Ducommun Incorporated (NYSE:DCO) (“Ducommun” or the “Company”)
today reported results for its second quarter ended June 27,
2020.
Second Quarter 2020 Recap
- Revenue was $147.3 million
- Net income of $5.1 million, or $0.43 per diluted share
- Adjusted net income of $5.6 million, or $0.48 per diluted
share
- Gross margin increased 110 basis points year-over-year to
22.2%
- Adjusted EBITDA was $20.3 million
“This past quarter proved to be one of the most
challenging in our history, but Ducommun's performance highlights
both the strength and diversity of our business as well as the many
measures taken to streamline and optimize our operations since I
joined the Company in 2017,” said Stephen G. Oswald, chairman,
president and chief executive officer. “Due to the ongoing COVID-19
pandemic, commercial aerospace demand was negatively impacted but
our defense related revenue rose roughly 23% year-over-year,
leveraging an array of integral military programs and missile
systems. In addition, our military and space backlog* increased to
over $500 million, bolstering the outlook across this key part of
the business.
“At the same time, despite overall lower
revenue, gross margins increased year-over-year due to an improved
product mix in defense, effective cost controls, value added
pricing and the acquisition of Nobles Worldwide last fall, a key
addition to our engineered products portfolio. The team remains
focused on rigorous safety protocols, serving our customers,
effectively managing working capital, working with the supply base,
and reducing costs wherever and whenever possible. We are also
confident that Ducommun's strong product portfolio, intellectual
property, dedicated staff, and efficient operations will provide
positive momentum in the second half of the year and position us
for a solid rebound in 2021.”
Second Quarter Results
Net revenue for the second quarter of 2020 was
$147.3 million compared to $180.5 million for the second quarter of
2019. The year-over-year decrease of 18.4% was primarily due to the
following:
- $51.6 million lower revenue in the Company’s commercial
aerospace end-use markets due to lower build rates on large
aircraft platforms; partially offset by
- $17.4 million higher revenue in the Company’s military and
space end-use markets due to additional content and higher build
rates on other military and space platforms, and higher build rates
on military fixed-wing aircraft platforms and various missile
platforms.
Net income for the second quarter of 2020 was
$5.1 million, or $0.43 per diluted share, compared to $7.8 million,
or $0.66 per diluted share, for the second quarter of 2019. This
reflects a $5.4 million decrease in gross profit due to lower
revenue, partially offset by lower selling, general and
administrative (“SG&A”) expenses of $2.5 million.
Gross profit for the second quarter of 2020 was
$32.7 million, or 22.2% of revenue, compared to gross profit of
$38.1 million, or 21.1% of revenue, for the second quarter of 2019.
The increase in gross profit margin as a percentage of net revenue
year-over-year was due to lower compensation and benefit costs and
favorable product mix, partially offset by unfavorable
manufacturing volume.
Operating income for the second quarter of 2020
was $10.0 million, or 6.8% of revenue, compared to $13.6 million,
or 7.5% of revenue, in the comparable period last year. The
year-over-year decrease of $3.6 million was due to lower revenue,
partially offset by lower SG&A expenses.
Interest expense for the second quarter of 2020
was $3.7 million compared to $4.4 million in the comparable period
of 2019. The year-over-year decrease was due to lower interest
rates, partially offset by a higher outstanding balance on the
Company’s credit facilities driven by the acquisition of Nobles
Worldwide, Inc. (“Nobles”) in October 2019, and higher net draw
downs on the Company’s revolving credit facility, including $50.0
million during the first quarter of 2020, which remained as cash on
hand at the end of the second quarter of 2020.
Adjusted EBITDA for the second quarter of 2020
was $20.3 million, or 13.8% of revenue, compared to $22.4 million,
or 12.4% of revenue, for the comparable period in 2019.
During the second quarter of 2020, the net cash
provided by operations was $8.6 million compared to $9.7 million
during the second quarter of 2019. The change year-over-year was
due to higher inventories and lower accounts payable, partially
offset by 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 June 27,
2020 was $830.7 million compared to $910.2 million as of
December 31, 2019. Under ASC 606, the Company defines
remaining 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 June 27,
2020 were $732.2 million compared to $745.3 million as of
December 31, 2019.
