdowns in the summer, which is our calendar first quarter.

And as we have more subs in Europe, this is just it it just makes the hurt that so the first quarter is always gonna be our weakest. And then it really is a function now of shipping days, and that builds through our the second the second quarter for us, fourth calendar quarter has the the next fewest shipping days, and then our third and fourth quarter. So it’s usually almost always like that. It it builds through the year sequentially. Yeah.

Well, think we’ve we’ve mentioned we’ve mentioned I mentioned it in the call, Ceramic. So the the just Google Ceramic. They’re a very new relatively new company with I think they have a billion dollars in investing. They’re they’re run by a former Navy SEAL, and he is this company is one of the best things that’s happened to US defense ship building in my career. And they are looking to take over, you know, be the the the lead in the unmanned vessels.

And so they started with jet ski size, and now they’re now they’re coming up into where where our transmissions fit. So they’re doing, you know, a 100 to 200 foot vessels, 200 to 300, and they’re going to 300 to 400, and when you get up to the 150 foot and above, those are either gonna be four of our marine transmissions are five, each one’s a 150,000, and the amount of vessels that are on order is staggering. I mean, it’s so you go back in time, what it is, is these are transmissions we have built for crew boats and supply boats, fast supply vessels. So it’s a product that’s tried and true and we know it. It’s so it’s it’s it it’s right in our wheelhouse.

Jeff Kunstin, CFO, Twin Disc Inc: We’re we’re the only American company that Yeah. Provides that transmission. So it it it really makes it a nice opportunity for us.

John Batten, CEO, Twin Disc Inc: But if you just just Google Cyronic, it’ll give you window into the amount of activity and money that they’re throwing at catching up to China as far as building vessels for the Pacific. Sure. So At one point, there was the idea that gave more efficiency in Texas. Yeah. So we always Oh, sorry.

Yeah. Sorry. Yeah. Historically, always been in Racine for over a hundred years. We had taken in 2017, we had moved our PTO or industrial business to India for assembly.

There that was a logistical nightmare and I won’t go into it, but we moved we moved assembly back. And we moved it back to Racine and quickly realized that that was probably a worse decision than keeping it in India. So we built the plant in Texas after a quick search. It’s in a it’s in a free trade zone. And yeah, it’s it’s more so we built the plant specifically to focus on assembly and and quick response assembly.

So we’re building $150,000 transmissions in Racine and we’re trying to build a thousand dollar PTOs next to it. The cadence and everything was completely different. So that’s why we built the facility in Texas. And we’re going to be Texas is only going to continue to grow because of the the free trade zone aspect of it. We can bring parts in, assemble them and ship them out.

So I would look to see more of our business there. We are actually assembling vet thrusters for the North American market there. So we’re already started to move other products into Texas. But right now, it’s strictly it’s strictly just an assemble assembly facility.

Jeff Kunstin, CFO, Twin Disc Inc: And you moved your headquarters to the ward.

John Batten, CEO, Twin Disc Inc: We moved our headquarters to the Third Ward in Milwaukee. That was a I I had thought that that was probably gonna be necessary, but familiar story. During COVID, people got used to not commuting. It’s it’s so at the end of the day, when you looked at the executive team and that that next level that was there, it was a longer commute for three of us and a shorter commute for 18 of us. So it only it it only made sense and it’s it’s done wonders for recruiting at that at that level.

It’s just it’s we’re Racine, Wisconsin is the it’s the largest city in the Midwest. It’s the farthest away from an interstate. It’s it’s, you know, it’s 30 when when you when you get to the when you get to the exit, it’s you still have thirty, thirty five minutes to get to our office. So it’s a challenge. Yeah.

What’s behind the

Jeff Kunstin, CFO, Twin Disc Inc: flurry of activity in the last four or five years? You guys have been around a long time. What suddenly changed?

John Batten, CEO, Twin Disc Inc: So I think what changed, it started with the vet acquisition. It started with this management team living through, you know, a bunch of oil and gas, primarily pressure pumping cycles and figuring out that we got to do something different. And the number one thing we had known the vet family and known their company, and he was Eric was 50 years old, and he didn’t like cycles, and he wanted to exit. So that really was the catalyst. And then, you know, we acquired them in 2018.

We’re going through the integration. It was really our first major integration as a as a management team. We had COVID, you know, that just kind of threw everything out. You know, you’re in survival mode for the better part of a year, a year and a half, which quickly went into the supply chain crisis, which was a completely different crisis. But you could see the effect of bringing in these companies into the morale, just everyone’s like, oh, we have opportunity.

We have new products. Our distributors were ecstatic. There was new life, new product, and you know, that was okay. Let’s look at the next one. We think we’ve got this down.

We think we’ve found something that fit. We can do this. We can bring product, new people, integrate them, different language. And, you know, we started that the Katsa was the next one, which quickly morphed into Cobalt. To answer your question, there’s energy new product, new opportunity.

You definitely get, you know, the excitement from your distributors that, oh, you’re you’re bringing us new product, new opportunity, and it just it’s been feeding on it. And it’s, you know, it’s just an affirmation of the strategy of, you know, we’re not trying to get rid of oil and gas, but there’s a there’s a much bigger world out there. So and as Jeff said, you know, it’s it’s decades of relationships with these with these companies. None none of these companies that you my grandfather tried to acquire Cobalt in 1973, and Jack Cobalt said no. I tried in 2012.

They said we lost out to private equity. The management team lived through private equity, bought themselves out just before COVID, and we’re having a hell of a time. And and and they they came to they came I said, no. I’m like, we haven’t even finished the Katsa. The Katsa acquisition, we can’t do another one, but they were they were insistent.

They’re like, this is this is the home for us. So I said, oh, alright. Well, you know, I’ll take it to the board. But it was yeah. So to Jeff’s point, it’s it’s it’s been amazing to see in our market, in our relationships with companies that are smaller and private that, you know, there’s definitely a generational shift and there’s more opportunity there for us, for sure.

Anything else? What’s your main

Jeff Kunstin, CFO, Twin Disc Inc: EPS number for this year? We wait till now to ask the hard question. Yeah, let me think about that, because what we tried to do in the press release was to lay out those things that we would say are non operational, non cash, that

John Batten, CEO, Twin Disc Inc: should give

Jeff Kunstin, CFO, Twin Disc Inc: you a bridge to that. Know, the currency loss that we had, is sort of an inter company balance sheet translation kind of thing, defined benefit amortization, which is a pension non cash thing. So I can can do some math on that for you, but that should Yeah. That should in the release. It’s in the release.

Yeah. It’s in the release. Yeah. We have a table in there for the quarter and the year.

John Batten, CEO, Twin Disc Inc: Yeah. So then talking about the currency translation, I’ll just pontificate on that. So, you know, we have corporate is here in The US. Now, by far, the majority of those a thousand employees, probably a little bit more than 700 or more outside of The US. So we have this corporate overhang and the European subs.

So that’s the currency translation affects us more. It just just because we’re generating cash and earnings outside The US, but we have this overhead cost. So we one, we would love to find one of these acquisitions here in The US to grow grow sales here. But two, and and I touched on it in the in the conference call, we we restructure our organization and we’re trying to make the corporate overhead less and push more of the management and the and the operation of the business into the businesses. So we split the business up into to four product segments and the people that are running those product segments are out in the out at the facilities.

So we’ve shifted leadership and responsibility to the plants to try to, you know, again, and it makes sense. There’s more ownership, there’s more it’s more three sixty running and it’s it’s it’s lowering our overhead here in in in corporate at the same time. Alright. Thank you.

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