x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
|
95-0693330
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
|
|
|
23301 Wilmington Avenue, Carson, California
|
|
90745-6209
|
(Address of principal executive offices)
|
|
(Zip code)
|
Large accelerated filer
|
|
¨
|
Accelerated filer
|
|
x
|
|
|
|
|
||
Non-accelerated filer
|
|
¨
|
Smaller reporting company
|
|
¨
|
|
|
Three Months Ended
|
||||||
|
|
March 29,
2014 |
|
March 30,
2013 |
||||
Net Sales
|
|
$
|
179,753
|
|
|
$
|
175,915
|
|
Cost of Sales
|
|
144,683
|
|
|
143,062
|
|
||
Gross Profit
|
|
35,070
|
|
|
32,853
|
|
||
Selling, General and Administrative Expenses
|
|
21,087
|
|
|
22,551
|
|
||
Operating Income
|
|
13,983
|
|
|
10,302
|
|
||
Interest Expense
|
|
7,125
|
|
|
7,823
|
|
||
Income Before Taxes
|
|
6,858
|
|
|
2,479
|
|
||
Income Tax Expense (Benefit)
|
|
2,229
|
|
|
(1,228
|
)
|
||
Net Income
|
|
$
|
4,629
|
|
|
$
|
3,707
|
|
Earnings Per Share
|
|
|
|
|
||||
Basic earnings per share
|
|
$
|
0.43
|
|
|
$
|
0.35
|
|
Diluted earnings per share
|
|
$
|
0.42
|
|
|
$
|
0.35
|
|
Weighted-Average Number of Common Shares Outstanding
|
|
|
|
|
||||
Basic
|
|
10,844
|
|
|
10,600
|
|
||
Diluted
|
|
11,107
|
|
|
10,670
|
|
|
|
Three Months Ended
|
||||||
|
|
March 29,
2014 |
|
March 30,
2013 |
||||
Net Income
|
|
$
|
4,629
|
|
|
$
|
3,707
|
|
Other Comprehensive Loss
|
|
|
|
|
||||
Amortization of actuarial loss and prior service costs, net of tax benefit of $36 and $102 for the three months ended March 29, 2014 and March 30, 2013, respectively
|
|
(69
|
)
|
|
(172
|
)
|
||
Other Comprehensive Loss
|
|
(69
|
)
|
|
(172
|
)
|
||
Comprehensive Income
|
|
$
|
4,560
|
|
|
$
|
3,535
|
|
|
|
March 29,
|
|
December 31,
|
||||
|
|
2014
|
|
2013
|
||||
Assets
|
|
|
|
|
||||
Current Assets
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
29,415
|
|
|
$
|
48,814
|
|
Accounts receivable, net of allowance for doubtful accounts of $427 and $489 at March 29, 2014 and December 31, 2013, respectively
|
|
100,570
|
|
|
91,909
|
|
||
Inventories
|
|
148,895
|
|
|
140,507
|
|
||
Production cost of contracts
|
|
10,479
|
|
|
11,599
|
|
||
Deferred income taxes
|
|
13,836
|
|
|
10,850
|
|
||
Other current assets
|
|
21,664
|
|
|
27,085
|
|
||
Total Current Assets
|
|
324,859
|
|
|
330,764
|
|
||
Property and Equipment, Net
|
|
94,168
|
|
|
96,090
|
|
||
Goodwill
|
|
161,940
|
|
|
161,940
|
|
||
Intangibles, Net
|
|
162,875
|
|
|
165,465
|
|
||
Other Assets
|
|
9,320
|
|
|
9,940
|
|
||
Total Assets
|
|
$
|
753,162
|
|
|
$
|
764,199
|
|
Liabilities and Shareholders’ Equity
|
|
|
|
|
||||
Current Liabilities
|
|
|
|
|
||||
Current portion of long-term debt
|
|
$
|
25
|
|
|
$
|
25
|
|
Accounts payable
|
|
53,973
|
|
|
58,111
|
|
||
Accrued liabilities
|
|
39,628
|
|
|
45,453
|
|
||
Total Current Liabilities
|
|
93,626
|
|
|
103,589
|
|
||
Long-Term Debt, Less Current Portion
|
|
325,171
|
|
|
332,677
|
|
||
