Ducommun Incorporated (NYSE: DCO) (“Ducommun” or the “Company”)
today reported results for its second quarter ended July 1,
2023.
Second Quarter 2023
Recap
- Net revenue was
$187.3 million
- Net income of $2.4
million, or $0.17 per diluted share
- Adjusted net income
of $7.3 million, or $0.54 per diluted share
- Adjusted EBITDA of
$26.1 million, or 13.9% of revenue
- Record backlog of
$1.0 billion
- Completed stock
offering with net proceeds of $85.1 million
- Completed the
acquisition of BLR Aerospace
“Q2 was an excellent quarter for Ducommun as we
grew our topline both year-over-year and sequentially, led by
strong Commercial Aerospace demand and steady performance from our
defense business while also delivering good improvements in gross
and Adjusted EBITDA margins,” said Stephen G. Oswald, chairman,
president and chief executive officer. “Quarterly revenue exceeded
$180 million for a third consecutive quarter, increasing to $187.3
million, up 8% over Q2 2022 with narrow-body aircraft once again
the catalyst in driving Commercial Aerospace revenues up 37%
year-over-year. The Company's gross margins as well expanded 150
bps year-over-year from 19.9% to 21.4% for the quarter as we
continued improving our operating performance which includes the
meaningful on-going restructuring activities that are expected to
be completed by the end of this year. Finally, the Company's
backlog reached an all-time high and exceeded $1 billion for the
first time, driven by the significant growth in orders in our
defense business.
“As we previously announced in May, we completed
a stock offering with net proceeds of over $85 million and used it
to pay down on the debt from the BLR acquisition that was completed
in April as we continue to strategically manage our balance sheet
and our working capital needs. BLR is another important acquisition
as we continue to implement Ducommun's strategy of increasing
Engineered Products and Aftermarket revenue in our portfolio.
“Ducommun also participated at the Paris Air
Show in June which further validated the Commercial Aerospace
recovery has exceeded expectations with plenty of runway ahead.
Airbus’ announcement during the Air Show that it had received the
single largest aircraft order ever, by number of aircraft, along
with Boeing’s announcement of their single largest order in South
Asia, were welcomed news, as we look towards the second half of
2023 and strong years ahead.”
Second Quarter
Results
Net revenue for the second quarter of 2023 was
$187.3 million compared to $174.2 million for the second quarter of
2022. The year-over-year increase of 7.5% was primarily due to the
following:
- $21.2 million
higher revenue in the Company’s commercial aerospace end-use
markets due to higher build rates on large aircraft platforms and
other commercial aerospace platforms; partially offset by
- $10.8 million lower
revenue in the Company’s military and space end-use markets due to
lower build rates on military fixed-wing aircraft platforms and
various missile platforms.
Net income for the second quarter of 2023 was
$2.4 million, or $0.17 per diluted share, compared to $4.1 million,
or $0.34 per diluted share, for the second quarter of 2022. This
reflects higher selling, general and administrative (“SG&A”)
expenses of $6.2 million, higher interest expense of $3.1 million,
and higher restructuring charges of $2.1 million, partially offset
by higher gross profit of $5.5 million and higher other income of
$4.1 million.
Gross profit for the second quarter of 2023 was
$40.1 million, or 21.4% of revenue, compared to gross profit of
$34.6 million, or 19.9% of revenue, for the second quarter of 2022.
The increase in gross profit as a percentage of net revenue
year-over-year was primarily due to favorable product mix and
favorable manufacturing volume.
Operating income for the second quarter of 2023
was $5.0 million, or 2.7% of revenue, compared to $7.8 million, or
4.5% of revenue, in the comparable period last year. The
year-over-year decrease of $2.7 million was primarily due to higher
SG&A expenses and higher restructuring charges, partially
offset by higher gross profit. Adjusted operating income for the
second quarter of 2023 was $15.2 million, or 8.1% of revenue,
compared to $14.2 million, or 8.2% of revenue, in the comparable
period last year.
Interest expense for the second quarter of 2023
was $5.7 million compared to $2.7 million in the comparable period
of 2022. The year-over-year increase was primarily due to higher
interest rates and a higher outstanding debt balance.
Adjusted EBITDA for the second quarter of 2023
was $26.1 million, or 13.9% of revenue, compared to $24.1 million,
or 13.8% of revenue, for the comparable period in 2022.
During the second quarter of 2023, the net cash
provided by operations was $9.2 million compared to $25.0 million
during the second quarter of 2022. The lower net cash provided by
operations during the second quarter of 2023 was primarily due to
lower accounts payable and lower contract liabilities, partially
offset by lower contract assets and lower accounts receivable.
