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x
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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95-0693330
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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23301 Wilmington Avenue, Carson, California
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90745-6209
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(Address of principal executive offices)
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(Zip code)
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Title of each class
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Name of each exchange on which registered
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Common Stock, $.01 par value per share
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New York Stock Exchange
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Large accelerated filer
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¨
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Accelerated filer
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x
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Non-accelerated filer
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¨
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Smaller reporting company
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¨
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Page
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Item 1.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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Item 15.
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Item 16.
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•
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our ability to manage and otherwise comply with our covenants with respect to our outstanding indebtedness;
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•
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our ability to service our indebtedness;
|
•
|
the cyclicality of our end-use markets and the level of new commercial and military aircraft orders;
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•
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industry and customer concentration;
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•
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production rates for various commercial and military aircraft programs;
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•
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the level of U.S. Government defense spending, including the impact of sequestration;
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•
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compliance with applicable regulatory requirements and changes in regulatory requirements, including regulatory requirements applicable to government contracts and sub-contracts;
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•
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further consolidation of customers and suppliers in our markets;
|
•
|
product performance and delivery;
|
•
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start-up costs, manufacturing inefficiencies and possible overruns on contracts;
|
•
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increased design, product development, manufacturing, supply chain and other risks and uncertainties associated with our growth strategy to become a Tier 2 supplier of higher-level assemblies;
|
•
|
our ability to manage the risks associated with international operations and sales;
|
•
|
possible additional goodwill and other asset impairments;
|
•
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economic and geopolitical developments and conditions;
|
•
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unfavorable developments in the global credit markets;
|
•
|
our ability to operate within highly competitive markets;
|
•
|
technology changes and evolving industry and regulatory standards;
|
•
|
the risk of environmental liabilities; and
|
•
|
litigation with respect to us.
|
•
|
limit our ability to obtain additional financing to fund future working capital, capital expenditures, investments or acquisitions or other general corporate requirements;
|
•
|
require a substantial portion of our cash flows to be dedicated to debt service payments instead of other purposes, thereby reducing the amount of cash flows available for working capital, capital expenditures, investments or acquisitions or other general corporate purposes;
|
•
|
increase our vulnerability to adverse changes in general economic, industry and competitive conditions;
|
•
|
place us at a disadvantage compared to other, less leveraged competitors;
|
•
|
expose us to the risk of increased borrowing costs and higher interest rates as approximately one half of our borrowings under our Credit Facilities bear interest at variable rates, which could further adversely impact our cash flows;
|
•
|
limit our flexibility to plan for and react to changes in our business and the industry in which we compete;
|
•
|
restrict us from making strategic acquisitions or causing us to make non-strategic divestitures;
|
•
|
expose us to risk of rating agency downgrades and unfavorable changes in the global credit markets; and
|
•
|
make it more difficult for us to satisfy our obligations with respect to the Credit Facilities and our other debt.
|
•
|
terminate existing contracts, in whole or in part, for convenience, as well as for default, or if funds for contract performance for any subsequent year become unavailable;
|
•
|
suspend or debar us from doing business with the federal government or with a governmental agency;
|
•
|
prohibit future procurement awards with a particular agency as a result of a finding of an organizational conflict of interest based upon prior related work performed for the agency that would give a contractor an unfair advantage over competing contractors;
|
•
|
claim rights in products and systems produced by us; and
|
•
|
control or prohibit the export of the products and related services we offer.
|
•
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difficulty in integrating the operations and personnel of the acquired company within our existing operations or in maintaining uniform standards;
|
•
|
loss of key employees or customers of the acquired company;
|
•
|
the failure to achieve anticipated synergies;
|
•
|
unrecorded liabilities of acquired companies that we fail to discover during our due diligence investigations or that are not subject to indemnification or reimbursement by the seller; and
|
•
|
management and other personnel having their time and resources diverted to evaluate, negotiate and integrate acquisitions.
|
•
|
political instability;
|
•
|
economic and geopolitical developments and conditions;
|
•
|
compliance with a variety of international laws, as well as U.S. laws affecting the activities of U.S. companies conducting business abroad, including, but not limited to, the Foreign Corrupt Practices Act;
|
•
|
imposition of taxes, export controls, tariffs, embargoes and other trade restrictions;
|
•
|
difficulties repatriating funds or restrictions on cash transfers; and
|
•
|
potential for new tariffs imposed on imports by the new U.S. administration.
|
Location
|
|
Segment
|
|
Square
Feet
|
|
Expiration
of Lease
|
Carson, California
|
|
Structural Systems
|
|
299,000
|
|
Owned
|
Monrovia, California
|
|
Structural Systems
|
|
274,000
|
|
Owned
|
Coxsackie, New York
|
|
Structural Systems
|
|
168,000
|
|
Owned
|
Parsons, Kansas
|
|
Structural Systems
|
|
120,000
|
|
Owned
|
Carson, California
|
|
Electronic Systems
|
|
117,000
|
|
2021
|
Phoenix, Arizona
|
|
Electronic Systems
|
|
100,000
|
|
2022
|
Joplin, Missouri
|
|
Electronic Systems
|
|
92,000
|
|
Owned
|
Appleton, Wisconsin
|
|
Electronic Systems
|
|
77,000
|
|
Owned
|
Orange, California
|
|
Structural Systems
|
|
76,000
|
|
Owned
|
Adelanto, California
|
|
Structural Systems
|
|
74,000
|
|
Owned
|
Huntsville, Arkansas
|
|
Electronic Systems
|
|
69,000
|
|
2020
|
Carson, California
|
|
Structural Systems
|
|
77,000
|
|
2019
|
Joplin, Missouri
|
|
Electronic Systems
|
|
55,000
|
|
2021
|
Tulsa, Oklahoma
|
|
Electronic Systems
|
|
55,000
|
|
Owned
|
Berryville, Arkansas
|
|
Electronic Systems
|
|
52,000
|
|
Owned
|
|
|
Years Ended December 31,
|
||||||||||||||
|
|
2016
|
|
2015
|
||||||||||||
|
|
High
|
|
Low
|
|
High
|
|
Low
|
||||||||
First Quarter
|
|
$
|
16.98
|
|
|
$
|
12.89
|
|
|
$
|
27.00
|
|
|
$
|
24.09
|
|
Second Quarter
|
|
$
|
20.69
|
|
|
$
|
14.32
|
|
|
$
|
33.22
|
|
|
$
|
23.07
|
|
Third Quarter
|
|
$
|
24.41
|
|
|
$
|
19.02
|
|
|
$
|
26.12
|
|
|
$
|
19.14
|
|
Fourth Quarter
|
|
$
|
29.46
|
|
|
$
|
18.80
|
|
|
$
|
23.28
|
|
|
$
|
14.96
|
|
|
|
(In thousands, except per share amounts)
Years Ended December 31,
|
||||||||||||||||||
|
|
2016(a)
|
|
2015(b)(c)
|
|
2014
|
|
2013(d)
|
|
2012
|
||||||||||
Net Revenues
|
|
$
|
550,642
|
|
|
$
|
666,011
|
|
|
$
|
742,045
|
|
|
$
|
736,650
|
|
|
$
|
747,037
|
|
Gross Profit as a Percentage of Net Revenues
|
|
19.3
|
%
|
|
15.1
|
%
|
|
18.9
|
%
|
|
16.9
|
%
|
|
19.3
|
%
|
|||||
Income (Loss) Before Taxes
|
|
38,113
|
|
|
(106,590
|
)
|
|
26,240
|
|
|
9,385
|
|
|
24,124
|
|
|||||
Income Tax Expense (Benefit)
|
|
12,852
|
|
|
(31,711
|
)
|
|
6,373
|
|
|
(1,993
|
)
|
|
6,501
|
|
|||||
Net Income (Loss)
|
|
$
|
25,261
|
|
|
$
|
(74,879
|
)
|
|
$
|
19,867
|
|
|
$
|
11,378
|
|
|
$
|
17,623
|
|
Per Common Share
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic earnings (loss) per share
|
|
$
|
2.27
|
|
|
$
|
(6.78
|
)
|
|
$
|
1.82
|
|
|
$
|
1.06
|
|
|
$
|
1.67
|
|
Diluted earnings (loss) per share
|
|
$
|
2.24
|
|
|
$
|
(6.78
|
)
|
|
$
|
1.79
|
|
|
$
|
1.05
|
|
|
$
|
1.66
|
|
Working Capital
|
|
$
|
139,635
|
|
|
$
|
179,655
|
|
|
$
|
217,670
|
|
|
$
|
225,323
|
|
|
$
|
219,774
|
|
Total Assets
(e)
|
|
$
|
515,429
|
|
|
$
|
557,081
|
|
|
$
|
747,599
|
|
|
$
|
762,645
|
|
|
$
|
777,275
|
|
Long-Term Debt, Including Current Portion
(e)
|
|
$
|
166,899
|
|
|
$
|
240,687
|
|
|
$
|
290,052
|
|
|
$
|
332,702
|
|
|
$
|
365,744
|
|
Total Shareholders’ Equity
|
|
$
|
212,103
|
|
|
$
|
185,734
|
|
|
$
|
256,570
|
|
|
$
|
234,271
|
|
|
$
|
215,217
|
|
(a)
|
The results for 2016 included a gain on divestitures, net in our Electronic Systems operating segment of
$17.6 million
related to the divestitures of our Pittsburgh and Miltec operations.
|
(b)
|
The results for 2015 included a goodwill impairment charge in our Structural Systems operating segment and an indefinite-lived trade name intangible asset impairment charge in our Electronic Systems operating segment of $57.2 million and $32.9 million, respectively, resulting from our annual impairment testing.
|
(c)
|
The results for 2015 included a loss on extinguishment of debt of $14.7 million related to the retirement of the $200.0 million senior unsecured notes and existing credit facility.
|
(d)
|
The results for 2013 included a $14.1 million in charges related to the Embraer Legacy 450/500 and Boeing 777 wing tip contracts and was comprised of $7.0 million of asset impairment charges for production cost of contracts; $5.2 million of forward loss reserves and $1.9 million of inventory write-offs.
|
(e)
|
Total assets and long-term debt for the years 2014 - 2012 have not been recasted for the impact of the adoption of Accounting Standards Update 2015-03, as amended by Accounting Standards Update 2015-15, which required the reclassification of certain debt issuance costs from an asset to a liability. See Note 1 to our consolidated financial statements included in Part IV, Item 15(a) of this Annual Report on Form 10-K for further information.
|
•
|
Net revenues were
$550.6 million
|
•
|
Net income was
$25.3 million
, or
$2.24
per diluted share, which includes a pre-tax net gain on divestitures of
$17.6 million
|
•
|
Adjusted EBITDA was
$54.8 million
|
•
|
Cash flow from operations increased to
$43.3 million
|
•
|
Backlog increased to
$600.3 million
|
•
|
Net voluntary principal prepayments on our term loan totaled
$75.0 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 Adjusted 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 Adjusted 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.
|
•
|
Interest expense may be useful to investors for determining current cash flow;
|
•
|
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;
|
•
|
Depreciation may be useful to investors because it generally represents the wear and tear on our property and equipment used in our operations;
|
•
|
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;
|
•
|
Stock-based compensation may be useful to our investors for determining current cash flow;
|
•
|
Net gain on divestitures may be useful to our investors in evaluating our on-going operating performance;
|
•
|
Loss on extinguishment of debt may be useful to our investors for determining current cash flow;
|
•
|
Asset impairments (including Goodwill and intangible assets) may be useful to our investors because it generally represents a decline in value in our assets used in our operations; and
|
•
|
Restructuring charges may be useful to our investors in evaluating our core operating performance.