Deferred Income Taxes
|
|
70,556
|
|
|
68,489
|
|
||
Other Long-Term Liabilities
|
|
18,922
|
|
|
19,750
|
|
||
Total Liabilities
|
|
508,275
|
|
|
524,505
|
|
||
Commitments and Contingencies (Notes 8, 10)
|
|
|
|
|
||||
Shareholders’ Equity
|
|
|
|
|
||||
Common stock - $0.01 par value; 35,000,000 shares authorized; 10,999,632 and 10,960,054 issued at March 29, 2014 and December 31, 2013, respectively
|
|
110
|
|
|
110
|
|
||
Treasury stock, at cost - held in treasury 143,300 shares at March 29, 2014 and December 31, 2013
|
|
(1,924
|
)
|
|
(1,924
|
)
|
||
Additional paid-in capital
|
|
71,037
|
|
|
70,542
|
|
||
Retained earnings
|
|
179,457
|
|
|
174,828
|
|
||
Accumulated other comprehensive loss
|
|
(3,793
|
)
|
|
(3,862
|
)
|
||
Total Shareholders’ Equity
|
|
244,887
|
|
|
239,694
|
|
||
Total Liabilities and Shareholders’ Equity
|
|
$
|
753,162
|
|
|
$
|
764,199
|
|
|
|
Three Months Ended
|
||||||
|
|
March 29,
2014 |
|
March 30,
2013 |
||||
Cash Flows from Operating Activities
|
|
|
|
|
||||
Net Income
|
|
$
|
4,629
|
|
|
$
|
3,707
|
|
Adjustments to Reconcile Net Income to
|
|
|
|
|
||||
Net Cash (Used in) Provided by Operating Activities:
|
|
|
|
|
||||
Depreciation and amortization
|
|
7,426
|
|
|
7,033
|
|
||
Stock-based compensation expense
|
|
364
|
|
|
693
|
|
||
Deferred income taxes
|
|
(919
|
)
|
|
(2,040
|
)
|
||
Recovery of doubtful accounts
|
|
(62
|
)
|
|
(157
|
)
|
||
Other
|
|
88
|
|
|
246
|
|
||
Changes in Assets and Liabilities:
|
|
|
|
|
||||
Accounts receivable
|
|
(8,599
|
)
|
|
1,066
|
|
||
Inventories
|
|
(8,388
|
)
|
|
(1,084
|
)
|
||
Production cost of contracts
|
|
513
|
|
|
(2,559
|
)
|
||
Other assets
|
|
5,440
|
|
|
1,456
|
|
||
Accounts payable
|
|
(4,138
|
)
|
|
(2,097
|
)
|
||
Accrued and other liabilities
|
|
(6,067
|
)
|
|
(12,386
|
)
|
||
Net Cash Used in Operating Activities
|
|
(9,713
|
)
|
|
(6,122
|
)
|
||
Cash Flows from Investing Activities
|
|
|
|
|
||||
Purchases of property and equipment
|
|
(2,192
|
)
|
|
(2,612
|
)
|
||
Proceeds from sale of assets
|
|
5
|
|
|
5
|
|
||
Net Cash Used in Investing Activities
|
|
(2,187
|
)
|
|
(2,607
|
)
|
||
Cash Flows from Financing Activities
|
|
|
|
|
||||
Repayment of term loan and other debt
|
|
(7,506
|
)
|
|
(7,506
|
)
|
||
Debt issue cost paid
|
|
—
|
|
|
(181
|
)
|
||
Net proceeds from issuance of common stock under stock plans
|
|
7
|
|
|
(127
|
)
|
||
Net Cash Used in Financing Activities
|
|
(7,499
|
)
|
|
(7,814
|
)
|
||
Net Decrease in Cash and Cash Equivalents
|
|
(19,399
|
)
|
|
(16,543
|
)
|
||
Cash and Cash Equivalents at Beginning of Period
|
|
48,814
|
|
|
46,537
|
|
||
Cash and Cash Equivalents at End of Period
|
|
$
|
29,415
|
|
|
$
|
29,994
|
|
Supplemental Disclosures of Cash Flow Information
|
|
|
|
|
||||
Interest paid
|
|
$
|
11,397
|
|
|
$
|
12,037
|
|
Taxes paid
|
|
$
|
58
|
|
|
$
|
563
|
|
Non-cash activities:
|
|
|
|
|
||||
Purchases of property and equipment not paid
