Twin Disc, Incorporated Q3 FY2026 earnings call

• Third quarter sales increased 19% year - over - year to $96.7 million, with organic sales growth of 7%. - Gross margin expanded to 28.1%, EBITDA increased to 9.4 million, and EBITDA margin expanded by approximately 480 basis points. - Free cash flow generation was $1.8 million in the quarter. - Six - month backlog increased sequentially to approximately $179.5 million. - Defense - related business has robust demand across multiple programs and geographies, with defense representing an increasingly meaningful and durable component of backlog. - Marine and propulsion systems have healthy demand across various applications. - Land - based transmissions had strong growth, with some shipments shifted due to customer timing but viewed as timing - related. - Industrial sales were boosted by Cobalt contribution. - Backlog increased, inventory improved as a percentage of backlog to approximately 89%, showing progress in working capital management.

Marine and propulsion systems: Sales up 20% year - over - year. Land - based transmissions: Sales increased 22.2% year - over - year. Industrial sales: Increased 15.2% year - over - year. Defense - related business: Represents approximately 15% of backlog, defense backlog increased year over year by roughly 20%, and there is a pipeline of roughly 50 to 75 million.

• Expect stronger second half, with six - month backlog indicating near - term demand visibility. - Defense business has sizable opportunity with a pipeline of 50 - 75 million. - Expect tariff - related impacts in upcoming quarter to be approximately 1% to 3% of cost of goods sold. - Prioritize investing in business to support growth, maintain strong and flexible balance sheet, and be disciplined in capital deployment to convert backlog into revenue and cash.

• Actual results could differ materially from forward - looking statements as per company's annual report on Form 10 - K. - Tariff risk, with need to closely monitor evolving landscape and execute mitigation initiatives.

Q: There are no further questions at this time, A: There are no further questions at this time