|
|
|
(In thousands)
Years Ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
Net income (loss)
|
|
$
|
25,261
|
|
|
$
|
(74,879
|
)
|
|
$
|
19,867
|
|
Interest expense
|
|
8,274
|
|
|
18,709
|
|
|
28,077
|
|
|||
Income tax expense (benefit)
|
|
12,852
|
|
|
(31,711
|
)
|
|
6,373
|
|
|||
Depreciation
|
|
13,326
|
|
|
15,707
|
|
|
15,277
|
|
|||
Amortization
|
|
9,534
|
|
|
11,139
|
|
|
13,747
|
|
|||
Stock-based compensation expense
|
|
3,007
|
|
|
3,495
|
|
|
3,725
|
|
|||
Gain on divestitures, net
(1)
|
|
(17,604
|
)
|
|
—
|
|
|
—
|
|
|||
Loss on extinguishment of debt
|
|
—
|
|
|
14,720
|
|
|
—
|
|
|||
Goodwill impairment
(2)
|
|
—
|
|
|
57,243
|
|
|
—
|
|
|||
Intangible asset impairment
(3)
|
|
—
|
|
|
32,937
|
|
|
—
|
|
|||
Restructuring charges
|
|
182
|
|
|
2,125
|
|
|
—
|
|
|||
Adjusted EBITDA
|
|
$
|
54,832
|
|
|
$
|
49,485
|
|
|
$
|
87,066
|
|
% of net revenues
|
|
10.0
|
%
|
|
7.4
|
%
|
|
11.7
|
%
|
(1)
|
2016 included gain on divestitures, net in our Electronic Systems operating segment related to the divestitures of our Pittsburgh and Miltec operations.
|
(2)
|
2015 included goodwill impairment related to our Structural Systems operating segment.
|
(3)
|
2015 included intangible asset impairment related to our Electronic Systems operating segment.
|
|
|
(in thousands, except per share data)
Years Ended December 31,
|
||||||||||||
|
|
2016
|
|
%
of Net Revenues
|
|
2015
|
|
%
of Net Revenues
|
||||||
Net Revenues
|
|
$
|
550,642
|
|
|
100.0
|
%
|
|
$
|
666,011
|
|
|
100.0
|
%
|
Cost of Sales
|
|
444,449
|
|
|
80.7
|
%
|
|
565,219
|
|
|
84.9
|
%
|
||
Gross Profit
|
|
106,193
|
|
|
19.3
|
%
|
|
100,792
|
|
|
15.1
|
%
|
||
Selling, General and Administrative Expenses
|
|
77,625
|
|
|
14.1
|
%
|
|
85,921
|
|
|
12.9
|
%
|
||
Goodwill Impairment
|
|
—
|
|
|
—
|
%
|
|
57,243
|
|
|
8.6
|
%
|
||
Intangible Asset Impairment
|
|
—
|
|
|
—
|
%
|
|
32,937
|
|
|
4.9
|
%
|
||
Operating Income (Loss)
|
|
28,568
|
|
|
5.2
|
%
|
|
(75,309
|
)
|
|
(11.3
|
)%
|
||
Interest Expense
|
|
(8,274
|
)
|
|
(1.5
|
)%
|
|
(18,709
|
)
|
|
(2.8
|
)%
|
||
Gain on Divestitures, Net
|
|
17,604
|
|
|
3.2
|
%
|
|
—
|
|
|
—
|
%
|
||
Loss on Extinguishment of Debt
|
|
—
|
|
|
—
|
%
|
|
(14,720
|
)
|
|
(2.2
|
)%
|
||
Other Income, Net
|
|
215
|
|
|
—
|
%
|
|
2,148
|
|
|
0.3
|
%
|
||
Income (Loss) Before Taxes
|
|
38,113
|
|
|
6.9
|
%
|
|
(106,590
|
)
|
|
(16.0
|
)%
|
||
Income Tax Expense (Benefit)
|
|
12,852
|
|
|
nm
|
|
|
(31,711
|
)
|
|
nm
|
|
||
Net Income (Loss)
|
|
$
|
25,261
|
|
|
4.6
|
%
|
|
$
|
(74,879
|
)
|
|
(11.2
|
)%
|
|
|
|
|
|
|
|
|
|
||||||
Effective Tax Rate (Benefit)
|
|
33.7
|
%
|
|
nm
|
|
|
(29.7
|
)%
|
|
nm
|
|
||
Diluted Earnings (Loss) Per Share
|
|
$
|
2.24
|
|
|
nm
|
|
|
$
|
(6.78
|
)
|
|
nm
|
|
|
|
|
|
(In thousands)
Years Ended December 31,
|
|
% of Net Sales
|
||||||||||||
|
|
Change
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Consolidated Ducommun
|
|
|
|
|
|
|
|
|
|
|
||||||||
Military and space
|
|
|
|
|
|
|
|
|
|
|
||||||||
Defense technologies
|
|
$
|
(37,342
|
)
|
|
$
|
175,195
|
|
|
$
|
212,537
|
|
|
31.8
|
%
|
|
31.9
|
%
|
Defense structures
|
|
(21,716
|
)
|
|
53,378
|
|
|
75,094
|
|
|
9.7
|
%
|
|
11.3
|
%
|
|||
Commercial aerospace
|
|
14,221
|
|
|
263,522
|
|
|
249,301
|
|
|
47.9
|
%
|
|
37.4
|
%
|
|||
Industrial
|
|
(70,532
|
)
|
|
58,547
|
|
|
129,079
|
|
|
10.6
|
%
|
|
19.4
|
%
|
|||
Total
|
|
$
|
(115,369
|
)
|
|
$
|
550,642
|
|
|
$
|
666,011
|
|
|
100.0
|
%
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Structural Systems
|
|
|
|
|
|
|
|
|
|
|
||||||||
Military and space (defense structures)
|
|
$
|
(21,716
|
)
|
|
$
|
53,378
|
|
|
$
|
75,094
|
|
|
21.7
|
%
|
|
27.5
|
%
|
Commercial aerospace
|
|
(5,138
|
)
|
|
193,087
|
|
|
198,225
|
|
|
78.3
|
%
|
|
72.5
|
%
|
|||
Total
|
|
$
|
(26,854
|
)
|
|
$
|
246,465
|
|
|
$
|
273,319
|
|
|
100.0
|
%
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Electronic Systems
|
|
|
|
|
|
|
|
|
|
|
||||||||
Military and space (defense technologies)
|
|
$
|
(37,342
|
)
|
|
$
|
175,195
|
|
|
$
|
212,537
|
|
|
57.6
|
%
|
|
54.1
|
%
|
Commercial aerospace
|
|
19,359
|
|
|
70,435
|
|
|
51,076
|
|
|
23.2
|
%
|
|
13.0
|
%
|
|||
Industrial
|
|
(70,532
|
)
|
|
58,547
|
|
|
129,079
|
|
|
19.2
|
%
|
|
32.9
|
%
|
|||
Total
|
|
$
|
(88,515
|
)
|
|
$
|
304,177
|
|
|
$
|
392,692
|
|
|
100.0
|
%
|
|
100.0
|
%
|
•
|
$70.5 million lower revenues in our industrial end-use markets mainly due to the divestiture of our Pittsburgh operation in January 2016 and closure of our Houston operation in December 2015;
|
•
|
$59.1 million lower revenues in our military and space end-use markets mainly due to the divestiture of our Miltec operations in March 2016, as well as program delays and budget changes, which impacted our fixed-wing and helicopter platforms and pushed out scheduled deliveries of these products to customers; partially offset by
|
•
|
$14.2 million higher revenues in our commercial aerospace end-use markets mainly due to added content with existing customers.
|
|
|
Years Ended December 31,
|
||||
|
|
2016
|
|
2015
|
||
Boeing Company
|
|
17.3
|
%
|
|
16.0
|
%
|
Raytheon Company
|
|
8.4
|
%
|
|
8.7
|
%
|
Spirit AeroSystems Holdings, Inc.
|
|
8.2
|
%
|
|
7.4
|
%
|
United Technologies Corporation
|
|
6.0
|
%
|
|
6.1
|
%
|
Top ten customers
(1)
|
|
58.6
|
%
|
|
55.7
|
%
|
•
|
2015 included a forward loss reserve charge related to a regional jet program of $12.2 million; and
|
•
|
Total material costs as a percentage of revenues decreased 1.8% compared to the prior year as a result of our on-going supply chain initiatives and improved operating performance.
|
•
|
Prior year included a non-cash pre-tax goodwill impairment charge of $57.2 million;
|
•
|
Prior year included a non-cash pre-tax charge related to the impairment of an indefinite-lived trade name of $32.9 million;
|
•
|
Prior year included a loss on extinguishment of debt of $14.7 million related to completing a new credit facility to replace the existing credit facilities along with the redemption of the $200.0 million senior unsecured notes;
|
•
|
Prior year included a forward loss reserve charge related to a regional jet program of $12.2 million;
|
•
|
A pre-tax gain on divestitures, net of our Pittsburgh and Miltec operations of $17.6 million;
|
•
|
Lower interest expense of $10.4 million;
|
•
|
Lower SG&A expenses related to the divestitures of our Pittsburgh and Miltec operations and closures of facilities in aggregate totaling $9.4 million; and
|
•
|
Improved operating performance; partially offset by
|
•
|
Higher income tax expense of $44.6 million.
|
|
|
%
|
|
(In thousands)
Years Ended December 31,
|
|
%
of Net Sales
|
|
%
of Net Sales
|
|||||||||
|
|
Change
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|||||||
Net Revenues
|
|
|
|
|
|
|
|
|
|
|
|||||||
Structural Systems
|
|
(9.8
|
)%
|
|
$
|
246,465
|
|
|
$
|
273,319
|
|
|
44.8
|
%
|
|
41.0
|
%
|
Electronic Systems
|
|
(22.5
|
)%
|
|
304,177
|
|
|
392,692
|
|
|
55.2
|
%
|
|
59.0
|
%
|
||
Total Net Revenues
|
|
(17.3
|
)%
|
|
$
|
550,642
|
|
|
$
|
666,011
|
|
|
100.0
|
%
|
|
100.0
|
%
|
Segment Operating Income (Loss)
|
|
|
|
|
|
|
|
|
|
|
|||||||
Structural Systems
|
|
|
|
$
|
16,497
|
|
|
$
|
(53,010
|
)
|
|
6.7
|
%
|
|
(19.4
|
)%
|
|
Electronic Systems
|
|
|
|
28,983
|
|
|
(4,472
|
)
|
|
9.5
|
%
|
|
(1.1
|
)%
|
|||
|
|
|
|
45,480
|
|
|
(57,482
|
)
|
|
|
|
|
|||||
Corporate General and Administrative Expenses
(1)
|
|
|
|
(16,912
|
)
|
|
(17,827
|
)
|
|
(3.1
|
)%
|
|
(2.7
|
)%
|
|||
Total Operating Income (Loss)
|
|
|
|
$
|
28,568
|
|
|
$
|
(75,309
|
)
|
|
5.2
|
%
|
|
(11.3
|
)%
|
|
Adjusted EBITDA
|
|
|
|
|
|
|
|
|
|
|
|||||||
Structural Systems
|
|
|
|
|
|
|
|
|
|
|
|||||||
Operating Income (Loss)
(2)(3)
|
|
|
|
$
|
16,497
|
|
|
$
|
(53,010
|
)
|
|
|
|
|
|||
Other Income
(4)
|
|
|
|
141
|
|
|
1,510
|
|
|
|
|
|
|||||
Depreciation and Amortization
|
|
|
|
8,688
|
|
|
9,417
|
|
|
|
|
|
|||||
Goodwill Impairment
|
|
|
|
—
|
|
|
57,243
|
|
|
|
|
|
|||||
Restructuring Charges
|
|
|
|
—
|
|
|
1,294
|
|
|
|
|
|
|||||
|
|
|
|
25,326
|
|
|
16,454
|
|
|
10.3
|
%
|
|
6.0
|
%
|
|||
Electronic Systems
|
|
|
|
|
|
|
|
|
|
|
|||||||
Operating Income (Loss)
(3)(5)
|
|
|
|
28,983
|
|
|
(4,472
|
)
|
|
|
|
|
|||||
Other Income
|
|
|
|
—
|
|
|
712
|
|
|
|
|
|
|||||
Depreciation and Amortization
|
|
|
|
14,087
|
|
|
17,267
|
|
|
|
|
|
|||||
Intangible Asset Impairment
|
|
|
|
—
|
|
|
32,937
|
|
|
|
|
|
|||||
Restructuring Charges
|
|
|
|
182
|
|
|
831
|
|
|
|
|
|
|||||
|
|
|
|
43,252
|
|
|
47,275
|
|
|
14.2
|
%
|
|
12.0
|
%
|
|||
Corporate General and Administrative Expenses
(1)
|
|
|
|
|
|
|
|
|
|
|
|||||||
Operating Loss
|
|
|
|
(16,912
|
)
|
|
(17,827
|
)
|
|
|
|
|
|||||
Other Expense (Income)
|
|
|
|
74
|
|
|
(74
|
)
|
|
|
|
|
|||||
Depreciation and Amortization
|
|
|
|
85
|
|
|
162
|
|
|
|
|
|
|||||
Stock-Based Compensation Expense
|
|
|
|
3,007
|
|
|
3,495
|
|
|
|
|
|
|||||
|
|
|
|
(13,746
|
)
|
|
(14,244
|
)
|
|
|
|
|
|||||
Adjusted EBITDA
|
|
|
|
$
|
54,832
|
|
|
$
|
49,485
|
|
|
10.0
|
%
|
|
7.4
|
%
|
|
Capital Expenditures
|
|
|
|
|
|
|
|
|
|
|
|||||||
Structural Systems
|
|
|
|
$
|
15,661
|
|
|
$
|
11,559
|
|
|
|
|
|
|||
Electronic Systems
|
|
|
|
3,032
|
|
|
4,419
|
|
|
|
|
|
|||||
Corporate Administration
|
|
|
|
—
|
|
|
10
|
|
|
|
|
|
|||||
Total Capital Expenditures
|
|
|
|
$
|
18,693
|
|
|
$
|
15,988
|
|
|
|
|
|
(1)
|
Includes costs not allocated to either the Structural Systems or Electronic Systems operating segments.