* The Company defines backlog as potential
revenue and is based on customer placed purchase orders and
long-term agreements (“LTAs”) with firm fixed price and expected
delivery dates of 24 months or less. Backlog as of July 1,
2023 was $1,010.2 million compared to $960.8 million as of
December 31, 2022. Under ASC 606, the Company defines
performance obligations as customer placed purchase orders with
firm fixed price and firm delivery dates. The remaining performance
obligations disclosed under ASC 606 as of July 1, 2023 were
$916.7 million compared to $853.0 million as of December 31,
2022.
Business Segment
Information
Electronic Systems
Electronic Systems segment net revenue for the
quarter ended July 1, 2023 was $107.1 million, compared to
$109.7 million for the second quarter of 2022. The year-over-year
decrease was primarily due to the following:
- $8.4 million lower
revenue within the Company’s military and space end-use markets due
to lower build rates on military fixed-wing aircraft platforms and
various missile platforms; partially offset by
- $3.1 million higher
revenue in the Company’s commercial aerospace end-use markets due
to higher build rates on other commercial aerospace platforms
Electronic Systems segment operating income for
the quarter ended July 1, 2023 was $9.5 million, or 8.9% of
revenue, compared to $13.6 million, or 12.4% of revenue, for the
comparable quarter in 2022. The year-over-year decrease of $4.1
million was primarily due to unfavorable product mix and
unfavorable manufacturing volume.
Structural Systems
Structural Systems segment net revenue for the
quarter ended July 1, 2023 was $80.2 million, compared to
$64.5 million for the second quarter of 2022. The year-over-year
increase was primarily due to the following:
- $18.1 million
higher revenue within the Company’s commercial aerospace end-use
markets due to higher build rates on large aircraft platforms and
other commercial aerospace platforms; partially offset by
- $2.4 million lower
revenue within the Company’s military and space end-use markets due
to lower build rates on various missile platforms and military
fixed-wing aircraft platforms, partially offset by higher build
rates on military rotary-wing platforms.
Structural Systems segment operating income for
the quarter ended July 1, 2023 was $5.4 million, or 6.7% of
revenue, compared to $1.3 million, or 2.0% of revenue, for the
comparable quarter in 2022. The year-over-year increase of $4.1
million was primarily due to favorable product mix and favorable
manufacturing volume, partially offset by unfavorable other
manufacturing costs.
Corporate General and Administrative
(“CG&A”) Expenses
CG&A expenses for the second quarter of 2023
were $9.9 million, or 5.3% of total Company revenue, compared to
$7.1 million, or 4.1% of total Company revenue, for the comparable
quarter in the prior year. The year-over-year increase in CG&A
expenses was primarily due to higher compensation and benefits
costs of $2.7 million, a portion of which was related to the
acquisition of BLR.
Conference Call
A teleconference hosted by Stephen G. Oswald,
the Company’s chairman, president and chief executive officer, and
Suman B. Mookerji, the Company’s senior vice president, chief
financial officer, controller and treasurer will be held today,
August 3, 2023 at 10:00 a.m. PT (1:00 p.m. ET) to review these
financial results. To access the conference call, please
pre-register using the following registration link:
https://register.vevent.com/register/BI6e5ee2adb0774592be5661a881ed5247
Registrants will receive a confirmation with
dial-in details. Mr. Oswald and Mr. Mookerji will be speaking on
behalf of the Company and anticipate the call (including Q&A)
to last approximately 45 minutes. A live webcast of the event can
be accessed using the link above. A replay of the webcast will be
available on the Ducommun website at Ducommun.com.
Additional information regarding Ducommun's
results can be found in the Q2 2023 Earnings Presentation available
at Ducommun.com.
About Ducommun Incorporated
Ducommun Incorporated delivers value-added
innovative manufacturing solutions to customers in the aerospace,
defense and industrial markets. Founded in 1849, the Company
specializes in two core areas - Electronic Systems and Structural
Systems - to produce complex products and components for commercial
aircraft platforms, mission-critical military and space programs,
and sophisticated industrial applications. For more information,
visit Ducommun.com.