Business Segment
Information
Electronic Systems
Electronic Systems segment net revenue for the
quarter ended June 27, 2020 was $92.0 million, compared to
$89.3 million for the second quarter of 2019. The year-over-year
increase was primarily due to the following:
- $7.7 million higher revenue within the Company’s military and
space end-use markets due to higher build rates on military
fixed-wing aircraft platforms, various missile platforms, and other
military and space platforms; partially offset by
- $6.0 million lower revenue within the Company’s commercial
aerospace end-use markets due to lower build rates on other
commercial aerospace platforms.
Electronic Systems segment operating income for
the quarter ended June 27, 2020 was $10.4 million, or 11.4% of
revenue, compared to $9.9 million, or 11.1% of revenue, for the
comparable quarter in 2019. The year-over-year increase of $0.5
million was due to lower compensation and benefit costs.
Structural Systems
Structural Systems segment net revenue for the
quarter ended June 27, 2020 was $55.4 million, compared to
$91.2 million for the second quarter of 2019. The year-over-year
decrease was due to the following:
- $45.5 million lower revenue within the Company’s commercial
aerospace end-use markets due to lower build rates on large
aircraft platforms; partially offset by
- $9.7 million higher revenue within the Company’s military and
space end-use markets due to additional content and higher build
rates on other military and space platforms, and higher build rates
on military rotary-wing aircraft platforms and military fixed-wing
aircraft platforms.
Structural Systems segment operating income for
the quarter ended June 27, 2020 was $6.2 million, or 11.2% of
revenue, compared to $11.8 million, or 12.9% of revenue, for the
comparable quarter in 2019. The year-over-year decrease of $5.6
million was due to unfavorable manufacturing volume, partially
offset by favorable product mix.
Corporate General and Administrative
(“CG&A”) Expenses
CG&A expenses for the second quarter of 2020
were $6.6 million, or 4.5% of total Company revenue, compared to
$8.1 million, or 4.5% of total Company revenue, for the comparable
quarter in the prior year. The decrease in CG&A expenses was
due to a one-time severance charges of $1.7 million in the prior
year.
Conference Call
A teleconference hosted by Stephen G. Oswald,
the Company’s chairman, president, and chief executive officer, and
Christopher D. Wampler, the Company’s vice president, interim chief
financial officer and treasurer, and controller and chief
accounting officer will be held today, July 30, 2020 at 2:00
p.m. PT (5:00 p.m. ET) to review these financial results. To
participate in the teleconference, please call 844-239-5278
(international 574-990-1017) approximately 10 minutes prior to the
conference time. The participant passcode is 9433049. Mr. Oswald
and Mr. Wampler will be speaking on behalf of the Company and
anticipate the call (including Q&A) to last approximately 45
minutes.
This call is being webcast and can be accessed
directly at the Ducommun website at Ducommun.com. Conference call
replay will be available after that time at the same link or by
dialing 855-859-2056, passcode 9433049.
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, earnings guidance and any statements about the
Company’s plans, strategies and prospects. 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 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, July 30, 2020, 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, and restructuring charges).
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. Backlog
in industrial markets tends to be of a shorter duration and is
generally fulfilled within a three month period. As a result of
these factors, trends in our overall level of backlog may not be
indicative of trends in our future net revenues.