|
(2)
|
Goodwill impairment related to Structural Systems operating segment.
|
(3)
|
2015 includes restructuring charges for severance and benefits and loss on early exit from leases of $0.8 million and $1.3 million recorded in the Electronic Systems and Structural Systems operating segments, respectively.
|
(4)
|
Insurance recoveries related to property and equipment included as other income.
|
(5)
|
Intangible asset impairment related to Electronic Systems operating segment.
|
•
|
$21.7 million decrease in military and space revenues mainly due to program delays and budget changes which impacted scheduled deliveries on our fixed-wing and helicopter platforms; and
|
•
|
$5.1 million decrease in commercial aerospace revenues mainly due to the wind down of a regional jet program and continued softness in the commercial helicopter end-use market.
|
•
|
$70.5 million decrease in our industrial revenues mainly due to the divestiture of our Pittsburgh operation in January 2016 and closure of our Houston operation in December 2015; and
|
•
|
$37.3 million decrease in our military and space revenue mainly due to the divestiture of our Miltec operation in March 2016 and program delays and budget changes, which impacted scheduled deliveries on our fixed-wing and helicopter platforms; partially offset by
|
•
|
$19.4 million increase in our commercial aerospace revenue mainly due to added content with existing customers.
|
|
|
|
|
(In thousands)
December 31,
|
||||||||
|
|
Change
|
|
2016
|
|
2015
|
||||||
Consolidated Ducommun
(1)
|
|
|
|
|
|
|
||||||
Military and space
|
|
|
|
|
|
|
||||||
Defense technologies
|
|
$
|
29,482
|
|
|
$
|
198,043
|
|
|
$
|
168,561
|
|
Defense structures
|
|
608
|
|
|
59,379
|
|
|
58,771
|
|
|||
Commercial aerospace
|
|
20,013
|
|
|
317,797
|
|
|
297,784
|
|
|||
Industrial
|
|
(24,199
|
)
|
|
25,036
|
|
|
49,235
|
|
|||
Total
|
|
$
|
25,904
|
|
|
$
|
600,255
|
|
|
$
|
574,351
|
|
Structural Systems
|
|
|
|
|
|
|
||||||
Military and space (defense structures)
|
|
$
|
608
|
|
|
$
|
59,379
|
|
|
$
|
58,771
|
|
Commercial aerospace
|
|
25,394
|
|
|
278,020
|
|
|
252,626
|
|
|||
Total
|
|
$
|
26,002
|
|
|
$
|
337,399
|
|
|
$
|
311,397
|
|
Electronic Systems
(1)
|
|
|
|
|
|
|
||||||
Military and space (defense technologies)
|
|
$
|
29,482
|
|
|
$
|
198,043
|
|
|
$
|
168,561
|
|
Commercial aerospace
|
|
(5,381
|
)
|
|
39,777
|
|
|
45,158
|
|
|||
Industrial
|
|
(24,199
|
)
|
|
25,036
|
|
|
49,235
|
|
|||
Total
|
|
$
|
(98
|
)
|
|
$
|
262,856
|
|
|
$
|
262,954
|
|
(1)
|
2015 backlog included an aggregate total of $16.1 million related to our Pittsburgh, Pennsylvania operation that was sold in January 2016 and our Miltec operation that was sold in March 2016.
|
|
|
(in thousands, except per share data)
Years Ended December 31,
|
||||||||||||
|
|
2015
|
|
%
of Net Sales 2015
|
|
2014
|
|
%
of Net Sales 2014
|
||||||
Net Revenues
|
|
$
|
666,011
|
|
|
100.0
|
%
|
|
$
|
742,045
|
|
|
100.0
|
%
|
Cost of Sales
|
|
565,219
|
|
|
84.9
|
%
|
|
601,713
|
|
|
81.1
|
%
|
||
Gross Profit
|
|
100,792
|
|
|
15.1
|
%
|
|
140,332
|
|
|
18.9
|
%
|
||
Selling, General and Administrative Expenses
|
|
85,921
|
|
|
12.9
|
%
|
|
88,565
|
|
|
11.9
|
%
|
||
Goodwill Impairment
|
|
57,243
|
|
|
8.6
|
%
|
|
—
|
|
|
—
|
%
|
||
Intangible Asset Impairment
|
|
32,937
|
|
|
4.9
|
%
|
|
—
|
|
|
—
|
%
|
||
Operating (Loss) Income
|
|
(75,309
|
)
|
|
(11.3
|
)%
|
|
51,767
|
|
|
7.0
|
%
|
||
Interest Expense
|
|
(18,709
|
)
|
|
(2.8
|
)%
|
|
(28,077
|
)
|
|
(3.8
|
)%
|
||
Loss on Extinguishment of Debt
|
|
(14,720
|
)
|
|
(2.2
|
)%
|
|
—
|
|
|
—
|
%
|
||
Other Income
|
|
$
|
2,148
|
|
|
0.3
|
%
|
|
$
|
2,550
|
|
|
0.3
|
%
|
(Loss) Income Before Taxes
|
|
(106,590
|
)
|
|
(16.0
|
)%
|
|
26,240
|
|
|
3.5
|
%
|
||
Income Tax (Benefit) Expense
|
|
(31,711
|
)
|
|
nm
|
|
|
6,373
|
|
|
nm
|
|
||
Net (Loss) Income
|
|
$
|
(74,879
|
)
|
|
(11.2
|
)%
|
|
$
|
19,867
|
|
|
2.7
|
%
|
|
|
|
|
|
|
|
|
|
||||||
Effective (Benefit) Tax Rate
|
|
(29.7
|
)%
|
|
nm
|
|
|
24.3
|
%
|
|
nm
|
|
||
Diluted (Loss) Earnings Per Share
|
|
$
|
(6.78
|
)
|
|
nm
|
|
|
$
|
1.79
|
|
|
nm
|
|
|
|
|
|
(In thousands)
Years Ended December 31,
|
|
% of Net Sales
|
||||||||||||
|
|
Change
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Consolidated Ducommun
|
|
|
|
|
|
|
|
|
|
|
||||||||
Military and space
|
|
|
|
|
|
|
|
|
|
|
||||||||
Defense technologies
|
|
$
|
(29,046
|
)
|
|
$
|
212,537
|
|
|
$
|
241,583
|
|
|
31.9
|
%
|
|
32.6
|
%
|
Defense structures
|
|
(49,204
|
)
|
|
75,094
|
|
|
124,298
|
|
|
11.3
|
%
|
|
16.7
|
%
|
|||
Commercial aerospace
|
|
7,158
|
|
|
249,301
|
|
|
242,143
|
|
|
37.4
|
%
|
|
32.6
|
%
|
|||
Industrial
|
|
(4,942
|
)
|
|
129,079
|
|
|
134,021
|
|
|
19.4
|
%
|
|
18.1
|
%
|
|||
Total
|
|
$
|
(76,034
|
)
|
|
$
|
666,011
|
|
|
$
|
742,045
|
|
|
100.0
|
%
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Structural Systems
|
|
|
|
|
|
|
|
|
|
|
||||||||
Military and space (defense structures)
|
|
$
|
(49,204
|
)
|
|
$
|
75,094
|
|
|
$
|
124,298
|
|
|
27.5
|
%
|
|
38.8
|
%
|
Commercial aerospace
|
|
2,567
|
|
|
198,225
|
|
|
195,658
|
|
|
72.5
|
%
|
|
61.2
|
%
|
|||
Total
|
|
$
|
(46,637
|
)
|
|
$
|
273,319
|
|
|
$
|
319,956
|
|
|
100.0
|
%
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Electronic Systems
|
|
|
|
|
|
|
|
|
|
|
||||||||
Military and space (defense technologies)
|
|
$
|
(29,046
|
)
|
|
$
|
212,537
|
|
|
$
|
241,583
|
|
|
54.1
|
%
|
|
57.2
|
%
|
Commercial aerospace
|
|
4,591
|
|
|
51,076
|
|
|
46,485
|
|
|
13.0
|
%
|
|
11.0
|
%
|
|||
Industrial
|
|
(4,942
|
)
|
|
129,079
|
|
|
134,021
|
|
|
32.9
|
%
|
|
31.8
|
%
|
|||
Total
|
|
$
|
(29,397
|
)
|
|
$
|
392,692
|
|
|
$
|
422,089
|
|
|
100.0
|
%
|
|
100.0
|
%
|
•
|
21.4% lower revenues in our military and space end-use markets mainly due to a decrease in U.S. government defense spending and shifting spending priorities, which impacted our fixed-wing and helicopter platforms and pushed out scheduled deliveries of these products to customers; and
|
•
|
3.7% lower revenues from Industrial end-use markets; partially offset by
|
•
|
3.0% increase in revenues in commercial aerospace end-use markets.
|
|
|
Years Ended December 31,
|
||||
|
|
2015
|
|
2014
|
||
Boeing Company
|
|
16.0
|
%
|
|
19.4
|
%
|
Raytheon Company
|
|
8.7
|
%
|
|
9.4
|
%
|
Spirit AeroSystems Holdings, Inc.
