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1Q 2027 Earnings Presentation NASDAQ: TWIN We Put Horsepower to Work.
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Disclosures Safe Harbor This presentation contains statements that are forward -looking within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. These statements are based on management’s current expectations that are based on assumptions that are subject to risks and u ncertainties. Actual results may vary because of variations between these assumptions and actual performance. Investors are referred to Twin Disc ’s fiscal year 2026 Annual Report and Form 10 -K, “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Forward-Looking Information,” which outlines certain risks regarding the Company’s forward -looking statements. Copies of the Company’s SEC filings may be obtained from the SEC, and are available on Twin Disc’s web site ( www.twindisc.com), or by request from the Investor Relations department at the Company. Non-GAAP Financial Disclosures Financial information excluding the impact of asset impairments, restructuring charges, foreign currency exchange rate change s and the impact of acquisitions, if any, in this presentation are not measures that are defined in U.S. Generally Accepted Accounting Principles (“GAAP”). These items are measures that management believes are important to adjust for in order to have a meaningful comparison to prior and future pe riods and to provide a basis for future projections and for estimating our earnings growth prospects. Non -GAAP measures are used by management as a performan ce measure to judge profitability of our business absent the impact of foreign currency exchange rate changes and acquisitions. Management analyz es the company’s business performance and trends excluding these amounts. These measures, as well as EBITDA, provide a more consistent view of performa nce than the closest GAAP equivalent for management and investors. Management compensates for this by using these measures in combination with the GAAP measures. The presentation of the non -GAAP measures in this press release are made alongside the most directly comparable GAAP measures. 2
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Investment Highlights Leader in global power transmission technology Diversified IP-protected portfolio Healthy backlog and robust project pipeline Benefitting from industry tailwinds Margin enhancement driving results Successful integration of acquisitions Strong cash flow generation and balance sheet 3
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1Q Financial & Operational Highlights 4 $88.7M Sales 10.9% increase YoY $3.4M Net Income $7.7M EBITDA $5.6M FCF 63% increase YoY • Defense continues to be a key growth driver supported by growing U.S. Navy and NATO demand • Record six-month backlog of $190.6 million up 7% from fiscal year end, supported by strong interest and sales momentum behind a robust project pipeline • Strong free cash flow of $5.6 million and reduced net debt despite increased capital expenditures to support future growth • Increased quarterly cash dividend by 25% to $0.05 per share • Building on fiscal 2026 momentum , with strong demand across our end markets
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Defense Remains a Key Long-Term Driver Delivering Results ~24% Defense as a % of total backlog* +104% YoY increase in Defense total backlog* $30–50M Identified defense pipeline Major Geographies North America Europe Asia Pacific Select Defense End Users * Backlog figures reflect a period greater than six months. Defense spend represents management estimates. 5
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Marine & Propulsion Systems • Performance driven by continued demand for Veth and Kobelt product • Improved military demand for marine transmissions • Improved commercial maritime demand in Asia • Generally strong market conditions 6 14% 1Q27 YoY sales increase
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Land-Based Transmissions • FY 1Q27 sales decreased by 15% YoY • Beginning in FY 1Q27, all Katsa sales previously classified in Land-Based Transmission are now classified in Industrial; in FY 1Q27, $4.7 million in revenue that would previously have been classified in Land-Based Transmission was classified in Industrial • Oil and gas continues to increase as a percentage of total backlog and higher alternative fuel sales carry a more favorable margin profile • Increase in global demand for energy related products and orders for energy applications • Improving sentiment among North American energy customers points to additional investment in frack rigs, rebuilds, and new units • Strengthening demand trends across core geographic markets: North America, Latin America, and China • Continued progress on next-generation electrified and hybrid solutions supporting long-term demand 7
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Industrial 8 • 1Q27 sales increased 35% YoY • Beginning in FY 1Q27, all Katsa sales previously classified in Land-Based Transmission are now classified in Industrial; in FY 1Q27, $4.7 million in revenue that would previously have been classified in Land-Based Transmission was classified in Industrial • Katsa is performing well and represents a strong near-term growth driver via defense vehicle components in Europe • Katsa continues to make progress on new 54,000 square foot assembly plant in Finland; expected to be fully operational in May 2027 • Katsa is benefiting from data center construction by providing components to major engine manufacturers who design and install backup power systems for these facilities • Kobelt product line contributing to segment growth • Continued demand in North American construction & recycling markets
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$163.3 $175.3 $179.5 $178.3 $190.6 117% 111% 107% 100% 94% 50.0% 70.0% 90.0% 110.0% 130.0% 150.0% 170.0% 190.0% $0.0 $20.0 $40.0 $60.0 $80.0 $100.0 $120.0 $140.0 $160.0 $180.0 $200.0 1QF26 2QF26 3QF26 4QF26 1QF27 Backlog ($MM) Inventory (% Backlog) Record Six-Month Backlog Backlog And Inventory % Of Backlog Note: Backlog figures are reflective of a six -month period. The six -month order backlog is considered more representative of ope rating conditions than total backlog. 9 • Six-month backlog at 1QF27 was approximately $190.6 million, up from $178.3 million at fiscal year end and $163.3 million a year ago, and a record on a reported basis • Inventory as a percentage of backlog decreased to 94% in the quarter on the strength of improving operational execution • Continue to make progress on shipments and reducing past-due backlog