CONTACTS:
Christopher D. Wampler, Vice
President, Interim Chief Financial Officer and Treasurer, and
Controller and Chief Accounting Officer, 657.335.3665 |
Chris Witty, Investor Relations,
646.438.9385, cwitty@darrowir.com |
DUCOMMUN INCORPORATED AND SUBSIDIARIESCONDENSED
CONSOLIDATED BALANCE SHEETS(Unaudited)(Dollars in thousands)
|
June 27, 2020 |
|
December 31, 2019 |
Assets |
|
|
|
Current Assets |
|
|
|
Cash and cash equivalents |
$ |
70,828 |
|
|
$ |
39,584 |
|
Accounts receivable, net |
67,518 |
|
|
67,133 |
|
Contract assets |
122,877 |
|
|
106,670 |
|
Inventories |
128,609 |
|
|
112,482 |
|
Production cost of contracts |
7,351 |
|
|
9,402 |
|
Other current assets |
4,548 |
|
|
5,497 |
|
Total Current Assets |
401,731 |
|
|
340,768 |
|
Property and equipment, Net |
113,765 |
|
|
115,216 |
|
Operating lease right-of-use
assets |
17,789 |
|
|
19,105 |
|
Goodwill |
170,907 |
|
|
170,917 |
|
Intangibles, net |
131,224 |
|
|
138,362 |
|
Non-current deferred income
taxes |
59 |
|
|
55 |
|
Other assets |
6,162 |
|
|
6,006 |
|
Total
Assets |
$ |
841,637 |
|
|
$ |
790,429 |
|
Liabilities and
Shareholders’ Equity |
|
|
|
Current Liabilities |
|
|
|
Accounts payable |
$ |
69,068 |
|
|
$ |
82,597 |
|
Contract liabilities |
27,082 |
|
|
14,517 |
|
Accrued and other liabilities |
29,122 |
|
|
37,620 |
|
Operating lease liabilities |
3,094 |
|
|
2,956 |
|
Current portion of long-term debt |
7,000 |
|
|
7,000 |
|
Total Current Liabilities |
135,366 |
|
|
144,690 |
|
Long-term debt, less current
portion |
341,975 |
|
|
300,887 |
|
Non-current operating lease
liabilities |
16,155 |
|
|
17,565 |
|
Non-current deferred income
taxes |
18,755 |
|
|
16,766 |
|
Other long-term liabilities |
19,779 |
|
|
17,721 |
|
Total Liabilities |
532,030 |
|
|
497,629 |
|
Commitments and
contingencies |
|
|
|
Shareholders’ Equity |
|
|
|
Common stock |
117 |
|
|
116 |
|
Additional paid-in capital |
91,645 |
|
|
88,399 |
|
Retained earnings |
225,573 |
|
|
212,553 |
|
Accumulated other comprehensive loss |
(7,728 |
) |
|
(8,268 |
) |
Total Shareholders’ Equity |
309,607 |
|
|
292,800 |
|
Total Liabilities and
Shareholders’ Equity |
$ |
841,637 |
|
|
$ |
790,429 |
|
|
DUCOMMUN INCORPORATED AND SUBSIDIARIESCONDENSED
CONSOLIDATED STATEMENTS OF INCOME(Unaudited)(Dollars in thousands,
except per share amounts)
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
|
June 27, 2020 |
|
June 29, 2019 |
|
June 27, 2020 |
|
June 29, 2019 |
Net Revenues |
$ |
147,309 |
|
|
$ |
180,495 |
|
|
$ |
320,784 |
|
|
$ |
353,061 |
|
Cost of Sales |
114,641 |
|
|
142,430 |
|
|
251,312 |
|
|
279,302 |
|
Gross Profit |
32,668 |
|
|
38,065 |
|
|
69,472 |
|
|
73,759 |
|
Selling, General and
Administrative Expenses |
21,982 |
|
|
24,461 |
|
|
45,160 |
|
|
47,307 |
|
Restructuring Charges |
661 |
|
|
— |
|
|
661 |
|
|
— |
|
Operating Income |
10,025 |
|
|
13,604 |
|
|
23,651 |
|
|
26,452 |
|
Interest Expense |
(3,721 |
) |
|
(4,426 |
) |
|
(7,967 |
) |
|
(8,777 |
) |
Income Before Taxes |
6,304 |
|
|
9,178 |
|
|
15,684 |
|
|