|
|
7.4
|
%
|
|
6.4
|
%
|
United Technologies Corporation
|
|
6.1
|
%
|
|
5.5
|
%
|
Top ten customers
(1)
|
|
55.7
|
%
|
|
59.2
|
%
|
|
|
%
|
|
(In thousands)
Years Ended December 31,
|
|
%
of Net Sales
|
|
%
of Net Sales
|
|||||||||
|
|
Change
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|||||||
Net Revenues
|
|
|
|
|
|
|
|
|
|
|
|||||||
Structural Systems
|
|
(14.6
|
)%
|
|
$
|
273,319
|
|
|
$
|
319,956
|
|
|
41.0
|
%
|
|
43.1
|
%
|
Electronic Systems
|
|
(7.0
|
)%
|
|
392,692
|
|
|
422,089
|
|
|
59.0
|
%
|
|
56.9
|
%
|
||
Total Net Revenues
|
|
(10.2
|
)%
|
|
$
|
666,011
|
|
|
$
|
742,045
|
|
|
100.0
|
%
|
|
100.0
|
%
|
Segment Operating (Loss) Income
|
|
|
|
|
|
|
|
|
|
|
|||||||
Structural Systems
|
|
|
|
$
|
(53,010
|
)
|
|
$
|
34,949
|
|
|
(19.4
|
)%
|
|
10.9
|
%
|
|
Electronic Systems
|
|
|
|
(4,472
|
)
|
|
34,599
|
|
|
(1.1
|
)%
|
|
8.2
|
%
|
|||
|
|
|
|
(57,482
|
)
|
|
69,548
|
|
|
|
|
|
|||||
Corporate General and Administrative Expenses
(1)
|
|
|
|
(17,827
|
)
|
|
(17,781
|
)
|
|
(2.7
|
)%
|
|
(2.4
|
)%
|
|||
Total Operating (Loss) Income
|
|
|
|
$
|
(75,309
|
)
|
|
$
|
51,767
|
|
|
(11.3
|
)%
|
|
7.0
|
%
|
|
Adjusted EBITDA
|
|
|
|
|
|
|
|
|
|
|
|||||||
Structural Systems
|
|
|
|
|
|
|
|
|
|
|
|||||||
Operating (Loss) Income
(2)(3)
|
|
|
|
$
|
(53,010
|
)
|
|
$
|
34,949
|
|
|
|
|
|
|||
Other Income
(4)
|
|
|
|
1,510
|
|
|
2,550
|
|
|
|
|
|
|||||
Depreciation and Amortization
|
|
|
|
9,417
|
|
|
10,959
|
|
|
|
|
|
|||||
Goodwill Impairment
|
|
|
|
57,243
|
|
|
—
|
|
|
|
|
|
|||||
Restructuring Charges
|
|
|
|
1,294
|
|
|
—
|
|
|
|
|
|
|||||
|
|
|
|
16,454
|
|
|
48,458
|
|
|
6.0
|
%
|
|
15.1
|
%
|
|||
Electronic Systems
|
|
|
|
|
|
|
|
|
|
|
|||||||
Operating (Loss) Income
(3)(5)
|
|
|
|
(4,472
|
)
|
|
34,599
|
|
|
|
|
|
|||||
Other Income
|
|
|
|
712
|
|
|
—
|
|
|
|
|
|
|||||
Depreciation and Amortization
|
|
|
|
17,267
|
|
|
17,928
|
|
|
|
|
|
|||||
Intangible Asset Impairment
|
|
|
|
32,937
|
|
|
—
|
|
|
|
|
|
|||||
Restructuring Charges
|
|
|
|
831
|
|
|
—
|
|
|
|
|
|
|||||
|
|
|
|
47,275
|
|
|
52,527
|
|
|
12.0
|
%
|
|
12.4
|
%
|
|||
Corporate General and Administrative Expenses
(1)
|
|
|
|
|
|
|
|
|
|
|
|||||||
Operating Loss
|
|
|
|
(17,827
|
)
|
|
(17,781
|
)
|
|
|
|
|
|||||
Other Expense
|
|
|
|
(74
|
)
|
|
—
|
|
|
|
|
|
|||||
Depreciation and Amortization
|
|
|
|
162
|
|
|
137
|
|
|
|
|
|
|||||
Stock-Based Compensation Expense
|
|
|
|
3,495
|
|
|
3,725
|
|
|
|
|
|
|||||
|
|
|
|
(14,244
|
)
|
|
(13,919
|
)
|
|
|
|
|
|||||
Adjusted EBITDA
|
|
|
|
$
|
49,485
|
|
|
$
|
87,066
|
|
|
7.4
|
%
|
|
11.7
|
%
|
|
Capital Expenditures
|
|
|
|
|
|
|
|
|
|
|
|||||||
Structural Systems
|
|
|
|
$
|
11,559
|
|
|
$
|
12,742
|
|
|
|
|
|
|||
Electronic Systems
|
|
|
|
4,419
|
|
|
5,782
|
|
|
|
|
|
|||||
Corporate Administration
|
|
|
|
10
|
|
|
30
|
|
|
|
|
|
|||||
Total Capital Expenditures
|
|
|
|
$
|
15,988
|
|
|
$
|
18,554
|
|
|
|
|
|
(1)
|
Includes costs not allocated to either the Structural Systems or Electronic Systems operating segments.
|
(2)
|
Goodwill impairment related to Structural Systems operating segment.
|
(3)
|
Includes restructuring charges for severance and benefits and loss on early exit from leases of $0.8 million and $1.3 million recorded in the Electronic Systems and Structural Systems operating segments, respectively.
|
(4)
|
Insurance recoveries related to property and equipment included as other income.
|
(5)
|
Intangible asset impairment related to Electronic Systems operating segment.
|
|
||||||||
|
|
(In millions)
December 31,
|
||||||
|
|
2016
|
|
2015
|
||||
Total debt, including long-term portion
|
|
$
|
170.0
|
|
|
$
|
245.0
|
|
Weighted-average interest rate on debt
|
|
3.25
|
%
|
|
3.07
|
%
|
||
Term Loan interest rate
|
|
3.31
|
%
|
|
3.07
|
%
|
||
Cash and cash equivalents
|
|
$
|
7.4
|
|
|
$
|
5.5
|
|
Unused Revolving Credit Facility
|
|
$
|
199.0
|
|
|
$
|
198.5
|
|
|
|
|
|
Payments Due by Period
|
||||||||||||||||
|
|
Total
|
|
Less Than
1 Year
|
|
1-3 Years
|
|
3-5 Years
|
|
More Than
5 Years
|
||||||||||
Long-term debt, including current portion
|
|
$
|
170,003
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
170,000
|
|
|
$
|
—
|
|
Future interest on notes payable and long-term debt
|
|
28,700
|
|
|
5,525
|
|
|
10,744
|
|
|
12,431
|
|
|
—
|
|
|||||
Operating leases
|
|
15,969
|
|
|
4,270
|
|
|
6,237
|
|
|
4,356
|
|
|
1,106
|
|
|||||
Pension liability
|
|
18,649
|
|
|
1,608
|
|
|
3,445
|
|
|
3,655
|
|
|
9,941
|
|
|||||
Total
(1)
|
|
$
|
233,321
|
|
|
$
|
11,406
|
|
|
$
|
20,426
|
|
|
$
|
190,442
|
|
|
$
|
11,047
|
|
(1)
|
As of December 31, 2016, we recorded $3.0 million in long-term liabilities related to uncertain tax positions. We are not able to reasonably estimate the timing of the long-term payments, or the amount by which our liability may increase or decrease over time, therefore, the liability or uncertain tax positions has not been included in the contractual obligations table.
|
•
|
We did not design and maintain effective monitoring controls over the accuracy and appropriate classification of reported labor hours associated with contracts accounted for under the percentage-of-completion method using units of delivery. Specifically, we did not maintain proper monitoring controls over the accuracy and appropriate classification of underlying direct and indirect labor hour data which were used in our estimates to identify and record contract forward loss reserves.
|
|
|
Number of Securities
to be Issued Upon
Exercise of
Outstanding
Options,
Warrants and Rights
(a)
|
|
Weighted-Average
Exercise Price of
Outstanding
Options,
Warrants and Rights
(b)
|
|
Number of Securities
Remaining
Available for
Future Issuance
Under Equity
Compensation Plans
(Excluding Securities
Reflected
in Column
(a)(c)(2)
|
||||
Equity Compensation Plans
|
|
|
|
|
|
|
||||
Approved by security holders
(1)
|
|
754,569
|
|
|
$
|
20.07
|
|
|
398,589
|
|
Not approved by security holders
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Total
|
|
754,569
|
|
|
|
|
398,589
|
|
(1)
|
The number of securities to be issued consists of
439,550
for stock options,
193,382
for restricted stock units and
121,637
for performance stock units at target. The weighted average exercise price applies only to the stock options.
|
(2)
|
Awards are not restricted to any specified form or structure and may include, without limitation, sales or bonuses of stock, restricted stock, stock options, reload stock options, stock purchase warrants, other rights to acquire stock, securities convertible into or redeemable for stock, stock appreciation rights, limited stock appreciation rights, phantom stock, dividend equivalents, performance units or performance shares, and an award may consist of one such security or benefit, or two or more of them in tandem or in alternative.
|
(a)
|
1.
Financial Statements
|
|
|
|
|
||
|
The following consolidated financial statements of Ducommun Incorporated and subsidiaries, are incorporated by reference in Item 8 of this report.
|
||
|
|
|
|
|
|
Page
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
2.
Financial Statement Schedule
|
|
|
|
|
|
|
|
The following schedule for the years ended December 31, 2016, 2015 and 2014 is filed herewith:
|
|
|
|
|
|
|
|
Schedule II - Valuation and Qualifying Accounts
|
—
|
|
|
|
|
|
|
All other schedules have been omitted because they are not applicable, not required, or the information has been otherwise supplied in the financial statements or notes thereto.
|
|
|
|
|
|
|
|
3.
Exhibits
|
|
|
|
|
||
See Item 15(b) for a list of exhibits.
|
—
|
|
ITEM 16. FORM 10-K SUMMARY
|
—
|
|
Signatures
|
—
|
|
|
|
December 31,
|
||||||
|
|
2016
|
|
2015
|
||||
Assets
|
|
|
|
|
||||
Current Assets
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
7,432
|
|
|
$
|
5,454
|
|
Accounts receivable (less allowance for doubtful accounts of $495 and $359 at December 31, 2016 and 2015, respectively)
|
|
76,239
|
|
|
77,089
|
|
||
Inventories
|
|
119,896
|
|
|
115,404
|
|
||
Production cost of contracts
|
|
11,340
|
|
|
10,290
|
|
||
Other current assets
|
|
11,034
|
|
|
13,389
|
|
||
Assets held for sale
|
|
—
|
|
|
41,636
|
|
||
Total Current Assets
|
|
225,941
|
|
|
263,262
|
|
||
Property and Equipment, Net
|
|
101,590
|
|
|
96,551
|
|
||
Goodwill
|
|
82,554
|
|
|
82,554
|
|
||
Intangibles, Net
|
|
101,573
|
|
|
110,621
|
|
||
Non-Current Deferred Income Taxes
|
|
286
|
|
|
324
|
|
||
Other Assets
|
|
3,485
|
|
|
3,769
|
|
||
Total Assets
|
|
$
|
515,429
|
|
|
$
|
557,081
|
|
Liabilities and Shareholders’ Equity
|
|
|
|
|
||||
Current Liabilities
|
|
|
|
|
||||
Current portion of long-term debt
|
|
$
|
3
|
|
|
$
|
26
|
|
Accounts payable
|
|
57,024
|
|
|
40,343
|
|
||
Accrued liabilities
|
|
29,279
|
|
|
36,458
|
|
||
Liabilities held for sale
|
|
—
|
|
|
6,780
|
|
||
Total Current Liabilities
|
|
86,306
|
|
|
83,607
|
|
||
Long-Term Debt, Less Current Portion
|
|
166,896
|
|
|
240,661
|
|
||
Non-Current Deferred Income Taxes
|
|
31,417
|
|
|
28,125
|
|
||
Other Long-Term Liabilities
|
|
18,707
|
|
|
18,954
|
|
||
Total Liabilities
|
|
303,326
|
|
|
371,347
|
|
||
Commitments and Contingencies (Notes 13, 16)
|
|
|
|
|
||||
Shareholders’ Equity
|
|
|
|
|
||||
Common stock - $0.01 par value; 35,000,000 shares authorized; 11,193,813 and 11,084,318 shares issued and outstanding at December 31, 2016 and 2015, respectively
|
|
112
|
|
|
111
|
|
||
Additional paid-in capital
|
|
76,783
|
|
|
75,200
|
|
||
Retained earnings
|
|
141,287
|
|
|
116,026
|
|
||
Accumulated other comprehensive loss
|
|
(6,079
|
)
|
|
(5,603
|
)
|
||
Total Shareholders’ Equity
|
|
212,103
|
|
|
185,734
|
|
||