|
|
$
|
182
|
|
|
$
|
—
|
|
|
|
(In thousands, except per share data)
Three Months Ended
|
||||||
|
|
March 29,
2014 |
|
March 30,
2013 |
||||
Net earnings
|
|
$
|
4,629
|
|
|
$
|
3,707
|
|
Weighted-average number of common shares outstanding
|
|
|
|
|
||||
Basic weighted-average common shares outstanding
|
|
10,844
|
|
|
10,600
|
|
||
Dilutive potential common shares
|
|
263
|
|
|
70
|
|
||
Diluted weighted-average common shares outstanding
|
|
11,107
|
|
|
10,670
|
|
||
Earnings per share
|
|
|
|
|
||||
Basic
|
|
$
|
0.43
|
|
|
$
|
0.35
|
|
Diluted
|
|
$
|
0.42
|
|
|
$
|
0.35
|
|
|
|
(In thousands)
|
||||||
|
|
March 29,
|
|
December 31,
|
||||
|
|
2014
|
|
2013
|
||||
Raw materials and supplies
|
|
$
|
77,705
|
|
|
$
|
75,985
|
|
Work in process
|
|
68,531
|
|
|
62,115
|
|
||
Finished goods
|
|
9,786
|
|
|
11,580
|
|
||
|
|
156,022
|
|
|
149,680
|
|
||
Less progress payments
|
|
7,127
|
|
|
9,173
|
|
||
Total
|
|
$
|
148,895
|
|
|
$
|
140,507
|
|
|
|
(In thousands)
|
||||||||||
|
|
Ducommun
AeroStructures
|
|
Ducommun
LaBarge
Technologies
|
|
Consolidated
Ducommun
|
||||||
Gross goodwill
|
|
$
|
57,243
|
|
|
$
|
184,970
|
|
|
$
|
242,213
|
|
Accumulated goodwill impairment
|
|
—
|
|
|
(80,273
|
)
|
|
(80,273
|
)
|
|||
Balance at December 31, 2013
|
|
$
|
57,243
|
|
|
$
|
104,697
|
|
|
$
|
161,940
|
|
Balance at March 29, 2014
|
|
$
|
57,243
|
|
|
$
|
104,697
|
|
|
$
|
161,940
|
|
|
|
(In thousands)
|
||||||
|
|
March 29,
|
|
December 31,
|
||||
|
|
2014
|
|
2013
|
||||
Accrued compensation
|
|
$
|
19,537
|
|
|
$
|
19,929
|
|
Accrued income tax and sales tax
|
|
2,958
|
|
|
1,451
|
|
||
Customer deposits
|
|
2,704
|
|
|
3,236
|
|
||
Interest payable
|
|
4,095
|
|
|
8,965
|
|
||
Provision for forward loss reserves
|
|
4,249
|
|
|
4,825
|
|
||
Other
|
|
6,085
|
|
|
7,047
|
|
||
Total
|
|
$
|
39,628
|
|
|
$
|
45,453
|
|
|
|
(In thousands)
|
||||||
|
|
March 29,
|
|
December 31,
|
||||
|
|
2014
|
|
2013
|
||||
Senior unsecured notes (fixed 9.75%)
|
|
$
|
200,000
|
|
|
$
|
200,000
|
|
Senior secured term loan (floating 4.75%)
|
|
125,125
|
|
|
132,625
|
|
||
Other debt (fixed 5.41%)
|
|
71
|
|
|
77
|
|
||
Total Debt
|
|
325,196
|
|
|
332,702
|
|
||
Less current portion
|
|
25
|
|
|
25
|
|
||
Total long-term debt
|
|
$
|
325,171
|
|
|
$
|
332,677
|
|
Weighted-average interest rate
|
|
7.83
|
%
|
|
7.76
|
%
|
|
|
(In thousands)
|
||||||
|
|
Three Months Ended
|
||||||
|
|
March 29,
2014 |
|
March 30,
2013 |
||||
Service cost
|
|
$
|
173
|
|
|
$
|
211
|
|
Interest cost
|
|
319
|
|
|
290
|
|
||
Expected return on plan assets
|
|
(350
|
)
|
|
(306
|
)
|
||
Amortization of actuarial losses
|
|
105
|
|
|
274
|
|
||
Net periodic pension cost
|
|
$
|
247
|
|
|
$
|
469
|
|
(1)
|
The amortization expense is included in the computation of periodic pension cost and is a decrease to net income upon reclassification from accumulated other comprehensive loss.