17,675 |
|
Income Tax Expense |
1,214 |
|
|
1,363 |
|
|
2,664 |
|
|
2,388 |
|
Net Income |
$ |
5,090 |
|
|
$ |
7,815 |
|
|
$ |
13,020 |
|
|
$ |
15,287 |
|
Earnings Per Share |
|
|
|
|
|
|
|
Basic earnings per share |
$ |
0.44 |
|
|
$ |
0.68 |
|
|
$ |
1.12 |
|
|
$ |
1.33 |
|
Diluted earnings per share |
$ |
0.43 |
|
|
$ |
0.66 |
|
|
$ |
1.10 |
|
|
$ |
1.30 |
|
Weighted-Average Number of Common
Shares Outstanding |
|
|
|
|
|
|
|
Basic |
11,665 |
|
|
11,513 |
|
|
11,638 |
|
|
11,475 |
|
Diluted |
11,828 |
|
|
11,758 |
|
|
11,845 |
|
|
11,754 |
|
|
|
|
|
|
|
|
|
Gross Profit % |
22.2 |
% |
|
21.1 |
% |
|
21.7 |
% |
|
20.9 |
% |
SG&A % |
15.0 |
% |
|
13.6 |
% |
|
14.1 |
% |
|
13.4 |
% |
Operating Income % |
6.8 |
% |
|
7.5 |
% |
|
7.4 |
% |
|
7.5 |
% |
Net Income % |
3.5 |
% |
|
4.3 |
% |
|
4.1 |
% |
|
4.3 |
% |
Effective Tax Rate |
19.3 |
% |
|
14.9 |
% |
|
17.0 |
% |
|
13.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
DUCOMMUN INCORPORATED AND SUBSIDIARIESBUSINESS
SEGMENT PERFORMANCE(Unaudited)(Dollars in thousands)
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
|
% Change |
|
June 27, 2020 |
|
June 29, 2019 |
|
% of Net Revenues 2020 |
|
% of Net Revenues 2019 |
|
% Change |
|
June 27, 2020 |
|
June 29, 2019 |
|
% of Net Revenues 2020 |
|
% of Net Revenues 2019 |
Net
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Electronic Systems |
3.0 |
% |
|
$ |
91,950 |
|
|
$ |
89,260 |
|
|
62.4 |
% |
|
49.5 |
% |
|
9.6 |
% |
|
$ |
190,070 |
|
|
$ |
173,457 |
|
|
59.3 |
% |
|
49.1 |
% |
Structural Systems |
(39.3 |
)% |
|
55,359 |
|
|
91,235 |
|
|
37.6 |
% |
|
50.5 |
% |
|
(27.2 |
)% |
|
130,714 |
|
|
179,604 |
|
|
40.7 |
% |
|
50.9 |
% |
Total Net Revenues |
(18.4 |
)% |
|
$ |
147,309 |
|
|
$ |
180,495 |
|
|
100.0 |
% |
|
100.0 |
% |
|
(9.1 |
)% |
|
$ |
320,784 |
|
|
$ |
353,061 |
|
|
100.0 |
% |
|
100.0 |
% |
Segment Operating
Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Electronic Systems |
|
|
$ |
10,438 |
|
|
$ |
9,912 |
|
|
11.4 |
% |
|
11.1 |
% |
|
|
|
$ |
25,560 |
|
|
$ |
19,093 |
|
|
13.4 |
% |
|
11.0 |
% |
Structural Systems |
|
|
6,214 |
|
|
11,773 |
|
|
11.2 |
% |
|
12.9 |
% |
|
|
|
11,604 |
|
|
22,322 |
|
|
8.9 |
% |
|
12.4 |
% |
|
|
|
16,652 |
|
|
21,685 |
|
|
|
|
|
|
|
|
37,164 |
|
|
41,415 |
|
|
|
|
|
Corporate General and Administrative Expenses(1) |
|
|
(6,627 |
) |
|
(8,081 |
) |
|
(4.5 |
)% |
|
(4.5 |
)% |
|
|
|
(13,513 |
) |
|
(14,963 |
) |
|
(4.2 |
)% |
|
(4.2 |
)% |
Total Operating Income |
|
|
$ |
10,025 |
|
|
$ |
13,604 |
|
|
6.8 |
% |
|
7.5 |
% |
|
|
|
$ |
23,651 |
|
|
$ |
26,452 |
|
|
7.4 |
% |
|
7.5 |
% |
Adjusted
EBITDA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Electronic Systems |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income |
|
|
$ |
10,438 |
|
|
$ |
9,912 |
|
|
|
|
|
|
|
|
$ |
25,560 |
|
|
$ |
19,093 |
|
|
|
|
|
Depreciation and Amortization |
|
|
3,524 |
|
|
3,531 |
|
|
|
|
|
|
|
|
7,099 |
|
|
7,033 |
|
|
|
|
|
Restructuring Charges |
|
|
28 |
|
|
— |
|
|
|
|
|
|
|
|
28 |
|
|
— |
|
|
|
|
|
|
|
|