Total Liabilities and Shareholders’ Equity
|
|
$
|
515,429
|
|
|
$
|
557,081
|
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
Net Revenues
|
|
$
|
550,642
|
|
|
$
|
666,011
|
|
|
$
|
742,045
|
|
Cost of Sales
|
|
444,449
|
|
|
565,219
|
|
|
601,713
|
|
|||
Gross Profit
|
|
106,193
|
|
|
100,792
|
|
|
140,332
|
|
|||
Selling, General and Administrative Expenses
|
|
77,625
|
|
|
85,921
|
|
|
88,565
|
|
|||
Goodwill Impairment
|
|
—
|
|
|
57,243
|
|
|
—
|
|
|||
Intangible Asset Impairment
|
|
—
|
|
|
32,937
|
|
|
—
|
|
|||
Operating Income (Loss)
|
|
28,568
|
|
|
(75,309
|
)
|
|
51,767
|
|
|||
Interest Expense
|
|
(8,274
|
)
|
|
(18,709
|
)
|
|
(28,077
|
)
|
|||
Gain on Divestitures, Net
|
|
17,604
|
|
|
—
|
|
|
—
|
|
|||
Loss on Extinguishment of Debt
|
|
—
|
|
|
(14,720
|
)
|
|
—
|
|
|||
Other Income, Net
|
|
215
|
|
|
2,148
|
|
|
2,550
|
|
|||
Income (Loss) Before Taxes
|
|
38,113
|
|
|
(106,590
|
)
|
|
26,240
|
|
|||
Income Tax Expense (Benefit)
|
|
12,852
|
|
|
(31,711
|
)
|
|
6,373
|
|
|||
Net Income (Loss)
|
|
$
|
25,261
|
|
|
$
|
(74,879
|
)
|
|
$
|
19,867
|
|
Earnings (Loss) Per Share
|
|
|
|
|
|
|
||||||
Basic earnings (loss) per share
|
|
$
|
2.27
|
|
|
$
|
(6.78
|
)
|
|
$
|
1.82
|
|
Diluted earnings (loss) per share
|
|
$
|
2.24
|
|
|
$
|
(6.78
|
)
|
|
$
|
1.79
|
|
Weighted-Average Number of Shares Outstanding
|
|
|
|
|
|
|
||||||
Basic
|
|
11,151
|
|
|
11,047
|
|
|
10,897
|
|
|||
Diluted
|
|
11,299
|
|
|
11,047
|
|
|
11,126
|
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
Net Income (Loss)
|
|
$
|
25,261
|
|
|
$
|
(74,879
|
)
|
|
$
|
19,867
|
|
Other comprehensive (loss) income, net of tax:
|
|
|
|
|
|
|
||||||
Pension Adjustments:
|
|
|
|
|
|
|
||||||
Amortization of actuarial loss included in net income, net of tax benefit of $283, $330, and $156 for 2016, 2015, and 2014, respectively
|
|
479
|
|
|
557
|
|
|
263
|
|
|||
Actuarial (loss) gain arising during the period, net of tax (benefit) expense of $(413), $300, and $(1,810) for 2016, 2015, and 2014, respectively
|
|
(650
|
)
|
|
491
|
|
|
(3,052
|
)
|
|||
Decrease in net unrealized gains and losses on cash flow hedges, net of tax benefit of $180, $0, and $0 for 2016, 2015, and 2014, respectively
|
|
(305
|
)
|
|
—
|
|
|
—
|
|
|||
Other Comprehensive (Loss) Income, Net of Tax
|
|
(476
|
)
|
|
1,048
|
|
|
(2,789
|
)
|
|||
Comprehensive Income (Loss), Net of Tax
|
|
$
|
24,785
|
|
|
$
|
(73,831
|
)
|
|
$
|
17,078
|
|
|
|
Shares
Outstanding
|
|
Common
Stock
|
|
Treasury
Stock
|
|
Additional
Paid-In
Capital
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Total
Shareholders’
Equity
|
|||||||||||||
Balance at December 31, 2013
|
|
10,816,754
|
|
|
$
|
110
|
|
|
$
|
(1,924
|
)
|
|
$
|
68,909
|
|
|
$
|
171,038
|
|
|
$
|
(3,862
|
)
|
|
$
|
234,271
|
|
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
19,867
|
|
|
—
|
|
|
19,867
|
|
||||||
Other comprehensive loss, net of tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,789
|
)
|
|
(2,789
|
)
|
||||||
Stock options exercised
|
|
117,149
|
|
|
1
|
|
|
—
|
|
|
2,275
|
|
|
—
|
|
|
—
|
|
|
2,276
|
|
||||||
Stock repurchased related to the exercise of stock options
|
|
(34,597
|
)
|
|
(1
|
)
|
|
—
|
|
|
(919
|
)
|
|
—
|
|
|
—
|
|
|
(920
|
)
|
||||||
Stock awards vested
|
|
52,962
|
|
|
1
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Stock-based compensation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,725
|
|
|
—
|
|
|
—
|
|
|
3,725
|
|
||||||
Excess tax benefits from share-based compensation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
140
|
|
|
—
|
|
|
—
|
|
|
140
|
|
||||||
Retirement of treasury stock
|
|
—
|
|
|
(1
|
)
|
|
1,924
|
|
|
(1,923
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Balance at December 31, 2014
|
|
10,952,268
|
|
|
$
|
110
|
|
|
$
|
—
|
|
|
$
|
72,206
|
|
|
$
|
190,905
|
|
|
$
|
(6,651
|
)
|
|
$
|
256,570
|
|
Net loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(74,879
|
)
|
|
—
|
|
|
(74,879
|
)
|
||||||
Other comprehensive income, net of tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,048
|
|
|
1,048
|
|
||||||
Stock options exercised
|
|
167,523
|
|
|
1
|
|
|
—
|
|
|
3,083
|
|
|
—
|
|
|
—
|
|
|
3,084
|
|
||||||
Stock repurchased related to the exercise of stock options
|
|
(137,194
|
)
|
|
(1
|
)
|
|
—
|
|
|
(4,209
|
)
|
|
—
|
|
|
—
|
|
|
(4,210
|
)
|
||||||
Stock awards vested
|
|
101,721
|
|
|
1
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Stock-based compensation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,495
|
|
|
—
|
|
|
—
|
|
|
3,495
|
|
||||||
Excess tax benefits from share-based compensation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
626
|
|
|
—
|
|
|
—
|
|
|
626
|
|
||||||
Balance at December 31, 2015
|
|
11,084,318
|
|
|
$
|
111
|
|
|
$
|
—
|
|
|
$
|
75,200
|
|
|
$
|
116,026
|
|
|
$
|
(5,603
|
)
|
|
$
|
185,734
|
|
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
25,261
|
|
|
—
|
|
|
25,261
|
|
||||||
Other comprehensive income, net of tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(476
|
)
|
|
(476
|
)
|
||||||
Stock options exercised
|
|
132,325
|
|
|
1
|
|
|
—
|
|
|
2,121
|
|
|
—
|
|
|
—
|
|
|
2,122
|
|
||||||
Stock repurchased related to the exercise of stock options
|
|
(151,916
|
)
|
|
(1
|
)
|
|
—
|
|
|
(3,464
|
)
|
|
—
|
|
|
—
|
|
|
(3,465
|
)
|
||||||
Stock awards vested
|
|
129,086
|
|
|
1
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Stock-based compensation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,007
|
|
|
—
|
|
|
—
|
|
|
3,007
|
|
||||||
Tax shortfall from share-based compensation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(80
|
)
|
|
—
|
|
|
—
|
|
|
(80
|
)
|
||||||
Balance at December 31, 2016
|
|
11,193,813
|
|
|
$
|
112
|
|
|
$
|
—
|
|
|
$
|
76,783
|
|
|
$
|
141,287
|
|
|
$
|
(6,079
|
)
|
|
$
|
212,103
|
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
Cash Flows from Operating Activities
|
|
|
|
|
|
|
||||||
Net Income (Loss)
|
|
$
|
25,261
|
|
|
$
|
(74,879
|
)
|
|
$
|
19,867
|
|
Adjustments to Reconcile Net Income (Loss) to
|
|
|
|
|
|
|
||||||
Net Cash Provided by Operating Activities:
|
|
|
|
|
|
|
||||||
Depreciation and amortization
|
|
22,860
|
|
|
26,846
|
|
|
29,024
|
|
|||
Gain on divestitures, net
|
|
(17,604
|
)
|
|
—
|
|
|
—
|
|
|||
Goodwill impairment
|
|
—
|
|
|
57,243
|
|
|
—
|
|
|||
Intangible asset impairment
|
|
—
|
|
|
32,937
|
|
|
—
|
|
|||
Stock-based compensation expense
|
|
3,007
|
|
|
3,495
|
|
|
3,725
|
|
|||
Deferred income taxes
|
|
3,519
|
|
|
(29,110
|
)
|
|
345
|
|
|||
Excess tax benefits from stock-based compensation
|
|
(248
|
)
|
|
(626
|
)
|
|
(140
|
)
|
|||
Provision for (recovery of) doubtful accounts
|
|
112
|
|
|
132
|
|
|
(237
|
)
|
|||
Noncash loss on extinguishment of debt
|
|
—
|
|
|
4,970
|
|
|
—
|
|
|||
Other
|
|
(7,204
|
)
|
|
5,628
|
|
|
(5,713
|
)
|
|||
Changes in Assets and Liabilities:
|
|
|
|
|
|
|
||||||
Accounts receivable
|
|
3,220
|
|
|
4,444
|
|
|
1,086
|
|
|||
Inventories
|
|
(5,182
|
)
|
|
20,985
|
|
|
(2,335
|
)
|
|||
Production cost of contracts
|
|
(1,536
|
)
|
|
330
|
|
|
(3,513
|
)
|
|||
Other assets
|
|
2,974
|
|
|
5,884
|
|
|
4,800
|
|
|||
Accounts payable
|
|
15,055
|
|
|
(13,978
|
)
|
|
410
|
|
|||
Accrued and other liabilities
|
|
(966
|
)
|
|
(20,623
|
)
|
|
6,103
|
|
|||
Net Cash Provided by Operating Activities
|
|
43,268
|
|
|
23,678
|
|
|
53,422
|
|
|||
Cash Flows from Investing Activities
|
|
|
|
|
|
|
||||||
Purchases of property and equipment
|
|
(17,001
|
)
|
|
(15,891
|
)
|
|
(18,096
|
)
|
|||
Proceeds from sale of assets
|
|
16
|
|
|
904
|
|
|
91
|
|
|||
Insurance recoveries related to property and equipment
|
|
—
|
|
|
1,510
|
|
|
2,550
|
|
|||
Proceeds from divestitures
|
|
51,893
|
|
|
—
|
|
|
—
|
|
|||
Net Cash Provided by (Used in) Investing Activities
|
|
34,908
|
|
|
(13,477
|
)
|
|
(15,455
|
)
|
|||
Cash Flows from Financing Activities
|
|
|
|
|
|
|
||||||
Borrowings from senior secured revolving credit facility
|
|
71,800
|
|
|
65,000
|
|
|
—
|
|
|||
Repayment of senior secured revolving credit facility
|
|
(71,800
|
)
|
|
(65,000
|
)
|
|
(42,650
|
)
|
|||
Borrowings from term loan
|
|
—
|
|
|
275,000
|
|
|
—
|
|
|||
Repayments of senior unsecured notes and term loans
|
|
(75,000
|
)
|
|
(320,000
|
)
|
|
—
|
|
|||
Repayments of other debt
|
|
(23
|
)
|
|
(26
|
)
|
|
—
|
|
|||
Debt issuance costs
|
|
—
|
|
|
(4,848
|
)
|
|
—
|
|
|||
Excess tax benefits from stock-based compensation
|
|
248
|
|
|
626
|
|
|
140
|
|
|||
Net (cash paid) proceeds from issuance of common stock under stock plans
|
|
(1,423
|
)
|
|
(1,126
|
)
|
|
1,356
|
|
|||
Net Cash Used in Financing Activities
|
|
(76,198
|
)
|
|
(50,374
|
)
|
|
(41,154
|
)
|
|||
Net Increase (Decrease) in Cash and Cash Equivalents
|
|
1,978
|
|
|
(40,173
|
)
|
|
(3,187
|
)
|
|||
Cash and Cash Equivalents at Beginning of Year
|
|
5,454
|
|
|
45,627
|
|
|
48,814
|
|
|||
Cash and Cash Equivalents at End of Year
|
|
$
|
7,432
|
|
|
$
|
5,454
|
|
|
$
|
45,627
|
|
Supplemental Disclosures of Cash Flow Information
|
|
|
|
|
|
|
||||||
Interest paid
|
|
$
|
6,877
|
|
|
$
|
26,501
|
|
|
$
|
25,105
|
|
Taxes paid
|
|
$
|
9,778
|
|
|
$
|
1,150
|
|
|
$
|
3,476
|
|
Non-cash activities:
|
|
|
|
|
|
|
||||||
Purchases of property and equipment not yet paid
|
|
$
|
3,241
|
|
|
$
|
1,549
|
|
|
$
|
1,458
|
|
|
|
(In thousands, except per share data)
Years Ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
Net income (loss)
|
|
$
|
25,261
|
|
|
$
|
(74,879
|
)
|
|
$
|
19,867
|
|
Weighted-average number of common shares outstanding
|
|
|
|
|
|
|
||||||
Basic weighted-average common shares outstanding
|
|
11,151
|
|
|
11,047
|
|
|
10,897
|
|
|||
Dilutive potential common shares