|
|
|
(In thousands)
Three Months Ended
|
||||||
|
|
March 29,
|
|
March 30,
|
||||
|
|
2014
|
|
2013
|
||||
Net Sales
|
|
|
|
|
||||
DAS
|
|
$
|
81,654
|
|
|
$
|
72,705
|
|
DLT
|
|
98,099
|
|
|
103,210
|
|
||
Total Net Sales
|
|
$
|
179,753
|
|
|
$
|
175,915
|
|
Segment Operating Income
|
|
|
|
|
||||
DAS
|
|
$
|
10,247
|
|
|
$
|
6,631
|
|
DLT
|
|
7,044
|
|
|
7,934
|
|
||
|
|
17,291
|
|
|
14,565
|
|
||
Corporate General and Administrative Expenses
(1)
|
|
(3,308
|
)
|
|
(4,263
|
)
|
||
Operating Income
|
|
$
|
13,983
|
|
|
$
|
10,302
|
|
Depreciation and Amortization Expenses
|
|
|
|
|
||||
DAS
|
|
$
|
2,416
|
|
|
$
|
2,327
|
|
DLT
|
|
5,008
|
|
|
4,663
|
|
||
Corporate Administration
|
|
2
|
|
|
43
|
|
||
Total Depreciation and Amortization Expenses
|
|
$
|
7,426
|
|
|
$
|
7,033
|
|
Capital Expenditures
|
|
|
|
|
||||
DAS
|
|
$
|
1,285
|
|
|
$
|
1,319
|
|
DLT
|
|
897
|
|
|
1,052
|
|
||
Corporate Administration
|
|
10
|
|
|
241
|
|
||
Total Capital Expenditures
|
|
$
|
2,192
|
|
|
$
|
2,612
|
|
(1)
|
Includes costs not allocated to either the DLT or DAS operating segments.
|
•
|
First quarter revenue grew to $179.8 million from $175.9 million in the prior-year period.
|
•
|
The Company reported net income of approximately $4.6 million, or $0.42 per diluted share.
|
•
|
EBITDA for the quarter was $21.4 million.
|
•
|
We made voluntary principal prepayments totaling $7.5 million on our term loan during the quarter.
|
•
|
Firm backlog as of March 29 was approximately $605 million.
|
•
|
They do not reflect our cash expenditures, future requirements for capital expenditures or contractual commitments;
|
•
|
They do not reflect changes in, or cash requirements for, our working capital needs;
|
•
|
They do not reflect the significant interest expense or the cash requirements necessary to service interest or principal payments on our debt;
|
•
|
Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and EBITDA does not reflect any cash requirements for such replacements;
|
•
|
They are not adjusted for all non-cash income or expense items that are reflected in our statements of cash flows;
|
•
|
They do not reflect the impact on earnings of charges resulting from matters unrelated to our ongoing operations; and
|
•
|
Other companies in our industry may calculate EBITDA differently from us, limiting their usefulness as comparative measures.
|
•
|
Are widely used by investors to measure a company’s operating performance without regard to items excluded from the calculation of such terms, which can vary substantially from company to company depending upon accounting methods and book value of assets, capital structure and the method by which assets were acquired, among other factors;
|
•
|
Help investors to evaluate and compare the results of our operations from period to period by removing the effect of our capital structure from our operating performance; and
|
•
|
Are used by our management team for various other purposes in presentations to our Board of Directors as a basis for strategic planning and forecasting.
|
•
|
Amortization expense may be useful to investors because it represents the estimated attrition of our acquired customer base and the diminishing value of product rights;
|
•
|
Depreciation may be useful to investors because it generally represents the wear and tear on our property and equipment used in our operations;
|
•
|
Interest expense may be useful to investors for determining current cash flow; and
|
•
|
Income tax expense may be useful to investors because it represents the taxes which may be payable for the period and the change in deferred taxes during the period, and may reduce cash flow available for use in our business.