Forward Looking Statements
This press release and any attachments include
“forward-looking statements,” within the meaning of Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, including, in
particular, any statements about the Company's expectations
relating to the results and timing of the completion of its
restructuring initiative, and the continued commercial aerospace
recovery in the second half of 2023 and years ahead. The Company
generally uses the words “may,” “will,” “could,” “expect,”
“anticipate,” “believe,” “estimate,” “plan,” “intend,” “continue”
and similar expressions in this press release and any attachments
to identify forward-looking statements. The Company bases these
forward-looking statements on its current views with respect to
future events and financial performance. Actual results could
differ materially from those projected in the forward-looking
statements. These forward-looking statements are subject to risks,
uncertainties and assumptions, including, among other things:
whether the anticipated pre-tax restructuring charges will be
sufficient to address all anticipated restructuring costs,
including related to employee separation, facilities consolidation,
inventory write-down and other asset impairments; whether the
expected cost savings from the restructuring will ultimately be
obtained in the amount and during the period anticipated; whether
the restructuring in the affected areas will be sufficient to build
a more cost efficient, focused, higher margin enterprise with
higher returns for the Company's shareholders; the strength of the
real estate market, the duration of any lease entered into as part
of any sale-leaseback transaction, the amount of commissions owed
to brokers, and applicable tax rates; the impact of the Company’s
debt service obligations and restrictive debt covenants; the
Company’s end-use markets are cyclical; the Company depends upon a
selected base of industries and customers; a significant portion of
the Company’s business depends upon U.S. Government defense
spending; the Company is subject to extensive regulation and audit
by the Defense Contract Audit Agency; contracts with some of the
Company’s customers contain provisions which give the its customers
a variety of rights that are unfavorable to the Company; further
consolidation in the aerospace industry could adversely affect the
Company’s business and financial results; the Company’s ability to
successfully make acquisitions, including its ability to
successfully integrate, operate or realize the projected benefits
of such businesses; the Company relies on its suppliers to meet the
quality and delivery expectations of its customers; the Company
uses estimates when bidding on fixed-price contracts which
estimates could change and result in adverse effects on its
financial results; the impact of existing and future laws and
regulations; the impact of existing and future accounting standards
and tax rules and regulations; environmental liabilities could
adversely affect the Company’s financial results; cyber security
attacks, internal system or service failures may adversely impact
the Company’s business and operations; the ultimate geographic
spread, duration and severity of the coronavirus (COVID-19)
outbreak, and the effectiveness of actions taken, or actions that
may be taken, by governmental authorities to contain the outbreak
or treat its impact, and other risks and uncertainties, including
those detailed from time to time in the Company’s periodic reports
filed with the Securities and Exchange Commission. You should not
put undue reliance on any forward-looking statements. You should
understand that many important factors, including those discussed
herein, could cause the Company’s results to differ materially from
those expressed or suggested in any forward-looking statement.
Except as required by law, the Company does not undertake any
obligation to update or revise these forward-looking statements to
reflect new information or events or circumstances that occur after
the date of this news release, August 3, 2023, or to reflect
the occurrence of unanticipated events or otherwise. Readers are
advised to review the Company’s filings with the Securities and
Exchange Commission (which are available from the SEC’s EDGAR
database at www.sec.gov).
Note Regarding Non-GAAP Financial
Information
This release contains non-GAAP financial
measures, including Adjusted EBITDA (which excludes interest
expense, income tax expense, depreciation, amortization,
stock-based compensation expense, restructuring charges, Guaymas
fire related expenses, other fire related expenses, insurance
recoveries related to loss on operating assets, insurance
recoveries related to business interruption, and inventory purchase
accounting adjustments), non-GAAP operating income and as a
percentage of net revenues, non-GAAP earnings, non-GAAP earnings
per share, and backlog. In addition, certain other prior period
amounts have been reclassified to conform to current year’s
presentation.
The Company believes the presentation of these
non-GAAP measures provide important supplemental information to
management and investors regarding financial and business trends
relating to its financial condition and results of operations. The
Company’s management uses these non-GAAP financial measures along
with the most directly comparable GAAP financial measures in
evaluating the Company’s actual and forecasted operating
performance, capital resources and cash flow. The non-GAAP
financial information presented herein should be considered
supplemental to, and not as a substitute for, or superior to,
financial measures calculated in accordance with GAAP. The Company
discloses different non-GAAP financial measures in order to provide
greater transparency and to help the Company’s investors to more
meaningfully evaluate and compare Ducommun’s results to its
previously reported results. The non-GAAP financial measures that
the Company uses may not be comparable to similarly titled
financial measures used by other companies.
We define backlog as potential revenue and is
based on customer placed purchase orders and long-term agreements
(“LTAs”) with firm fixed price and expected delivery dates of 24
months or less. The majority of the LTAs do not meet the definition
of a contract under ASC 606 and thus, the backlog amount disclosed
herein is greater than the remaining performance obligations
disclosed under ASC 606. Backlog is subject to delivery delays or
program cancellations, which are beyond our control. Backlog is
affected by timing differences in the placement of customer orders
and tends to be concentrated in several programs to a greater
extent than our net revenues. As a result of these factors, trends
in our overall level of backlog may not be indicative of trends in
our future net revenues.