|
|
148
|
|
|
—
|
|
|
229
|
|
|||
Diluted weighted-average common shares outstanding
|
|
11,299
|
|
|
11,047
|
|
|
11,126
|
|
|||
Earnings (loss) per share
|
|
|
|
|
|
|
||||||
Basic
|
|
$
|
2.27
|
|
|
$
|
(6.78
|
)
|
|
$
|
1.82
|
|
Diluted
|
|
$
|
2.24
|
|
|
$
|
(6.78
|
)
|
|
$
|
1.79
|
|
|
|
(In thousands)
Years Ended December 31,
|
|||||||
|
|
2016
|
|
2015
|
|
2014
|
|||
Stock options and stock units
|
|
553
|
|
|
778
|
|
|
218
|
|
|
|
December 31, 2015
|
|
2016
|
|
December 31, 2016
|
||||||||||||||
|
|
Balance
|
|
Charges
|
|
Cash Payments
|
|
Change in Estimates
|
|
Balance
|
||||||||||
Severance and benefits
|
|
$
|
722
|
|
|
$
|
49
|
|
|
$
|
(779
|
)
|
|
$
|
8
|
|
|
$
|
—
|
|
Lease termination
|
|
1,181
|
|
|
133
|
|
|
(674
|
)
|
|
14
|
|
|
654
|
|
|||||
Ending balance
|
|
$
|
1,903
|
|
|
$
|
182
|
|
|
$
|
(1,453
|
)
|
|
$
|
22
|
|
|
$
|
654
|
|
|
|
As of December 31, 2016
|
|
As of December 31, 2015
|
||||||||||||||||||||||||||||
|
|
Fair Value Measurements Using
|
|
|
|
Fair Value Measurements Using
|
|
|
||||||||||||||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total Balance
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total Balance
|
||||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Money market funds
(1)
|
|
$
|
3,751
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,751
|
|
|
$
|
4,587
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,587
|
|
Interest rate cap hedges
(2)
|
|
—
|
|
|
553
|
|
|
—
|
|
|
553
|
|
|
—
|
|
|
963
|
|
|
—
|
|
|
963
|
|
||||||||
Total Assets
|
|
$
|
3,751
|
|
|
$
|
553
|
|
|
$
|
—
|
|
|
$
|
4,304
|
|
|
$
|
4,587
|
|
|
$
|
963
|
|
|
$
|
—
|
|
|
$
|
5,550
|
|
|
|
(In thousands)
December 31,
|
||||||
|
|
2016
|
|
2015
|
||||
Raw materials and supplies
|
|
$
|
64,650
|
|
|
$
|
61,840
|
|
Work in process
|
|
56,806
|
|
|
49,299
|
|
||
Finished goods
|
|
9,180
|
|
|
10,073
|
|
||
|
|
130,636
|
|
|
121,212
|
|
||
Less progress payments
|
|
10,740
|
|
|
5,808
|
|
||
Total
|
|
$
|
119,896
|
|
|
$
|
115,404
|
|
|
|
(In thousands)
December 31,
|
|
Range of
Estimated
|
||||||
|
|
2016
|
|
2015
|
|
Useful Lives
|
||||
Land
|
|
$
|
15,662
|
|
|
$
|
15,454
|
|
|
|
Buildings and improvements
|
|
49,870
|
|
|
44,313
|
|
|
5 - 40 Years
|
||
Machinery and equipment
|
|
137,555
|
|
|
127,934
|
|
|
2 - 20 Years
|
||
Furniture and equipment
|
|
21,749
|
|
|
24,187
|
|
|
2 - 10 Years
|
||
Construction in progress
|
|
12,238
|
|
|
13,196
|
|
|
|
||
|
|
237,074
|
|
|
225,084
|
|
|
|
||
Less accumulated depreciation
|
|
135,484
|
|
|
128,533
|
|
|
|
||
Total
|
|
$
|
101,590
|
|
|
$
|
96,551
|
|
|
|
|
|
(In thousands)
|
||||||||||
|
|
Structural
Systems
|
|
Electronic
Systems
|
|
Consolidated
Ducommun
|
||||||
Gross goodwill
|
|
$
|
57,243
|
|
|
$
|
182,048
|
|
|
$
|
239,291
|
|
Accumulated goodwill impairment
|
|
(57,243
|
)
|
|
(81,722
|
)
|
|
(138,965
|
)
|
|||
Transfer to assets held for sale
|
|
—
|
|
|
(17,772
|
)
|
|
(17,772
|
)
|
|||
Balance at December 31, 2015
|
|
$
|
—
|
|
|
$
|
82,554
|
|
|
$
|
82,554
|
|
Balance at December 31, 2016
|
|
$
|
—
|
|
|
$
|
82,554
|
|
|
$
|
82,554
|
|
|
|
|
(In thousands)
|
||||||||||||||||||||||
|
|
|
December 31, 2016
|
|
December 31, 2015
|
||||||||||||||||||||
|
Wtd. Avg Life (Yrs)
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
||||||||||||
Finite-lived assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Customer relationships
|
18
|
|
$
|
159,200
|
|
|
$
|
58,352
|
|
|
$
|
100,848
|
|
|
$
|
159,200
|
|
|
$
|
49,463
|
|
|
$
|
109,737
|
|
Contract renewal
|
14
|
|
1,845
|
|
|
1,362
|
|
|
483
|
|
|
1,845
|
|
|
1,230
|
|
|
615
|
|
||||||
Technology
|
15
|
|
400
|
|
|
158
|
|
|
242
|
|
|
400
|
|
|
131
|
|
|
269
|
|
||||||
Total
|
|
|
$
|
161,445
|
|
|
$
|
59,872
|
|
|
$
|
101,573
|
|
|
$
|
161,445
|
|
|
$
|
50,824
|
|
|
$
|
110,621
|
|
|
|
(In thousands)
|
||||||||||||||||||||||
|
|
December 31, 2016
|
|
December 31, 2015
|
||||||||||||||||||||
|
|
Gross
|
|
Accumulated
Amortization
|
|
Net
Carrying
Value
|
|
Gross
|
|
Accumulated
Amortization
|
|
Net
Carrying
Value
|
||||||||||||
Other intangible assets
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Structural Systems
|
|
$
|
19,300
|
|
|
$
|
15,555
|
|
|
$
|
3,745
|
|
|
$
|
19,300
|
|
|
$
|
14,433
|
|
|
$
|
4,867
|
|
Electronic Systems
|
|
142,145
|
|
|
44,317
|
|
|
97,828
|
|
|
142,145
|
|
|
36,391
|
|
|
105,754
|
|
||||||
Total
|
|
$
|
161,445
|
|
|
$
|
59,872
|
|
|
$
|
101,573
|
|
|
$
|
161,445
|
|
|
$
|
50,824
|
|
|
$
|
110,621
|
|
|
|
(In thousands)
|
||||||||||
|
|
Structural
Systems
|
|
Electronic
Systems
|
|
Consolidated
Ducommun
|
||||||
2017
|
|
$
|
907
|
|
|
$
|
7,927
|
|
|
$
|
8,834
|
|
2018
|
|
737
|
|
|
7,927
|
|
|
8,664
|
|
|||
2019
|
|
591
|
|
|
7,926
|
|
|
8,517
|
|
|||
2020
|
|
490
|
|
|
7,883
|
|
|
8,373
|
|
|||
2021
|
|
381
|
|
|
7,794
|
|
|
8,175
|
|
|||
Thereafter
|
|
639
|
|
|
58,371
|
|
|
59,010
|
|
|||
|
|
$
|
3,745
|
|
|
$
|
97,828
|
|
|
$
|
101,573
|
|
|
|
(In thousands)
December 31,
|
||||||
|
|
2016
|
|
2015
|
||||
Accrued compensation
|
|
$
|
15,455
|
|
|
$
|
13,521
|
|
Accrued income tax and sales tax
|
|
332
|
|
|
1,513
|
|
||
Customer deposits
|
|
3,204
|
|
|
1,758
|
|
||
Interest payable
|
|
273
|
|
|
58
|
|
||
Provision for forward loss reserves
|
|
4,780
|
|
|
11,925
|
|
||
Other
|
|
5,235
|
|
|
7,683
|
|
||
Total
|
|
$
|
29,279
|
|
|
$
|
36,458
|
|
|
|
(In thousands)
December 31,
|
||||||
|
|
2016
|
|
2015
|
||||
Term loan
|
|
$
|
170,000
|
|
|
$
|
245,000
|
|
Other debt (fixed 5.41%)
|
|
3
|
|
|
26
|
|
||
Total debt
|
|
170,003
|
|
|
245,026
|
|
||
Less current portion
|
|
3
|
|
|
26
|
|
||
Total long-term debt
|
|
170,000
|
|
|
245,000
|
|
||
Less debt issuance costs
|
|
3,104
|
|
|
4,339
|
|
||
Total long-term debt, net of debt issuance costs
|
|
$
|
166,896
|
|
|
$
|
240,661
|
|
Weighted-average interest rate
|
|
3.25
|
%
|
|
3.07
|
%
|
|
(In thousands)
|
||
2017
|
$
|
3
|
|
2018
|
—
|
|
|
2019
|
—
|
|
|
2020
|
170,000
|
|
|
2021
|
—
|
|
|
Total
|
$
|
170,003
|
|
|
|
Number
of Stock Options
|
|
Weighted-
Average
Exercise
Price Per Share
|
|
Weighted-Average Remaining Contractual Life (Years)
|
|
Aggregate Intrinsic Value (in thousands)
|
|||||
Outstanding at January 1, 2016
|
|
483,491
|
|
|
$
|
20.08
|
|
|
|
|
|
||
Granted
|
|
123,500
|
|
|
$
|
15.92
|
|
|
|
|
|
||
Exercised
|
|
(132,325
|
)
|
|
$
|
16.04
|
|
|
|
|
|
||
Expired
|
|
(19,516
|
)
|
|
$
|
22.66
|
|
|
|
|
|
||
Forfeited
|
|
(15,600
|
)
|
|
$
|
18.54
|
|
|
|
|
|
||
Outstanding at December 31, 2016
|
|
439,550
|
|
|
$
|
20.07
|
|
|
4.4
|
|
$
|
2,414
|
|
Exerciseable at December 31, 2016
|
|
214,375
|
|
|
$
|
20.24
|
|
|
3.3
|
|
$
|
1,141
|
|
|
|
Number of Stock Options
|
|
Weighted-
Average
Grant
Date Fair Value
|
|||
Nonvested at January 1, 2016
|
|
231,600
|
|
|
$
|
10.03
|
|
Granted
|
|
123,500
|
|
|
$
|
6.53
|
|
Vested
|
|
(114,325
|
)
|
|
$
|
7.95
|
|
Forfeited
|
|
(15,600
|
)
|
|
$
|
8.08
|
|
Nonvested at December 31, 2016
|
|
225,175
|
|
|
$
|
8.77
|
|
|
|
Years Ended December 31,
|
|||||||
|
|
2016
|
|
2015
|
|
2014
|
|||
Risk-free interest rate
|
|
1.20
|
%
|
|
1.13
|
%
|
|
1.67
|
%
|
Expected volatility
|
|
51.79
|
%
|
|
53.72
|
%
|
|
55.27
|
%
|
Expected dividends
|
|
—
|
|
|
—
|
|
|
—
|
|
Expected term (in months)
|
|
48
|
|
|
47
|
|
|
66
|
|
|
|
Number of Restricted Stock Units
|
|
Weighted-
Average
Grant
Date Fair Value
|
|||
Outstanding at January 1, 2016
|
|
155,191
|
|
|
$
|
24.24
|
|
Granted
|
|
139,450
|
|
|
15.97
|
|
|
Vested
|
|
(84,107
|
)
|
|
23.34
|
|
|
Forfeited
|
|
(17,152
|
)
|
|
21.76
|
|
|
Outstanding at December 31, 2016
|
|
193,382
|
|
|
$
|
18.88
|
|
|
|
Number of Performance Stock Units
|
|
Weighted-
Average
Grant
Date Fair Value
|
|||
Outstanding at January 1, 2016
|
|
133,497
|
|
|
$
|
22.86
|
|
Granted
|
|
62,500
|
|
|
15.92
|
|
|
Vested
|
|
(44,979
|
)
|
|
18.36
|
|
|
Forfeited
|
|
(29,381
|
)
|
|
25.22
|
|
|
Outstanding at December 31, 2016
|
|
121,637
|
|
|
$
|
20.39
|
|
(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)
December 31,
|
||||||
|
|
2016
|
|
2015
|
||||
Change in benefit obligation
(1)
|
|
|
|
|
||||
Beginning benefit obligation (January 1)
|
|
$
|
31,510
|
|
|
$
|
33,299
|
|
Service cost
|
|
531
|
|
|
785
|
|
||
Interest cost
|
|
1,367
|
|
|
1,350
|
|
||
Actuarial loss (gain)
|
|
1,132
|
|
|
(2,599
|
)
|
||
Benefits paid
|
|
(1,386
|
)
|
|
(1,325
|
)
|
||
Ending benefit obligation (December 31)
|
|
$
|
33,154
|
|
|
$
|
31,510
|
|
Change in plan assets
|
|
|
|
|
||||
Beginning fair value of plan assets (January 1)
|
|
$
|
19,933
|
|
|
$
|
19,725
|
|
Return on assets
|
|
1,551
|
|
|
(296
|
)
|
||
Employer contribution
|
|
1,917
|
|
|
1,829
|
|
||
Benefits paid
|
|
(1,386
|
)
|
|
(1,325
|
)
|
||
Ending fair value of plan assets (December 31)
|
|
$
|
22,015
|
|
|
$
|
19,933
|
|
Funded status (underfunded)
|
|
$
|
(11,139
|
)
|
|
$
|
(11,577
|
)
|
Amounts recognized in the consolidated balance sheet
|
|
|
|
|
||||
Current liabilities
|
|
$
|
545
|
|
|
$
|
527
|
|
Non-current liabilities
|
|
$
|
10,595
|
|
|
$
|
11,050
|
|
Unrecognized loss included in accumulated other comprehensive loss
|
|
|
|
|
||||
Beginning unrecognized loss, before tax (January 1)
|
|
$
|
8,919
|
|
|
$
|
10,614
|
|
Amortization
|
|
(762
|
)
|
|
(887
|
)
|
||
Liability (gain) loss
|
|
1,132
|
|
|
(2,599
|
)
|
||
Asset (loss) gain
|
|
(69
|
)
|
|
1,791
|
|
||
Ending unrecognized loss, before tax (December 31)
|
|
9,220
|
|
|
8,919
|
|
||
Tax impact
|
|
(3,425
|
)
|
|
(3,316
|
)
|
||
Unrecognized loss included in accumulated other comprehensive loss, net of tax
|
|
$
|
5,795
|
|
|
$
|
5,603
|
|
(1)
|
Projected benefit obligation equals the accumulated benefit obligation for the plans.