|
|
|
(in thousands, except per share data)
Three Months Ended
|
||||||||||||
|
|
March 29,
2014 |
|
%
of Net Sales
|
|
March 30,
2013 |
|
%
of Net Sales
|
||||||
Net Sales
|
|
$
|
179,753
|
|
|
100.0
|
%
|
|
$
|
175,915
|
|
|
100.0
|
%
|
Cost of Sales
|
|
144,683
|
|
|
80.5
|
%
|
|
143,062
|
|
|
81.3
|
%
|
||
Gross Profit
|
|
35,070
|
|
|
19.5
|
%
|
|
32,853
|
|
|
18.7
|
%
|
||
Selling, General and Administrative Expenses
|
|
21,087
|
|
|
11.7
|
%
|
|
22,551
|
|
|
12.8
|
%
|
||
Interest Expense
|
|
7,125
|
|
|
4.0
|
%
|
|
7,823
|
|
|
4.5
|
%
|
||
Income Before Taxes
|
|
6,858
|
|
|
3.8
|
%
|
|
2,479
|
|
|
1.4
|
%
|
||
Income Tax Expense (Benefit)
|
|
2,229
|
|
|
1.2
|
%
|
|
(1,228
|
)
|
|
(0.7
|
)%
|
||
Net Income
|
|
$
|
4,629
|
|
|
2.6
|
%
|
|
$
|
3,707
|
|
|
2.1
|
%
|
|
|
|
|
|
|
|
|
|
||||||
Effective Tax (Benefit) Rate
|
|
32.5
|
%
|
|
nm
|
|
|
(49.5
|
)%
|
|
nm
|
|
||
Diluted Earnings Per Share
|
|
$
|
0.42
|
|
|
nm
|
|
|
$
|
0.35
|
|
|
nm
|
|
|
|
Three Months Ended
|
||||||||||||||||
|
|
|
|
(In thousands)
|
|
% of Net Sales
|
||||||||||||
|
|
Change
|
|
March 29,
2014 |
|
March 30,
2013 |
|
March 29,
2014 |
|
March 30,
2013 |
||||||||
Consolidated Ducommun
|
|
|
|
|
|
|
|
|
|
|
||||||||
Military and space
|
|
|
|
|
|
|
|
|
|
|
||||||||
Defense technologies
|
|
$
|
(5,843
|
)
|
|
$
|
57,251
|
|
|
$
|
63,094
|
|
|
32
|
%
|
|
36
|
%
|
Defense structures
|
|
3,815
|
|
|
34,196
|
|
|
30,381
|
|
|
19
|
%
|
|
17
|
%
|
|||
Commercial aerospace
|
|
5,208
|
|
|
56,441
|
|
|
51,233
|
|
|
31
|
%
|
|
29
|
%
|
|||
Natural resources
|
|
604
|
|
|
10,775
|
|
|
10,171
|
|
|
6
|
%
|
|
6
|
%
|
|||
Industrial
|
|
(774
|
)
|
|
9,110
|
|
|
9,884
|
|
|
5
|
%
|
|
6
|
%
|
|||
Medical and other
|
|
828
|
|
|
11,980
|
|
|
11,152
|
|
|
7
|
%
|
|
6
|
%
|
|||
Total
|
|
$
|
3,838
|
|
|
$
|
179,753
|
|
|
$
|
175,915
|
|
|
100
|
%
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
DAS
|
|
|
|
|
|
|
|
|
|
|
||||||||
Military and space (defense structures)
|
|
$
|
3,815
|
|
|
$
|
34,196
|
|
|
$
|
30,381
|
|
|
42
|
%
|
|
42
|
%
|
Commercial aerospace
|
|
5,134
|
|
|
47,458
|
|
|
42,324
|
|
|
58
|
%
|
|
58
|
%
|
|||
Total
|
|
$
|
8,949
|
|
|
$
|
81,654
|
|
|
$
|
72,705
|
|
|
100
|
%
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
DLT
|
|
|
|
|
|
|
|
|
|
|
||||||||
Military and space (defense technologies)
|
|
$
|
(5,843
|
)
|
|
$
|
57,251
|
|
|
$
|
63,094