CONTACT:
Suman Mookerji, Senior Vice President, Chief Financial Officer,
Controller and Treasurer, 657.335.3665
[Financial Tables Follow]
DUCOMMUN INCORPORATED AND SUBSIDIARIES |
CONDENSED CONSOLIDATED BALANCE SHEETS |
(Unaudited) |
(Dollars in thousands) |
|
|
July 1,2023 |
|
|
December 31,2022 |
Assets |
|
|
|
|
Current Assets |
|
|
|
|
Cash and cash equivalents |
$ |
22,806 |
|
|
$ |
46,246 |
|
Accounts receivable, net |
|
95,382 |
|
|
|
103,958 |
|
Contract assets |
|
189,836 |
|
|
|
191,290 |
|
Inventories |
|
204,465 |
|
|
|
171,211 |
|
Production cost of contracts |
|
5,536 |
|
|
|
5,693 |
|
Other current assets |
|
11,098 |
|
|
|
8,938 |
|
Total Current Assets |
|
529,123 |
|
|
|
527,336 |
|
Property and Equipment,
Net |
|
111,357 |
|
|
|
106,225 |
|
Operating Lease Right-of-Use
Assets |
|
36,759 |
|
|
|
34,632 |
|
Goodwill |
|
244,575 |
|
|
|
203,407 |
|
Intangibles, Net |
|
174,987 |
|
|
|
127,201 |
|
Other Assets |
|
21,953 |
|
|
|
22,705 |
|
Total
Assets |
$ |
1,118,754 |
|
|
$ |
1,021,506 |
|
Liabilities and
Shareholders’ Equity |
|
|
|
|
Current Liabilities |
|
|
|
|
Accounts payable |
$ |
82,992 |
|
|
$ |
90,143 |
|
Contract liabilities |
|
31,719 |
|
|
|
47,068 |
|
Accrued and other liabilities |
|
38,111 |
|
|
|
48,820 |
|
Operating lease liabilities |
|
8,165 |
|
|
|
7,155 |
|
Current portion of long-term debt |
|
6,250 |
|
|
|
6,250 |
|
Total Current Liabilities |
|
167,237 |
|
|
|
199,436 |
|
Long-Term Debt, Less Current
Portion |
|
271,460 |
|
|
|
240,595 |
|
Non-Current Operating Lease
Liabilities |
|
30,260 |
|
|
|
28,841 |
|
Deferred Income Taxes |
|
12,231 |
|
|
|
13,953 |
|
Other Long-Term
Liabilities |
|
15,423 |
|
|
|
12,721 |
|
Total Liabilities |
|
496,611 |
|
|
|
495,546 |
|
Commitments and
Contingencies |
|
|
|
|
Shareholders’ Equity |
|
|
|
|
Common Stock |
|
146 |
|
|
|
121 |
|
Additional Paid-In
Capital |
|
199,526 |
|
|
|
112,042 |
|
Retained Earnings |
|
413,657 |
|
|
|
406,052 |
|
Accumulated Other
Comprehensive Income |
|
8,814 |
|
|
|
7,745 |
|
Total Shareholders’ Equity |
|
622,143 |
|
|
|
525,960 |
|
Total Liabilities and
Shareholders’ Equity |
$ |
1,118,754 |
|
|
$ |
1,021,506 |
|
|
DUCOMMUN INCORPORATED AND SUBSIDIARIES |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME |
(Unaudited) |
(Dollars in thousands, except per share amounts) |
|
|
Three Months Ended |
|
Six Months Ended |
|
July 1,2023 |
|
July 2,2022 |
|
July 1,2023 |
|
July 2,2022 |
Net Revenues |
$ |
187,320 |
|
|
$ |
174,198 |
|
|
$ |
368,511 |
|
|
$ |
337,679 |
|
Cost of
Sales |
|
147,198 |
|
|
|
139,556 |
|
|
|
291,622 |
|
|
|
270,562 |
|
Gross
Profit |
|
40,122 |
|
|
|
34,642 |
|
|
|
76,889 |
|
|
|
67,117 |
|
Selling,
General and Administrative Expenses |
|
30,348 |
|
|
|
24,185 |
|
|
|
56,573 |
|
|
|
47,537 |
|
Restructuring Charges |
|
4,769 |
|
|
|
2,703 |
|
|
|
8,939 |
|
|
|
2,703 |
|
Operating Income |
|
5,005 |
|
|
|
7,754 |
|
|
|
11,377 |
|
|
|
16,877 |
|
Interest
Expense |
|
(5,735 |
) |
|
|
(2,656 |
) |
|
|
(9,954 |
) |
|
|
(5,058 |
) |
Other
Income |
|
4,059 |
|
|
|
— |
|
|
|
7,945 |
|
|
|
3,000 |
|
Income
Before Taxes |
|
3,329 |
|
|
|
5,098 |
|
|
|
9,368 |
|
|
|
14,819 |