|
|
|
December 31,
|
||||
|
|
2016
|
|
2015
|
||
Equity securities
|
|
65
|
%
|
|
74
|
%
|
Cash and equivalents
|
|
2
|
%
|
|
6
|
%
|
Debt securities
|
|
33
|
%
|
|
20
|
%
|
Total
(1)
|
|
100
|
%
|
|
100
|
%
|
(1)
|
Our overall investment strategy is to achieve an asset allocation within the following ranges to achieve an appropriate rate of return relative to risk.
|
Cash
|
0-5%
|
Fixed income securities
|
0-25%
|
Equities
|
25-95%
|
|
|
(In thousands)
Year Ended December 31, 2016
|
||||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Cash and cash equivalents
|
|
$
|
366
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
366
|
|
Fixed income securities
|
|
3,468
|
|
|
—
|
|
|
—
|
|
|
3,468
|
|
||||
Equities
(1)
|
|
1,611
|
|
|
—
|
|
|
—
|
|
|
1,611
|
|
||||
Other investments
|
|
760
|
|
|
—
|
|
|
—
|
|
|
760
|
|
||||
Total plan assets at fair value
|
|
$
|
6,205
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
6,205
|
|
|
Pooled funds
|
|
|
|
|
|
|
|
15,810
|
|
|||||||
Total fair value of plan assets
|
|
|
|
|
|
|
|
|
|
|
$
|
22,015
|
|
|
|
(In thousands)
Year Ended December 31, 2015
|
||||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Cash and cash equivalents
|
|
$
|
1,149
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,149
|
|
Fixed income securities
|
|
3,986
|
|
|
—
|
|
|
—
|
|
|
3,986
|
|
||||
Equities
(1)
|
|
9,468
|
|
|
—
|
|
|
—
|
|
|
9,468
|
|
||||
Other investments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total plan assets at fair value
|
|
$
|
14,603
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
14,603
|
|
|
Pooled funds
|
|
|
|
|
|
|
|
5,330
|
|
|||||||
Total fair value of plan assets
|
|
|
|
|
|
|
|
|
|
|
$
|
19,933
|
|
(1)
|
Represents mutual funds and commingled accounts which invest primarily in equities, but may also hold fixed income securities, cash and other investments. Commingled funds with publicly quoted prices and actively traded are classified as Level 1 investments.
|
|
|
Years Ended December 31,
|
|||||||
|
|
2016
|
|
2015
|
|
2014
|
|||
Discount rate used to determine pension expense
|
|
|
|
|
|
|
|||
Pension Plan
|
|
4.55
|
%
|
|
4.25
|
%
|
|
4.75
|
%
|
LaBarge Retirement Plan
|
|
4.00
|
%
|
|
3.70
|
%
|
|
4.00
|
%
|
|
|
December 31,
|
|||||||
|
|
2016
|
|
2015
|
|
2014
|
|||
Discount rate used to determine value of obligations
|
|
|
|
|
|
|
|||
Pension Plan
|
|
4.18
|
%
|
|
4.55
|
%
|
|
4.25
|
%
|
LaBarge Retirement Plan
|
|
3.75
|
%
|
|
4.00
|
%
|
|
3.70
|
%
|
Long-term rate of return - Pension Plan only
|
|
7.00
|
%
|
|
7.50
|
%
|
|
7.50
|
%
|
|
|
(In thousands)
|
||||||
|
|
Pension Plan
|
|
LaBarge
Retirement
Plan
|
||||
2017
|
|
$
|
1,063
|
|
|
$
|
545
|
|
2018
|
|
1,174
|
|
|
535
|
|
||
2019
|
|
1,215
|
|
|
521
|
|
||
2020
|
|
1,297
|
|
|
504
|
|
||
2021
|
|
1,369
|
|
|
485
|
|
||
2022 - 2026
|
|
7,862
|
|
|
2,079
|
|
|
(In thousands)
|
||
2017
|
$
|
4,270
|
|
2018
|
3,505
|
|
|
2019
|
2,732
|
|
|
2020
|
2,492
|
|
|
2021
|
1,864
|
|
|
Thereafter
|
1,106
|
|
|
Total
|
$
|
15,969
|
|
|
|
(In thousands)
Years Ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
Current tax expense (benefit)
|
|
|
|
|
|
|
||||||
Federal
|
|
$
|
5,953
|
|
|
$
|
(1,511
|
)
|
|
$
|
5,258
|
|
State
|
|
2,982
|
|
|
(418
|
)
|
|
244
|
|
|||
|
|
8,935
|
|
|
(1,929
|
)
|
|
5,502
|
|
|||
Deferred tax expense (benefit)
|
|
|
|
|
|
|
||||||
Federal
|
|
3,876
|
|
|
(28,011
|
)
|
|
1,186
|
|
|||
State
|
|
41
|
|
|
(1,771
|
)
|
|
(315
|
)
|
|||
|
|
3,917
|
|
|
(29,782
|
)
|
|
871
|
|
|||
Income tax expense (benefit)
|
|
$
|
12,852
|
|
|
$
|
(31,711
|
)
|
|
$
|
6,373
|
|
|
|
Years Ended December 31,
|
||||
|
|
2016
|
|
2015
|
|
2014
|
Statutory federal income tax (benefit) rate
|
|
35.0%
|
|
(35.0)%
|
|
35.0%
|
State income taxes (net of federal benefit)
|
|
5.7
|
|
(1.2)
|
|
0.9
|
Qualified domestic production activities
|
|
(2.0)
|
|
0.5
|
|
(2.3)
|
Research and development tax credits
|
|
(8.6)
|
|
(2.9)
|
|
(11.3)
|
Goodwill impairment
|
|
—
|
|
8.1
|
|
—
|
Changes in valuation allowance
|
|
0.9
|
|
0.6
|
|
8.5
|
Non-deductible book expenses
|
|
0.2
|
|
0.2
|
|
0.9
|
Changes in deferred tax assets
|
|
1.5
|
|
0.1
|
|
(5.0)
|
Remeasurement of deferred taxes for changes in state tax law
|
|
—
|
|
—
|
|
(1.9)
|
Changes in tax reserves
|
|
—
|
|
0.1
|
|
(0.7)
|
Other
|
|
1.0
|
|
(0.2)
|
|
0.2
|
Effective income tax (benefit) rate
|
|
33.7%
|
|
(29.7)%
|
|
24.3%
|
|
|
Years Ended December 31,
|
|||||||
|
|
2016
|
|
2015
|
|
2014
|
|||
Boeing
|
|
17.3
|
%
|
|
16.0
|
%
|
|
19.4
|
%
|
Raytheon
|
|
8.4
|
%
|
|
8.7
|
%
|
|
9.4
|
%
|
Spirit
|
|
8.2
|
%
|
|
7.4
|
%
|
|
6.4
|
%
|
United Technologies
|
|
6.0
|
%
|
|
6.1
|
%
|
|
5.5
|
%
|
Top ten customers
(1)
|
|
58.6
|
%
|
|
55.7
|
%
|
|
59.2
|
%
|
|
|
(In thousands)
Years Ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
Net Revenues
|
|
|
|
|
|
|
||||||
Structural Systems
|
|
$
|
246,465
|
|
|
$
|
273,319
|
|
|
$
|
319,956
|
|
Electronic Systems
|
|
304,177
|
|
|
392,692
|
|
|
422,089
|
|
|||
Total Net Revenues
|
|
$
|
550,642
|
|
|
$
|
666,011
|
|
|
$
|
742,045
|
|
Segment Operating (Loss) Income
(1)
|
|
|
|
|
|
|
||||||
Structural Systems
(2)
|
|
$
|
16,497
|
|
|
$
|
(53,010
|
)
|
|
$
|
34,949
|
|
Electronic Systems
(3)
|
|
28,983
|
|
|
(4,472
|
)
|
|
34,599
|
|
|||
|
|
45,480
|
|
|
(57,482
|
)
|
|
69,548
|
|
|||
Corporate General and Administrative Expenses
(1)(4)
|
|
(16,912
|
)
|
|
(17,827
|
)
|
|
(17,781
|
)
|
|||
Operating (Loss) Income
|
|
$
|
28,568
|
|
|
$
|
(75,309
|
)
|
|
$
|
51,767
|
|
Depreciation and Amortization Expenses
|
|
|
|
|
|
|
||||||
Structural Systems
|
|
$
|
8,688
|
|
|
$
|
9,417
|
|
|
$
|
10,959
|
|
Electronic Systems
|
|
14,087
|
|
|
17,267
|
|
|
17,928
|
|
|||
Corporate Administration
|
|
85
|
|
|
162
|
|
|
137
|
|
|||
Total Depreciation and Amortization Expenses
|
|
$
|
22,860
|
|
|
$
|
26,846
|
|
|
$
|
29,024
|
|
Capital Expenditures
|
|
|
|
|
|
|
||||||
Structural Systems
|
|
$
|
15,661
|
|
|
$
|
11,559
|
|
|
$
|
12,742
|
|
Electronic Systems
|
|
3,032
|
|
|
4,419
|
|
|
5,782
|
|
|||
Corporate Administration
|
|
—
|
|
|
10
|
|
|
30
|
|
|||
Total Capital Expenditures
|
|
$
|
18,693
|
|
|
$
|
15,988
|
|
|
$
|
18,554
|
|
(1)
|
Includes cost not allocated to either the Structural Systems or Electronic Systems operating segments.
|
(2)
|
The results for 2015 included
$57.2 million
of goodwill impairment charge.
|
(3)
|
The results for 2015 included
$32.9 million
of an intangible asset impairment charge.
|
(4)
|
The results for 2014 included
$1.2 million
of workers’ compensation insurance expenses included in gross profit and not allocated to the operating segments.