13,990 |
|
|
13,443 |
|
|
15.2 |
% |
|
15.1 |
% |
|
|
|
32,687 |
|
|
26,126 |
|
|
17.2 |
% |
|
15.1 |
% |
Structural Systems |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income |
|
|
6,214 |
|
|
11,773 |
|
|
|
|
|
|
|
|
11,604 |
|
|
22,322 |
|
|
|
|
|
Depreciation and Amortization |
|
|
3,739 |
|
|
3,400 |
|
|
|
|
|
|
|
|
7,428 |
|
|
6,400 |
|
|
|
|
|
Restructuring Charges |
|
|
633 |
|
|
— |
|
|
|
|
|
|
|
|
633 |
|
|
— |
|
|
|
|
|
|
|
|
10,586 |
|
|
15,173 |
|
|
19.1 |
% |
|
16.6 |
% |
|
|
|
19,665 |
|
|
28,722 |
|
|
15.0 |
% |
|
16.0 |
% |
Corporate General and Administrative Expenses(1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating loss |
|
|
(6,627 |
) |
|
(8,081 |
) |
|
|
|
|
|
|
|
(13,513 |
) |
|
(14,963 |
) |
|
|
|
|
Depreciation and Amortization |
|
|
64 |
|
|
73 |
|
|
|
|
|
|
|
|
136 |
|
|
326 |
|
|
|
|
|
Stock-Based Compensation Expense |
|
|
2,250 |
|
|
1,807 |
|
|
|
|
|
|
|
|
4,529 |
|
|
3,271 |
|
|
|
|
|
|
|
|
(4,313 |
) |
|
(6,201 |
) |
|
|
|
|
|
|
|
(8,848 |
) |
|
(11,366 |
) |
|
|
|
|
Adjusted EBITDA |
|
|
$ |
20,263 |
|
|
$ |
22,415 |
|
|
13.8 |
% |
|
12.4 |
% |
|
|
|
$ |
43,504 |
|
|
$ |
43,482 |
|
|
13.6 |
% |
|
12.3 |
% |
Capital
Expenditures |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Electronic Systems |
|
|
$ |
2,117 |
|
|
$ |
2,216 |
|
|
|
|
|
|
|
|
$ |
2,932 |
|
|
$ |
3,052 |
|
|
|
|
|
Structural Systems |
|
|
467 |
|
|
3,672 |
|
|
|
|
|
|
|
|
2,604 |
|
|
7,361 |
|
|
|
|
|
Corporate Administration |
|
|
— |
|
|
— |
|
|
|
|
|
|
|
|
— |
|
|
— |
|
|
|
|
|
Total Capital Expenditures |
|
|
$ |
2,584 |
|
|
$ |
5,888 |
|
|
|
|
|
|
|
|
$ |
5,536 |
|
|
$ |
10,413 |
|
|
|
|
|
|
(1) Includes costs not allocated to either the
Electronic Systems or Structural Systems operating segments.
DUCOMMUN INCORPORATED AND SUBSIDIARIESGAAP TO
NON-GAAP OPERATING INCOME RECONCILIATION(Unaudited)(Dollars in
thousands)
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
GAAP To Non-GAAP
Operating Income |
June 27, 2020 |
|
June 29, 2019 |
|
% of Net Revenues 2020 |
|
% of Net Revenues 2019 |
|
June 27, 2020 |
|
June 29, 2019 |
|
% of Net Revenues 2020 |
|
% of Net Revenues 2019 |
GAAP Operating income |
$ |
10,025 |
|
|
$ |
13,604 |
|
|
|
|
|
|
$ |
23,651 |
|
|
$ |
26,452 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Operating income -
Electronic Systems |
$ |
10,438 |
|
|
$ |
9,912 |
|
|
|
|
|
|
$ |
25,560 |
|
|
$ |
19,093 |
|
|
|
|
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring charges |
28 |
|
|
— |
|
|
|
|
|
|
28 |
|
|
— |
|
|
|
|
|
Adjusted operating income -
Electronic Systems |
10,466 |
|
|
9,912 |
|
|
11.4 |
% |
|
11.1 |
% |
|
25,588 |
|
|
19,093 |
|
|
13.5 |
% |
|
11.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Operating income -
Structural Systems |
6,214 |
|
|
11,773 |
|
|
|
|
|
|
11,604 |
|
|
22,322 |
|
|
|
|
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring charges |
633 |
|
|
— |
|
|
|
|
|
|
633 |
|
|
— |
|
|
|
|
|
Adjusted operating income -
Structural Systems |
6,847 |
|
|
11,773 |
|
|
12.4 |