|
Income
Tax Expense |
|
955 |
|
|
|
951 |
|
|
|
1,763 |
|
|
|
2,573 |
|
Net
Income |
$ |
2,374 |
|
|
$ |
4,147 |
|
|
$ |
7,605 |
|
|
$ |
12,246 |
|
Earnings
Per Share |
|
|
|
|
|
|
|
Basic earnings per share |
$ |
0.18 |
|
|
$ |
0.34 |
|
|
$ |
0.59 |
|
|
$ |
1.02 |
|
Diluted earnings per share |
$ |
0.17 |
|
|
$ |
0.34 |
|
|
$ |
0.58 |
|
|
$ |
0.99 |
|
Weighted-Average Number of Common SharesOutstanding |
|
|
|
|
|
|
|
Basic |
|
13,403 |
|
|
|
12,070 |
|
|
|
12,799 |
|
|
|
12,029 |
|
Diluted |
|
13,599 |
|
|
|
12,333 |
|
|
|
13,075 |
|
|
|
12,337 |
|
|
|
|
|
|
|
|
|
Gross
Profit % |
|
21.4 |
% |
|
|
19.9 |
% |
|
|
20.9 |
% |
|
|
19.9 |
% |
SG&A
% |
|
16.2 |
% |
|
|
13.9 |
% |
|
|
15.4 |
% |
|
|
14.1 |
% |
Operating Income % |
|
2.7 |
% |
|
|
4.5 |
% |
|
|
3.1 |
% |
|
|
5.0 |
% |
Net
Income % |
|
1.3 |
% |
|
|
2.4 |
% |
|
|
2.1 |
% |
|
|
3.6 |
% |
Effective Tax Rate |
|
28.7 |
% |
|
|
18.7 |
% |
|
|
18.8 |
% |
|
|
17.4 |
% |
|
DUCOMMUN INCORPORATED AND SUBSIDIARIES |
BUSINESS SEGMENT PERFORMANCE |
(Unaudited) |
(Dollars in thousands) |
|
|
Three Months Ended |
|
Six Months Ended |
|
%Change |
|
July 1,2023 |
|
July 2,2022 |
|
%of Net Revenues2023 |
|
%of Net Revenues2022 |
|
%Change |
|
July 1,2023 |
|
July 2,2022 |
|
%of Net Revenues2023 |
|
%of Net Revenues2022 |
Net
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Electronic Systems |
(2.4) |
% |
|
$ |
107,124 |
|
|
$ |
109,732 |
|
|
57.2 |
% |
|
63.0 |
% |
|
2.7 |
% |
|
$ |
212,750 |
|
|
$ |
207,198 |
|
|
57.7 |
% |
|
61.4 |
% |
Structural Systems |
24.4 |
% |
|
|
80,196 |
|
|
|
64,466 |
|
|
42.8 |
% |
|
37.0 |
% |
|
19.4 |
% |
|
|
155,761 |
|
|
|
130,481 |
|
|
42.3 |
% |
|
38.6 |
% |
Total Net Revenues |
7.5 |
% |
|
$ |
187,320 |
|
|
$ |
174,198 |
|
|
100.0 |
% |
|
100.0 |
% |
|
9.1 |
% |
|
$ |
368,511 |
|
|
$ |
337,679 |
|
|
100.0 |
% |
|
100.0 |
% |
Segment Operating
Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Electronic Systems |
|
|
$ |
9,528 |
|
|
$ |
13,610 |
|
|
8.9 |
% |
|
12.4 |
% |
|
|
|
$ |
19,539 |
|
|
$ |
23,021 |
|
|
9.2 |
% |
|
11.1 |
% |
Structural Systems |
|
|
|
5,385 |
|
|
|
1,265 |
|
|
6.7 |
% |
|
2.0 |
% |
|
|
|
|
10,130 |
|
|
|
6,152 |
|
|
6.5 |
% |
|
4.7 |
% |
|
|
|
|
14,913 |
|
|
|
14,875 |
|
|
|
|
|
|
|
|
|
29,669 |
|
|
|
29,173 |
|
|
|
|
|
Corporate General and Administrative Expenses(1) |
|
|
|
(9,908 |
) |
|
|
(7,121 |
) |
|
(5.3) |
% |
|
(4.1) |
% |
|
|
|
|
(18,292 |
) |
|
|
(12,296 |
) |
|
(5.0) |
% |
|
(3.6) |
% |
Total Operating Income |
|
|
$ |
5,005 |
|
|
$ |
7,754 |
|
|
2.7 |
% |
|
4.5 |
% |
|
|
|
$ |
11,377 |
|
|
$ |
16,877 |
|
|
3.1 |
% |
|
5.0 |
% |
Adjusted
EBITDA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Electronic Systems |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income |
|
|
$ |
9,528 |
|
|
$ |
13,610 |
|
|
|
|
|
|
|
|
$ |
19,539 |
|
|
$ |
23,021 |
|
|
|
|
|
Other Income |
|
|
|
222 |
|
|
|
— |
|
|
|
|
|
|
|
|
|
222 |
|
|
|
— |
|
|
|
|
|
Depreciation and Amortization |
|
|
|
3,561 |
|
|
|
3,484 |
|
|
|
|
|
|
|
|
|
7,059 |
|
|
|
6,990 |
|
|
|
|
|
Restructuring Charges |
|
|
|
2,071 |
|
|
|
1,284 |
|
|
|
|
|
|
|
|
|
3,945 |
|
|
|
1,284 |
|
|
|
|
|
|
|
|
|
15,382 |
