Power transmission equipment company Twin Disc, Inc., announced additional restructuring and cost reduction activities aiming to further reduce expenses, as a result of challenging global market conditions within the company's oil and gas, global pleasure craft and Asian commercial marine markets.
Twin Disc said it expects $4.3 million of annual savings from these actions once fully implemented, plus a further $6 million of annual savings announced in the fiscal 2015 fourth quarter.
The company’s current plan includes reducing base salaries for corporate officers, as well as base salaries and wages of salaried and hourly employees at the company's headquarters and domestic manufacturing facilities. The plan will also see the elimination of 15 salaried positions and temporary layoffs at its Racine operation, plus reduced marketing, travel and professional service expenses.
Twin Disc President and CEO John H. Batten said, “As we discussed over the past two quarters, we are adjusting our business for challenging global market conditions within the company's oil and gas, global pleasure craft and Asian commercial marine markets. We understand the actions we announced today and in the fourth quarter are difficult for our employees and communities. But given the uncertainty in many of our traditional markets, these cost reduction activities are necessary. We will continue to evaluate additional activities to align our global staffing and manufacturing capacity with current and forecasted market demand.”
Batten continued, “In addition, we recently announced capital reallocation initiatives, including the sale of our distribution territories in the mid-Atlantic and south east regions of the United States. These divestitures were completed in the third quarter of fiscal 2015 and the first quarter of fiscal 2016, respectively, and generated approximately $5 million in capital. The proceeds from these divestitures will be used for investments in new technologies and product line enhancements aimed at generating growth and greater profitability. We remain firmly committed to the long-term growth potential of our markets, and we are confident these cost reduction and capital reallocation initiatives will improve our competitiveness as global markets recover. With a strong customer base and outstanding global reputation for technical innovation, product quality and service, I am confident the company is well positioned for future growth.”