|
|
|
59
|
%
|
|
61
|
%
|
Commercial aerospace
|
|
74
|
|
|
8,983
|
|
|
8,909
|
|
|
9
|
%
|
|
9
|
%
|
|||
Natural resources
|
|
604
|
|
|
10,775
|
|
|
10,171
|
|
|
11
|
%
|
|
10
|
%
|
|||
Industrial
|
|
(774
|
)
|
|
9,110
|
|
|
9,884
|
|
|
9
|
%
|
|
9
|
%
|
|||
Medical and other
|
|
828
|
|
|
11,980
|
|
|
11,152
|
|
|
12
|
%
|
|
11
|
%
|
|||
Total
|
|
$
|
(5,111
|
)
|
|
$
|
98,099
|
|
|
$
|
103,210
|
|
|
100
|
%
|
|
100
|
%
|
|
|
March 29,
2014 |
|
March 30,
2013 |
||
Boeing
|
|
16
|
%
|
|
16
|
%
|
Raytheon
|
|
7
|
%
|
|
7
|
%
|
|
|
Three Months Ended
|
|||||||||||||||
|
|
%
|
|
(In thousands)
|
|
%
of Net Sales
|
|||||||||||
|
|
Change
|
|
March 29,
2014 |
|
March 30,
2013 |
|
March 29,
2014 |
|
March 30,
2013 |
|||||||
Net Sales
|
|
|
|
|
|
|
|
|
|
|
|||||||
DAS
|
|
12.3
|
%
|
|
$
|
81,654
|
|
|
$
|
72,705
|
|
|
45.4
|
%
|
|
41.3
|
%
|
DLT
|
|
(5.0
|
)%
|
|
98,099
|
|
|
103,210
|
|
|
54.6
|
%
|
|
58.7
|
%
|
||
Total Net Sales
|
|
2.2
|
%
|
|
$
|
179,753
|
|
|
$
|
175,915
|
|
|
100.0
|
%
|
|
100.0
|
%
|
Segment Operating Income
|
|
|
|
|
|
|
|
|
|
|
|||||||
DAS
|
|
|
|
$
|
10,247
|
|
|
$
|
6,631
|
|
|
12.5
|
%
|
|
9.1
|
%
|
|
DLT
|
|
|
|
7,044
|
|
|
7,934
|
|
|
7.2
|
%
|
|
7.7
|
%
|
|||
|
|
|
|
17,291
|
|
|
14,565
|
|
|
|
|
|
|||||
Corporate General and Administrative Expenses
(1)
|
|
|
|
(3,308
|
)
|
|
(4,263
|
)
|
|
(1.8
|
)%
|
|
(2.4
|
)%
|
|||
Total Operating Income
|
|
|
|
$
|
13,983
|
|
|
$
|
10,302
|
|
|
7.8
|
%
|
|
5.9
|
%
|
|
EBITDA
|
|
|
|
|
|
|
|
|
|
|
|||||||
DAS
|
|
|
|
|
|
|
|
|
|
|
|||||||
Operating Income
|
|
|
|
$
|
10,247
|
|
|
$
|
6,631
|
|
|
|
|
|
|||
Depreciation and Amortization
|
|
|
|
2,416
|
|
|
2,327
|
|
|
|
|
|
|||||
|
|
|
|
12,663
|
|
|
8,958
|
|
|
15.5
|
%
|
|
12.3
|
%
|
|||
DLT
|
|
|
|
|
|
|
|
|
|
|
|||||||
Operating Income
|
|
|
|
7,044
|
|
|
7,934
|
|
|
|
|
|
|||||
Depreciation and Amortization
|
|
|
|
5,008
|
|
|
4,663
|
|
|
|
|
|
|||||
|
|
|
|
12,052
|
|
|
12,597
|
|
|
12.3
|
%
|
|
12.2
|
%
|
|||
Corporate General and Administrative Expenses
(1)
|
|
|
|
|
|
|
|
|
|
|
|||||||
Operating Loss
|
|
|
|
(3,308
|
)
|
|
(4,263
|
)
|
|
|
|
|
|||||
Depreciation and Amortization
|
|
|
|
2
|
|
|
43
|
|
|
|
|
|
|||||
|
|
|
|
(3,306
|
)
|
|
(4,220
|
)
|
|
|
|
|
|||||
EBITDA
|
|
|
|
$
|
21,409
|
|
|
$
|
17,335
|
|
|
11.9
|
%
|
|
9.9
|
%
|
(1)
|
Includes costs not allocated to either the DLT or DAS operating segments.