|
|
|
18,378 |
|
|
14.4 |
% |
|
16.7 |
% |
|
|
|
|
30,765 |
|
|
|
31,295 |
|
|
14.5 |
% |
|
15.1 |
% |
Structural Systems |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income |
|
|
|
5,385 |
|
|
|
1,265 |
|
|
|
|
|
|
|
|
|
10,130 |
|
|
|
6,152 |
|
|
|
|
|
Depreciation and Amortization |
|
|
|
4,335 |
|
|
|
4,356 |
|
|
|
|
|
|
|
|
|
8,767 |
|
|
|
8,559 |
|
|
|
|
|
Restructuring Charges |
|
|
|
2,612 |
|
|
|
1,947 |
|
|
|
|
|
|
|
|
|
4,908 |
|
|
|
1,947 |
|
|
|
|
|
Guaymas fire related expenses |
|
|
|
1,880 |
|
|
|
998 |
|
|
|
|
|
|
|
|
|
3,348 |
|
|
|
1,955 |
|
|
|
|
|
Other fire related expenses |
|
|
|
477 |
|
|
|
— |
|
|
|
|
|
|
|
|
|
477 |
|
|
|
— |
|
|
|
|
|
Inventory Purchase Accounting Adjustments |
|
|
|
766 |
|
|
|
637 |
|
|
|
|
|
|
|
|
|
766 |
|
|
|
1,274 |
|
|
|
|
|
|
|
|
|
15,455 |
|
|
|
9,203 |
|
|
19.3 |
% |
|
14.3 |
% |
|
|
|
|
28,396 |
|
|
|
19,887 |
|
|
18.2 |
% |
|
15.2 |
% |
Corporate General and Administrative Expenses(1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating loss |
|
|
|
(9,908 |
) |
|
|
(7,121 |
) |
|
|
|
|
|
|
|
|
(18,292 |
) |
|
|
(12,296 |
) |
|
|
|
|
Depreciation and Amortization |
|
|
|
58 |
|
|
|
58 |
|
|
|
|
|
|
|
|
|
117 |
|
|
|
117 |
|
|
|
|
|
Stock-Based Compensation Expense(2) |
|
|
|
5,036 |
|
|
|
3,600 |
|
|
|
|
|
|
|
|
|
8,117 |
|
|
|
5,190 |
|
|
|
|
|
Restructuring Charges |
|
|
|
86 |
|
|
|
— |
|
|
|
|
|
|
|
|
|
86 |
|
|
|
— |
|
|
|
|
|
|
|
|
|
(4,728 |
) |
|
|
(3,463 |
) |
|
|
|
|
|
|
|
|
(9,972 |
) |
|
|
(6,989 |
) |
|
|
|
|
Adjusted EBITDA |
|
|
$ |
26,109 |
|
|
$ |
24,118 |
|
|
13.9 |
% |
|
13.8 |
% |
|
|
|
$ |
49,189 |
|
|
$ |
44,193 |
|
|
13.3 |
% |
|
13.1 |
% |
Capital
Expenditures |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Electronic Systems |
|
|
$ |
1,923 |
|
|
$ |
2,943 |
|
|
|
|
|
|
|
|
$ |
3,774 |
|
|
$ |
4,639 |
|
|
|
|
|
Structural Systems |
|
|
|
4,111 |
|
|
|
2,486 |
|
|
|
|
|
|
|
|
|
7,241 |
|
|
|
5,858 |
|
|
|
|
|
Corporate Administration |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
Total Capital Expenditures |
|
|
$ |
6,034 |
|
|
$ |
5,429 |
|
|
|
|
|
|
|
|
$ |
11,015 |
|
|
$ |
10,497 |
|
|
|
|
|
|
(1) Includes
costs not allocated to either the Electronic Systems or Structural
Systems operating segments. |
(2) The three and
six months ended July 1, 2023 included $0.8 million and $1.2
million, respectively, and both the three and six months ended
July 2, 2022 included $0.5 million of stock-based compensation
expense for awards with both performance and market conditions that
will be settled in cash. |
|
DUCOMMUN INCORPORATED AND SUBSIDIARIES |
GAAP TO NON-GAAP OPERATING INCOME RECONCILIATION |
(Unaudited) |
(Dollars in thousands) |
|
|
Three Months Ended |
|
Six Months Ended |
GAAP To Non-GAAP
Operating Income |
July 1, 2023 |
|
July 2, 2022 |
|
%of Net Revenues2023 |
|
%of Net Revenues2022 |
|
July 1, 2023 |
|
July 2, 2022 |
|
%of Net Revenues2023 |
|
%of Net Revenues2022 |
GAAP Operating income |
$ |
5,005 |
|
|
$ |
7,754 |
|
|
|
|
|
|
|
|
$ |
11,377 |
|
|
$ |
16,877 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Operating income -
Electronic Systems |
$ |
9,528 |
|
|
$ |
13,610 |
