Twin Disc Inc., a Milwaukee‑based power transmission specialist, addressed investors at the 17th Annual Midwest IDEAS Conference hosted by Freeport Advisors on August 27, 2026.
For fiscal 2026 the company posted record revenue of $381 million and earnings before interest and taxes of roughly $30 million, a near‑50% increase from the prior year. Reported earnings per share were $1.86, helped by a reversal of a full valuation allowance on tax items. Free cash flow reached $92 million for the year, including $17 million generated in the fourth quarter, while gross margins settled in the 27%‑28% range. The backlog climbed to a record $178 million, representing a six‑month backlog that annualizes to about $360 million, and past‑due backlog fell by $8 million to $9 million in Q4. Twin Disc’s stock has risen 87% over the past twelve months and is up 42% year‑to‑date, trading around $23.19 at the time of reporting.
Defense contracts now account for roughly 17% of the total backlog, equivalent to $30‑$40 million, and the defense backlog grew more than 50% year over year. Management cited an additional $30‑$50 million of known projects in the pipeline and highlighted the company’s unique position as the sole North American and U.S. manufacturer of transmissions in its horsepower range for unmanned naval vessels.
The firm’s recent acquisition strategy includes the 2020 purchase of Dutch azimuth thruster maker Veth for about $60 million, which has expanded from $55 million to roughly $100 million in revenue. Earlier acquisitions of Finland‑based Katsa and Vancouver‑based Kobelt added industrial and marine gearbox capabilities and a foothold in the European military market. Management indicated the balance sheet can support another acquisition in the $40‑$60 million range.
Marine propulsion remains the core of Twin Disc’s business, contributing about 60% of total revenue. Land‑based transmissions and industrial products make up the remainder, with a 30% market share in frac transmissions competing against Allison and Caterpillar, and an 80%‑90% share of non‑Oshkosh airport rescue and firefighting vehicle business. The company also maintains a niche tank‑retriever line with little competition. Exposure to China fluctuates by 20%‑25% as volumes respond to local energy‑independence initiatives.
Twin Disc is expanding its hybrid and electric portfolio, supplying full‑electric ferries in Sydney, the electric "Maid of the Mist" tour vessel in Niagara Falls, electric picnic boats for Hinckley Yachts, and electric tugboats and solar‑powered river cruise vessels. Production runs typically involve small batches of five to twelve units.
Looking ahead, the company targets $500 million in revenue, a 30% gross margin and a 60% conversion of EBITDA to free cash flow by 2030. A new credit agreement with BMO and JPMorgan provides approximately $60 million of available capacity. The quarterly cash dividend was raised 25% to $0.05 per share.
Twin Disc operates manufacturing sites in Wisconsin, Texas, Vancouver, Finland, Belgium, the Netherlands, Italy and Switzerland, with sales offices in Singapore, New Zealand, Australia and China.