|
|
|
(In millions)
|
||||||
|
|
March 29,
|
|
December 31,
|
||||
|
|
2014
|
|
2013
|
||||
Total debt, including long-term portion
|
|
$
|
325.2
|
|
|
$
|
332.7
|
|
Weighted-average interest rate on debt
|
|
7.83
|
%
|
|
7.76
|
%
|
||
Term Loan interest rate
|
|
4.75
|
%
|
|
4.75
|
%
|
||
Cash and cash equivalents
|
|
$
|
29.4
|
|
|
$
|
48.8
|
|
Unused Revolving Credit Facility
|
|
$
|
58.4
|
|
|
$
|
58.4
|
|
2.1
|
Agreement and Plan of Merger, dated as of April 3, 2011, among Ducommun Incorporated, DLBMS, Inc. and LaBarge, Inc. Incorporated by reference to Exhibit 2.1 to Form 8-K filed on April 5, 2011.
|
3.1
|
Restated Certificate of Incorporation filed with the Delaware Secretary of State on May 29, 1990. Incorporated by reference to Exhibit 3.1 to Form 10-K for the year ended December 31, 1990.
|
3.2
|
Certificate of Amendment of Certificate of Incorporation filed with the Delaware Secretary of State on May 27, 1998. Incorporated by reference to Exhibit 3.2 to Form 10-K for the year ended December 31, 1998.
|
3.3
|
Bylaws as amended and restated on March 19, 2013. Incorporated by reference to Exhibit 99.1 to Form 8-K dated March 22, 2013.
|
3.4
|
Amendment No. 2 to Bylaws dated August 1, 2013. Incorporated by reference to Exhibit 99.2 to Form 8-K dated August 5, 2013.
|
4.1
|
Indenture, dated June 28, 2011, between Ducommun Incorporated, certain of its subsidiaries and Wilmington Trust FSB, as trustee. Incorporated by reference to Exhibit 4.1 to Form 8-K filed on July 1, 2011.
|
4.2
|
Registration Rights Agreement, dated June 28, 2011, between Ducommun Incorporated, certain of its subsidiaries, UBS Securities LLC and Credit Suisse Securities (USA) LLC. Incorporated by reference to Exhibit 4.2 to Form 8-K filed on July 1, 2011.
|
10.1
|
Commitment Letter to Ducommun Incorporated, dated April 3, 2011 from UBS Loan Finance LLC and UBS Securities LLC, Credit Suisse Securities (USA) LLC and Credit Suisse AG. Incorporated by reference to Exhibit 10.1 to Form 8-K filed on April 5, 2011.
|
10.2
|
Credit Agreement, dated as of June 28, 2011, among Ducommun Incorporated, certain of its subsidiaries, UBS Securities LLC and Credit Suisse Securities (USA) LLC as joint lead arrangers, UBS AG, Stamford Branch as issuing bank, administrative agent and collateral agent, and other lenders party thereto. Incorporated by reference to Exhibit 10.1 to Form 8-K filed on July 1, 2011.
|
10.3
|
Amendment No. 1 to Credit Agreement, dated as of March 28, 2013, by and among Ducommun Incorporated, certain of its subsidiaries, UBS AG, Stamford Branch as administrative agent, collateral agent, swingline bank and issuing bank and other lenders party thereto. Incorporated by reference to Exhibit 10.1 to Form 8-K dated March 28, 2013.
|
10.4
|
Amendment No. 2 to Credit Agreement, dated as of October 18, 2013 by and among Ducommun Incorporated, certain of its subsidiaries, and UBS AG, Stamford Branch, as administrative agent, collateral agent, swingline bank and issuing bank, and other lenders party thereto. Incorporated by reference to Exhibit 10.1 to Form 8-K dated October 23, 2013.