|
|
|
|
|
|
|
|
$ |
19,539 |
|
|
$ |
23,021 |
|
|
|
|
|
|
|
Adjustment: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income |
|
222 |
|
|
|
— |
|
|
|
|
|
|
|
|
|
222 |
|
|
|
— |
|
|
|
|
|
|
|
Restructuring charges |
|
2,071 |
|
|
|
1,284 |
|
|
|
|
|
|
|
|
|
3,945 |
|
|
|
1,284 |
|
|
|
|
|
|
|
Amortization of
acquisition-related intangible assets |
|
374 |
|
|
|
373 |
|
|
|
|
|
|
|
|
|
747 |
|
|
|
746 |
|
|
|
|
|
|
|
Adjusted operating income - Electronic Systems |
|
12,195 |
|
|
|
15,267 |
|
|
11.4 |
% |
|
13.9 |
% |
|
|
24,453 |
|
|
|
25,051 |
|
|
11.5 |
% |
|
12.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Operating income -
Structural Systems |
|
5,385 |
|
|
|
1,265 |
|
|
|
|
|
|
|
|
|
10,130 |
|
|
|
6,152 |
|
|
|
|
|
|
|
Adjustment: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring charges |
|
2,612 |
|
|
|
1,947 |
|
|
|
|
|
|
|
|
|
4,908 |
|
|
|
1,947 |
|
|
|
|
|
|
|
Guaymas fire related
expenses |
|
1,880 |
|
|
|
998 |
|
|
|
|
|
|
|
|
|
3,348 |
|
|
|
1,955 |
|
|
|
|
|
|
|
Other fire related
expenses |
|
477 |
|
|
|
— |
|
|
|
|
|
|
|
|
|
477 |
|
|
|
— |
|
|
|
|
|
|
|
Inventory purchase accounting
adjustments |
|
766 |
|
|
|
637 |
|
|
|
|
|
|
|
|
|
766 |
|
|
|
1,274 |
|
|
|
|
|
|
|
Amortization of
acquisition-related intangible assets |
|
1,701 |
|
|
|
1,237 |
|
|
|
|
|
|
|
|
|
2,938 |
|
|
|
2,483 |
|
|
|
|
|
|
|
Adjusted operating income -
Structural Systems |
|
12,821 |
|
|
|
6,084 |
|
|
16.0 |
% |
|
9.4 |
% |
|
|
22,567 |
|
|
|
13,811 |
|
|
14.5 |
% |
|
10.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Operating loss -
Corporate |
|
(9,908 |
) |
|
|
(7,121 |
) |
|
|
|
|
|
|
|
|
(18,292 |
) |
|
|
(12,296 |
) |
|
|
|
|
|
|
Adjustment: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring charges |
|
86 |
|
|
|
— |
|
|
|
|
|
|
|
|
|
86 |
|
|
|
— |
|
|
|
|
|
|
|
Adjusted operating loss -
Corporate |
|
(9,822 |
) |
|
|
(7,121 |
) |
|
|
|
|
|
|
|
|
(18,206 |
) |
|
|
(12,296 |
) |
|
|
|
|
|
|
Total adjustments |
|
10,189 |
|
|
|
6,476 |
|
|
|
|
|
|
|
|
|
17,437 |
|
|
|
9,689 |
|
|
|
|
|
|
|
Adjusted operating income |
$ |
15,194 |
|
|
$ |
14,230 |
|
|
8.1 |
% |
|
8.2 |
% |
|
$ |
28,814 |
|
|
$ |
26,566 |
|
|
7.8 |
% |
|
7.9 |
% |
|
DUCOMMUN INCORPORATED AND SUBSIDIARIES |
GAAP TO NON-GAAP EARNINGS AND EARNINGS PER SHARE
RECONCILIATION |
(Unaudited) |
(Dollars in thousands, except per share amounts) |
|
|
Three Months Ended |
|
|
Six Months Ended |
GAAP To Non-GAAP
Earnings |
July 1,2023 |
|
July 2,2022 |
|
|
July 1,2023 |
|
July 2,2022 |
GAAP Net income |
$ |
2,374 |
|
|
$ |
4,147 |
|
|
$ |
7,605 |
|
|
$ |
12,246 |
|
Adjustments: |
|
|
|
|
|
|
|
|
Restructuring charges (1) |
|
3,815 |
|
|
|
2,585 |
|
|
|
7,151 |
|
|
|
2,585 |
|
Guaymas fire related expenses
(1) |
|
1,504 |
|
|
|
798 |
|
|
|
2,678 |
|
|
|
1,564 |
|
Other fire related expenses
(1) |
|
382 |
|
|
|
— |
|
|
|
382 |
|
|
|
— |
|
Insurance recoveries related
to loss on operating assets (1) |
|
(1,341 |
) |
|
|
— |
|
|
|
(4,450 |
) |
|
|
— |
|
Insurance recoveries related
to business interruption (1) |
|
(1,728 |
) |
|
|
— |
|
|
|
(1,728 |
) |
|
|
(2,400 |
) |
Inventory purchase accounting
adjustments (1) |
