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    Tze-Kiang Wong • Stonegate Capital Partners

    Tze-Kiang Wong's questions to Twin Disc Inc (TWIN) leadership

    Tze-Kiang Wong's questions to Twin Disc Inc (TWIN) leadership • Q2 2025

    Question

    Tze-Kiang Wong of Gabelli Funds inquired about the performance of the Oil & Gas segment, asking for a quantification of its revenue contribution and year-over-year decline. He also asked about the geographic source of quoting activity, the company's CapEx outlook, its free cash flow conversion target, developments in R&D, and the status of the electric frac fleet pilot program.

    Answer

    Executive Jeffrey Knutson explained that the Oil & Gas segment accounted for just under 8% of revenue and was down about 24% year-over-year. He noted that quoting activity was broad-based, including North America, Asia, and South America, and described it as a 'renewed level of activity.' Knutson projected full-year CapEx in the $12 million to $14 million range and stated that while converting 60% of EBITDA to free cash flow is a stretch, the company is on a good trend after a strong Q2. On R&D, he highlighted a continued focus on the hybrid electric market without announcing specific new products. Finally, he described the electric frac fleet pilot as 'stable' and 'ongoing' with no newsworthy updates for the quarter.

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    Tze-Kiang Wong's questions to Twin Disc Inc (TWIN) leadership • Q1 2025

    Question

    Tze-Kiang Wong of Stonegate Capital Partners inquired about the full-year outlook for free cash flow, the status of the company's e-frac offering, and the revenue contribution from the oil and gas business.

    Answer

    Executive Jeffrey Knutson projected a return to positive free cash flow for the rest of the year, attributing the quarterly deficit to accrual payments and inventory increases from order pushouts. CEO John Batten reported that e-frac prototypes are still in the field but have not yet secured fleet orders, as customers are currently focused on traditional rigs. Knutson also specified that the oil and gas business constituted 10% of quarterly revenue, down from 15% in the prior-year period, which negatively impacted product mix.

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