|
*10.13
|
Form of Key Executive Severance Agreement entered with seven current executive officers of Ducommun. Incorporated by reference to Exhibit 99.1 to Form 8-K dated January 9, 2008. Incorporated by reference to Exhibit 99.1 to Form 8-K dated January 9, 2008. All of the Key Executive Severance Agreements are identical except for the name of the executive officer, the address for notice, and the date of the Agreement:
|
|
Executive Officer
|
|
Date of Agreement
|
|
|
Kathryn M. Andrus
|
|
February 18, 2014
|
|
|
Joseph P. Bellino
|
|
November 5, 2009
|
|
|
Joel H. Benkie
|
|
December 13, 2013
|
|
|
Douglas L. Groves
|
|
February 18, 2014
|
|
|
James S. Heiser
|
|
December 31, 2007
|
|
|
Anthony J. Reardon
|
|
December 31, 2007
|
|
|
Rose F. Rogers
|
|
November 5, 2009
|
|
*10.14
|
Form of Indemnity Agreement entered with all directors and officers of Ducommun. Incorporated by reference to Exhibit 10.8 to Form 10-K for the year ended December 31, 1990. All of the Indemnity Agreements are identical except for the name of the director or officer and the date of the Agreement:
|
|
Director/Officer
|
|
Date of Agreement
|
|
|
Kathryn M. Andrus
|
|
January 30, 2008
|
|
|
Richard A. Baldridge
|
|
March 19, 2013
|
|
|
Joseph C. Berenato
|
|
November 4, 1991
|
|
|
Joseph P. Bellino
|
|
September 15, 2008
|
|
|
Joel H. Benkie
|
|
February 12, 2013
|
|
|
Gregory S. Churchill
|
|
March 19, 2013
|
|
|
Robert C. Ducommun
|
|
December 31, 1985
|
|
|
Dean W. Flatt
|
|
November 5, 2009
|
|
|
Douglas L. Groves
|
|
February 12, 2013
|
|
|
Jay L. Haberland
|
|
February 2, 2009
|
|
|
James S. Heiser
|
|
May 6, 1987
|
|
|
Robert D. Paulson
|
|
March 25, 2003
|
|
|
Anthony J. Reardon
|
|
January 8, 2008
|
|
|
Rosalie F. Rogers
|
|
July 24, 2008
|
|
*10.17
|
Employment Letter Agreement dated September 5, 2008 between Ducommun Incorporated and Joseph P. Bellino. Incorporated by reference to Exhibit 99.1 to Form 8-K dated September 18, 2008.
|
*10.18
|
Employment Letter Agreement dated May 3, 2012 between Ducommun Incorporated and Joel H. Benkie. Incorporated by reference to Exhibit 99.1 to Form 8-K dated June 4, 2012.
|
*10.19
|
Form of Performance Stock Unit Agreement for 2014 and after.
|
31.1
|
Certification of Principal Executive Officer.
|
31.2
|
Certification of Principal Financial Officer.
|
32
|
Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
101.INS
|
XBRL Instance Document
|
Date: April 28, 2014
|
By:
|
|
/s/ Anthony J. Reardon
|
|
|
|
Anthony J. Reardon
|
|
|
|
Chairman and Chief Executive Officer
|
|
|
|
(Principal Executive Officer)
|
|
|
|
|
Date: April 28, 2014
|
By:
|
|
/s/ Joseph P. Bellino
|
|
|
|
Joseph P. Bellino
|
|
|
|
Vice President, Treasurer and Chief Financial Officer
|
|
|
|
(Principal Financial Officer)
|
|
|
|
|
Date: April 28, 2014
|
By:
|
|
/s/ Douglas L. Groves
|
|
|
|
Douglas L. Groves
|
|
|
|
Vice President, Controller and Chief Accounting Officer
|
|
|
|
(Principal Accounting Officer)
|
(1)
|
Target represents approximately 6% compound annual growth from the 2013 Threshold
|
(2)
|
Maximum represents approximately 15% compound annual growth from the 2013 Threshold
|
1.
|
I have reviewed this Quarterly Report of Ducommun Incorporated (the “registrant”) on Form 10-Q for the period ended
March 29, 2014
;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f), and 15d-15(f) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ Anthony J. Reardon
|
Anthony J. Reardon
|
Chairman and Chief Executive Officer
|
1.
|
I have reviewed this Quarterly Report of Ducommun Incorporated (the “registrant”) on Form 10-Q for the period ended
March 29, 2014
;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f), for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d.
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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a.
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b.
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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/s/ Joseph P. Bellino
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Joseph P. Bellino
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Vice President, Treasurer and Chief Financial Officer
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By:
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/s/ Anthony J. Reardon
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Anthony J. Reardon
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Chairman and Chief Executive Officer
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April 28, 2014
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By:
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/s/ Joseph P. Bellino
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Joseph P. Bellino
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Vice President, Treasurer and Chief Financial Officer
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April 28, 2014
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