|
613 |
|
|
|
510 |
|
|
|
613 |
|
|
|
1,019 |
|
Amortization of
acquisition-related intangible assets (1) |
|
1,660 |
|
|
|
1,288 |
|
|
|
2,948 |
|
|
|
2,583 |
|
Total adjustments |
|
4,905 |
|
|
|
5,181 |
|
|
|
7,594 |
|
|
|
5,351 |
|
Adjusted net income |
$ |
7,279 |
|
|
$ |
9,328 |
|
|
$ |
15,199 |
|
|
$ |
17,597 |
|
|
|
Three Months Ended |
|
Six Months Ended |
GAAP Earnings Per
Share To Non-GAAP Earnings Per Share |
July 1,2023 |
|
July 2,2022 |
|
July 1,2023 |
|
July 2,2022 |
GAAP Diluted earnings per share (“EPS”) |
$ |
0.17 |
|
|
$ |
0.34 |
|
|
$ |
0.58 |
|
|
$ |
0.99 |
|
Adjustments: |
|
|
|
|
|
|
|
Restructuring charges (1) |
|
0.28 |
|
|
|
0.21 |
|
|
|
0.55 |
|
|
|
0.21 |
|
Guaymas fire related expenses
(1) |
|
0.11 |
|
|
|
0.07 |
|
|
|
0.20 |
|
|
|
0.13 |
|
Other fire related expenses
(1) |
|
0.03 |
|
|
|
— |
|
|
|
0.03 |
|
|
|
— |
|
Insurance recoveries related
to loss on operating assets (1) |
|
(0.10 |
) |
|
|
— |
|
|
|
(0.34 |
) |
|
|
— |
|
Insurance recoveries related
to business interruption (1) |
|
(0.13 |
) |
|
|
— |
|
|
|
(0.13 |
) |
|
|
(0.19 |
) |
Inventory purchase accounting
adjustments (1) |
|
0.05 |
|
|
|
0.04 |
|
|
|
0.05 |
|
|
|
0.08 |
|
Amortization of
acquisition-related intangible assets (1) |
|
0.13 |
|
|
|
0.10 |
|
|
|
0.22 |
|
|
|
0.21 |
|
Total adjustments |
|
0.37 |
|
|
|
0.42 |
|
|
|
0.58 |
|
|
|
0.44 |
|
Adjusted diluted EPS |
$ |
0.54 |
|
|
$ |
0.76 |
|
|
$ |
1.16 |
|
|
$ |
1.43 |
|
|
|
|
|
|
|
|
|
Shares used for adjusted
diluted EPS |
|
13,599 |
|
|
|
12,333 |
|
|
|
13,075 |
|
|
|
12,337 |
|
|
(1) Includes
effective tax rate of 20.0% for both 2023 and 2022
adjustments. |
|
DUCOMMUN INCORPORATED AND SUBSIDIARIES |
NON-GAAP BACKLOG* BY REPORTING SEGMENT |
(Unaudited) |
(Dollars in thousands) |
|
|
July 1,2023 |
|
December 31,2022 |
Consolidated Ducommun |
|
|
|
Military and space |
$ |
494,367 |
|
|
$ |
457,354 |
|
Commercial aerospace |
|
464,710 |
|
|
|
450,092 |
|
Industrial |
|
51,095 |
|
|
|
53,374 |
|
Total |
$ |
1,010,172 |
|
|
$ |
960,820 |
|
Electronic Systems |
|
|
|
Military
and space |
$ |
369,500 |
|
|
$ |
361,582 |
|
Commercial aerospace |
|
100,397 |
|
|
|
125,590 |
|
Industrial |
|
51,095 |
|
|
|
53,374 |
|
Total |
$ |
520,992 |
|
|
$ |
540,546 |
|
Structural Systems |
|
|
|
Military
and space |
$ |
124,867 |
|
|
$ |
95,772 |
|
Commercial aerospace |
|
364,313 |
|
|
|
324,502 |
|
Total |
$ |
489,180 |
|
|
$ |
420,274 |
|
|
* The Company defines backlog as potential
revenue and is based on customer placed purchase orders and
long-term agreements (“LTAs”) with firm fixed price and expected
delivery dates of 24 months or less. Backlog as of July 1,
2023 was $1,010.2 million compared to $960.8 million as of
December 31, 2022. Under ASC 606, the Company defines
performance obligations as customer placed purchase orders with
firm fixed price and firm delivery dates. The remaining performance
obligations disclosed under ASC 606 as of July 1, 2023 were
$916.7 million compared to $853.0 million as of December 31,
2022.
Grafico Azioni Ducommun (NYSE:DCO)
Storico
Da Apr 2024 a Mag 2024
Grafico Azioni Ducommun (NYSE:DCO)
Storico
Da Mag 2023 a Mag 2024