% |
|
12.9 |
% |
|
12,237 |
|
|
22,322 |
|
|
9.4 |
% |
|
12.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Operating loss -
Corporate |
(6,627 |
) |
|
(8,081 |
) |
|
|
|
|
|
(13,513 |
) |
|
(14,963 |
) |
|
|
|
|
Adjustment: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring charges |
— |
|
|
— |
|
|
|
|
|
|
— |
|
|
— |
|
|
|
|
|
Adjusted operating loss -
Corporate |
(6,627 |
) |
|
(8,081 |
) |
|
|
|
|
|
(13,513 |
) |
|
(14,963 |
) |
|
|
|
|
Total adjustments |
661 |
|
|
— |
|
|
|
|
|
|
661 |
|
|
— |
|
|
|
|
|
Adjusted operating income |
$ |
10,686 |
|
|
$ |
13,604 |
|
|
7.3 |
% |
|
7.5 |
% |
|
$ |
24,312 |
|
|
$ |
26,452 |
|
|
7.6 |
% |
|
7.5 |
% |
|
DUCOMMUN INCORPORATED AND SUBSIDIARIESGAAP 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 |
June 27, 2020 |
|
June 29, 2019 |
|
June 27, 2020 |
|
June 29, 2019 |
GAAP Net income |
$ |
5,090 |
|
|
$ |
7,815 |
|
|
$ |
13,020 |
|
|
$ |
15,287 |
|
Adjustments: |
|
|
|
|
|
|
|
Restructuring charges (1) |
535 |
|
|
— |
|
|
535 |
|
|
— |
|
Total adjustments |
535 |
|
|
— |
|
|
535 |
|
|
— |
|
Adjusted net income |
$ |
5,625 |
|
|
$ |
7,815 |
|
|
$ |
13,555 |
|
|
$ |
15,287 |
|
|
Three Months Ended |
|
Six Months Ended |
GAAP Earnings Per
Share To Non-GAAP Earnings Per Share |
June 27, 2020 |
|
June 29, 2019 |
|
June 27, 2020 |
|
June 29, 2019 |
GAAP Diluted earnings per share (“EPS”) |
$ |
0.43 |
|
|
$ |
0.66 |
|
|
$ |
1.10 |
|
|
$ |
1.30 |
|
Adjustments: |
|
|
|
|
|
|
|
Restructuring charges (1) |
0.05 |
|
|
— |
|
|
0.05 |
|
|
— |
|
Total adjustments |
0.05 |
|
|
— |
|
|
0.05 |
|
|
— |
|
Adjusted diluted EPS |
$ |
0.48 |
|
|
$ |
0.66 |
|
|
$ |
1.15 |
|
|
$ |
1.30 |
|
|
|
|
|
|
|
|
|
Shares used for adjusted
diluted EPS |
11,828 |
|
|
11,758 |
|
|
11,845 |
|
|
11,754 |
|
(1) Includes effective tax rate of 19.0% for 2020
adjustments.
DUCOMMUN INCORPORATED AND SUBSIDIARIESNON-GAAP
BACKLOG* BY REPORTING SEGMENT(Unaudited)(Dollars in thousands)
|
|
|
(In thousands) |
|
June 27, 2020 |
|
December 31, 2019 |
Consolidated
Ducommun |
|
|
|
Military and space |
$ |
505,189 |
|
|
$ |
451,293 |
|
Commercial aerospace |
306,874 |
|
|
430,642 |
|
Industrial |
18,597 |
|
|
28,286 |
|
Total |
$ |
830,660 |
|
|
$ |
910,221 |
|
Electronic
Systems |
|
|
|
Military and space |
$ |
356,046 |
|
|
$ |
311,027 |
|
Commercial aerospace |
68,336 |
|
|
75,719 |
|
Industrial |
18,597 |
|
|
28,286 |
|
Total |
$ |
442,979 |
|
|
$ |
415,032 |
|
Structural
Systems |
|
|
|
Military and space |
$ |
149,143 |
|
|
$ |
140,266 |
|
Commercial aerospace |
238,538 |
|
|
354,923 |
|
Total |
$ |
387,681 |
|
|
$ |
495,189 |
|
|
* 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 as of
June 27, 2020 was $830.7 million compared to $910.2 million as
of December 31, 2019. Under ASC 606, the Company defines
remaining performance obligations as customer placed purchase
orders with firm fixed price and firm delivery dates. The remaining
performance obligations disclosed under ASC 606 were $732.2
million.
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