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2030 FY Targets $500M Revenue 30% Gross Margins >60% FCF Conversion Rationalize global footprint for efficiency and customer response M&A priorities: Industrial and Marine Technology (Hybrid focus) Leading Hybrid/Electric solution provider for niche marine and land-based applications Strategic acquisitions to reach new markets and geographies Increased focus on controls and system integration rather than individual components Long-Term Strategy 10
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Financial Overview 11
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Sales ($ in millions) Financial Performance Earnings Per Share $80.0 $88.7 1QF26 1QF27 ($0.04) $0.24 1QF26 1QF27 12 • Sales performance driven by expanding demand from the defense sector, improved oil and gas demand, and generally strong market conditions across the global enterprise • Contribution from acquisitions and operational execution driving performance and sales growth • EPS improvement was driven by an increase in operating income and a decrease in interest expense and other expense when compared to the first quarter of fiscal 2026
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Sales By Product Group ($ In Millions) Sales Diversity Sales Mix By Geography $48.2 $55.2 $17.6 $15.0 $10.4 $14.0 $3.8 $4.6 1QF26 1QF27 Marine & Propulsion Systems Land-Based Transmissions Industrial Other 33% 26% 39% 46% 18% 20% 10% 7% 1QF26 1QF27 North America Europe Asia Pacific Other 13 • Consistent demand across core marine and propulsion end markets, particularly Veth products • Acquired businesses (Katsa, Kobelt) continue to broaden product and end-market mix • Double digit sales growth in Europe was primarily driven by defense demand for Katsa products • Double digit sales growth in Asia Pacific market was primarily driven by improved commercial maritime demand
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Margins & Near-Term Expectations First Quarter Gross Margin Drivers 28.7% 28.7% 1QF26 1QF27 First Quarter Twin Disc Gross Margin 14 • Consistent YoY margins reflect stronger growth in Katsa and Veth, which operate at gross margins below the company average and continue to improve. This was partially offset by favorable product mix in Land-Based Transmissions, including higher alternative fuel unit sales • Long-term strategy continues to focus on enhancing margin profile and driving long-term profitability across the business
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Strengthened Balance Sheet $43.7 $14.2 $29.5 $39.8 $26.7 $13.1 Total Debt Cash Net Debt 1QF26 1QF27 Balance Sheet ($ in millions) LTM EBITDA ($ in millions) $22.0 $32.9 1QF26 1QF27 1.3x 0.4x 1QF26 1QF27 Net Leverage Ratio 15
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Capital Allocation Framework Organic Growth • Research & Development • Geographic Extension • Marketing Bolt-On & Transformational Acquisitions • Strategic Fit • Financial Fit (Internal Rate of Return > WACC) • Ability to enhance network and capabilities Focus on Further Diversifying Offerings to Strengthen Market Positioning • Cash Dividends • Share repurchases • Debt Reduction Return Capital To Shareholders & Deleverage 16
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Summary 17 • First quarter results built on fiscal 2026 momentum; healthy defense demand and a record six-month backlog • Gross margins are expected to improve over time as we diversify end markets and benefit from greater operating leverage • Defense momentum continues to build in both backlog and pipeline, supporting longer-term growth • Investing for future growth, including expansion of our European footprint and the build-out of our manufacturing capabilities in Racine with financial discipline that strengthens our balance sheet and liquidity • Focus on executing on operational initiatives, optimize our global footprint, and invest in long-term growth, while carefully allocating capital and returning it to shareholders
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Q&A 18
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Appendix 19
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1QF27 1QF26 Net Sales $88,745 $79,996 Less: Acquisition - - Less: Foreign Currency Impact (708) - Organic Net Sales $89,453 $79,996 RECONCILIATION OF REPORTED NET SALES TO ORGANIC NET SALES (In thousands; unaudited) 20 Reconciliation Of Non-GAAP Financial Measures To Reported Financial Measures
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Reconciliation Of Non-GAAP Financial Measures To Reported Financial Measures September 30, 2026 September 30, 2025 Current maturities of long -term debt $1,500 $3,000 Long-term debt 38,295 40,719 Total debt $39,795 $43,719 Less cash 26,728 14,241 Net debt $13,067 $29,478 LTM EBITDA 32,883 22,011 Net Leverage Ratio 0.4x 1.3x RECONCILIATION OF TOTAL DEBT TO NET DEBT TO EBITDA LEVERAGE RATIO CALCULATION (In thousands; unaudited) 21
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Reconciliation Of Non-GAAP Financial Measures To Reported Financial Measures 1Q27 FY26 4QF26 3QF26 2QF26 (As Adjusted) 1QF26 Net Income (loss) attributable to Twin Disc $3,445 $27,077 $9,360 $3,325 $14,909 ($518) Interest expense 428 3,078 715 790 772 800 Income tax expense 415 (13,974) (2,477) 1,839 (14,318) 983 Depreciation and amortization 3,399 13,746 3,520 3,425 3,336 3,464 Earnings before interest, taxes, depreciation and amortization (EBITDA) $7,687 $29,927 $11,118 $9,379 $4,699 $4,729 RECONCILIATION OF CONSOLIDATED NET INCOME TO EBITDA (In thousands; unaudited) 22
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Reconciliation Of Non-GAAP Financial Measures To Reported Financial Measures 1Q27 1Q26 Net cash provided (used) by operating activities $11,340 ($7,524) Acquisition of property, plant, and equipment (5,784) (3,430) Free cash flow $5,556 ($10,954) RECONCILIATION OF NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES TO FREE CASH FLOW (In thousands; unaudited) 23