|
|
|
(In thousands)
December 31,
|
||||||
|
|
2016
|
|
2015
|
||||
Total Assets
|
|
|
|
|
||||
Structural Systems
|
|
$
|
175,580
|
|
|
$
|
179,134
|
|
Electronic Systems
|
|
325,780
|
|
|
363,227
|
|
||
Corporate Administration
|
|
14,069
|
|
|
14,720
|
|
||
Total Assets
|
|
$
|
515,429
|
|
|
$
|
557,081
|
|
Goodwill and Intangibles
|
|
|
|
|
||||
Structural Systems
|
|
$
|
3,745
|
|
|
$
|
4,866
|
|
Electronic Systems
|
|
180,382
|
|
|
207,595
|
|
||
Total Goodwill and Intangibles
|
|
$
|
184,127
|
|
|
$
|
212,461
|
|
|
|
(In thousands, except per share amounts)
|
||||||||||||||||||||||||||||||
|
|
Three Months Ended
2016
|
|
Three Months Ended
2015
|
||||||||||||||||||||||||||||
|
|
Dec 31
|
|
Oct 1
|
|
Jul 2
|
|
Apr 2
|
|
Dec 31
|
|
Oct 3
|
|
Jul 4
|
|
Apr 4
|
||||||||||||||||
Net Revenues
|
|
$
|
142,486
|
|
|
$
|
132,571
|
|
|
$
|
133,437
|
|
|
$
|
142,148
|
|
|
$
|
156,576
|
|
|
$
|
161,670
|
|
|
$
|
174,845
|
|
|
$
|
172,920
|
|
Gross Profit
|
|
27,786
|
|
|
25,223
|
|
|
26,215
|
|
|
26,969
|
|
|
22,796
|
|
|
20,028
|
|
|
31,207
|
|
|
26,761
|
|
||||||||
Income (Loss) Before Taxes
|
|
5,825
|
|
|
6,248
|
|
|
5,331
|
|
|
20,709
|
|
|
(90,170
|
)
|
|
(16,447
|
)
|
|
3,061
|
|
|
(3,034
|
)
|
||||||||
Income Tax Expense (Benefit)
|
|
2,989
|
|
|
1,234
|
|
|
1,470
|
|
|
7,159
|
|
|
(24,997
|
)
|
|
(6,932
|
)
|
|
1,279
|
|
|
(1,061
|
)
|
||||||||
Net Income (Loss)
|
|
$
|
2,836
|
|
|
$
|
5,014
|
|
|
$
|
3,861
|
|
|
$
|
13,550
|
|
|
$
|
(65,173
|
)
|
|
$
|
(9,515
|
)
|
|
$
|
1,782
|
|
|
$
|
(1,973
|
)
|
Earnings (Loss) Per Share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Basic earnings (loss) per share
|
|
$
|
0.25
|
|
|
$
|
0.45
|
|
|
$
|
0.35
|
|
|
$
|
1.22
|
|
|
$
|
(5.88
|
)
|
|
$
|
(0.86
|
)
|
|
$
|
0.16
|
|
|
$
|
(0.18
|
)
|
Diluted earnings (loss) per share
|
|
$
|
0.25
|
|
|
$
|
0.44
|
|
|
$
|
0.34
|
|
|
$
|
1.21
|
|
|
$
|
(5.88
|
)
|
|
$
|
(0.86
|
)
|
|
$
|
0.16
|
|
|
$
|
(0.18
|
)
|
Description
|
|
Balance at
Beginning
of Period
|
|
Charged to
Costs and
Expenses (1)
|
|
Deductions
|
|
Balance at End
of Period
|
||||||||
2016
|
|
|
|
|
|
|
|
|
||||||||
Allowance for Doubtful Accounts
|
|
$
|
359
|
|
|
$
|
233
|
|
|
$
|
97
|
|
|
$
|
495
|
|
Valuation Allowance on Deferred Tax Assets
|
|
7,477
|
|
|
(870
|
)
|
|
—
|
|
|
6,607
|
|
||||
2015
|
|
|
|
|
|
|
|
|
||||||||
Allowance for Doubtful Accounts
(1)
|
|
$
|
252
|
|
|
$
|
235
|
|
|
$
|
128
|
|
|
$
|
359
|
|
Valuation Allowance on Deferred Tax Assets
|
|
6,882
|
|
|
595
|
|
|
—
|
|
|
7,477
|
|
||||
2014
|
|
|
|
|
|
|
|
|
||||||||
Allowance for Doubtful Accounts
|
|
$
|
489
|
|
|
$
|
166
|
|
|
$
|
403
|
|
|
$
|
252
|
|
Valuation Allowance on Deferred Tax Assets
|
|
4,650
|
|
|
2,232
|
|
|
—
|
|
|
6,882
|
|
(1)
|
Included amount that was part of assets held for sale.
|
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.
|
2.2
|
Stock Purchase Agreement dated January 22, 2016, by and among Ducommun Incorporated, Ducommun LaBarge Technologies, Inc., as Seller, LaBarge Electronics, Inc., and Intervala, LLC, as Buyer. Incorporated by reference to Exhibit 2.1 to Form 8-K dated January 25, 2016.
|
2.3
|
Stock Purchase Agreement dated February 24, 2016, by and between Ducommun LaBarge Technologies, Inc., as Seller, and General Atomics, as Buyer. Incorporated by reference to Exhibit 2.1 to Form 8-K dated February 24, 2016.
|
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 to Bylaws dated January 5, 2017. Incorporated by reference to Exhibit 99.2 to Form 8-K dated January 9, 2017.
|
10.1
|
Credit Agreement, dated as of June 29, 2015, among Ducommun Incorporated, certain of its subsidiaries, Bank of America, N.A., as administrative agent, swingline lender and issuing bank, and other lenders party thereto. Incorporated by reference to Exhibit 10.1 to Form 8-K dated June 29, 2015.
|
*10.2
|
2007 Stock Incentive Plan. Incorporated by reference to Appendix B of Definitive Proxy Statement on Schedule 14a, filed on March 29, 2010.
|
*10.3
|
2013 Stock Incentive Plan (Amended and Restated March 18, 2015). Incorporated by reference to Appendix B of Definitive Proxy Statement on Schedule 14a, filed on April 22, 2015.
|
*10.4
|
Form of Stock Option Agreement for 2016 and earlier. Incorporated by reference to Exhibit 10.8 to Form 10-K for the year ended December 31, 2003.
|
*10.5
|
Form of Stock Option Agreement for 2017 and after.
|
*10.6
|
Form of Performance Stock Unit Agreement for 2014 and 2015. Incorporated by reference to Exhibit 10.19 to Form 8-K dated April 28, 2014.
|
*10.7
|
Form of Performance Stock Unit Agreement for 2016. Incorporated by reference to Exhibit 10.6 to Form 10-Q for the period ended April 2, 2016.
|
*10.8
|
Form of Restricted Stock Unit Agreement for 2016 and earlier. Incorporated by reference to Exhibit 99.1 to Form 8-K dated May 10, 2010.
|
*10.9
|
Form of Restricted Stock Unit Agreement for 2017 and after.
|
*10.10
|
Form of Directors’ Restricted Stock Unit Agreement. Incorporated by reference to Exhibit 99.1 to Form 8-K dated May 10, 2010.
|
*10.11
|
Performance Restricted Stock Unit Agreement dated January 23, 2017 between Ducommun Incorporated and Stephen G. Oswald.
|
*10.12
|
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
|
|
|
Gregory S. Churchill
|
|
March 19, 2013
|
|
|
Robert C. Ducommun
|
|
December 31, 1985
|
|
|
Dean M. Flatt
|
|
November 5, 2009
|
|
|
Douglas L. Groves
|
|
February 12, 2013
|
|
|
Jay L. Haberland
|
|
February 2, 2009
|
|
|
James S. Heiser
|
|
May 6, 1987
|
|
|
Stephen G. Oswald
|
|
January 23, 2017
|
|
|
Amy M. Paul
|
|
January 23, 2017
|
|
|
Robert D. Paulson
|
|
March 25, 2003
|
|
|
Anthony J. Reardon
|
|
January 8, 2008
|
|
|
Jerry L. Redondo
|
|
October 1, 2015
|
|
|
Rosalie F. Rogers
|
|
July 24, 2008
|
|
|
Christopher D. Wampler
|
|
January 1, 2016
|
|
*10.13
|
Ducommun Incorporated 2016 Bonus Plan. Incorporated by reference to Exhibit 99.3 to Form 8-K dated March 1, 2016.
|
*10.14
|
Ducommun Incorporated 2017 Bonus Plan. Incorporated by reference to Exhibit 99.1 to Form 8-K dated February 27, 2017.
|
*10.15
|
Directors’ Deferred Compensation and Retirement Plan, as amended and restated February 2, 2010. Incorporated by reference to Exhibit 10.15 to Form 10-K for the year ended December 31, 2009.
|
*10.16
|
Key Executive Severance Agreement between Ducommun Incorporated and Stephen G. Oswald dated January 23, 2017. Incorporated by reference to Exhibit 99.1 to Form 8-K dated January 27, 2017.
|
*10.17
|
Form of Key Executive Severance Agreement between Ducommun Incorporated and each of the individuals listed below. Incorporated by reference to Exhibit 99.2 to Form 8-K dated January 27, 2017. All of the Key Executive Severance Agreements are identical except for the name of the person and the address for notice:
|
|
Person
|
|
Date of Agreement
|
|
|
Kathryn M. Andrus
|
|
January 23, 2017
|
|
|
Douglas L. Groves
|
|
January 23, 2017
|
|
|
James S. Heiser
|
|
January 23, 2017
|
|
|
Amy M. Paul
|
|
January 23, 2017
|
|
|
Anthony J. Reardon
|
|
January 23, 2017
|
|
|
Jerry L. Redondo
|
|
January 23, 2017
|
|
|
Rosalie F. Rogers
|
|
January 23, 2017
|
|
|
Christopher D. Wampler
|
|
January 23, 2017
|
|
*10.18
|
Employment Letter Agreement dated January 3, 2017 between Ducommun Incorporated and Stephen G. Oswald. Incorporated by reference to Exhibit 99.1 to Form 8-K dated January 9, 2017.
|
*10.19
|
Employment Letter Agreement dated December 19, 2016 between Ducommun Incorporated and Amy M. Paul.
|
*10.20
|
Transition Services Letter Agreement dated January 10, 2017 between Ducommun Incorporated and James S. Heiser. Incorporated by reference to Exhibit 99.1 to Form 8-K dated January 16, 2017.
|
21
|
Subsidiaries of the registrant.
|
23
|
Consent of Independent Registered Public Accounting Firm.
|
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
|
|
|
|
DUCOMMUN INCORPORATED
|
|
|
|
|
Date: March 6, 2017
|
By:
|
|
/s/ Stephen G. Oswald
|
|
|
|
Stephen G. Oswald
|
|
|
|
President and Chief Executive Officer
|
Signature
|
|
|
Title
|
|
|
|
|
/s/ Stephen G. Oswald
|
|
|
President and Chief Executive Officer
|
Stephen G. Oswald
|
|
|
(Principal Executive Officer)
|
|
|
|
|
/s/ Douglas L. Groves
|
|
|
Vice President, Chief Financial Officer and Treasurer
|
Douglas L. Groves
|
|
|
(Principal Financial Officer)
|
|
|
|
|
/s/ Christopher D. Wampler
|
|
|
Vice President, Controller and Chief Accounting Officer
|
Christopher D. Wampler
|
|
|
(Principal Accounting Officer)
|
|
|
|
|
/s/ Anthony J. Reardon
|
|
|
Chairman of the Board
|
Anthony J. Reardon
|
|
|
|
|
|
|
|
/s/ Richard A. Baldridge
|
|
|
Director
|
Richard A. Baldridge
|
|
|
|
|
|
|
|
/s/ Joseph C. Berenato
|
|
|
Director
|
Joseph C. Berenato
|
|
|
|
|
|
|
|
/s/ Gregory S. Churchill
|
|
|
Director
|
Gregory S. Churchill
|
|
|
|
|
|
|
|
/s/ Robert C. Ducommun
|
|
|
Director
|
Robert C. Ducommun
|
|
|
|
|
|
|
|
/s/ Dean M. Flatt
|
|
|
Director
|
Dean M. Flatt
|
|
|
|
|
|
|
|
/s/ Jay L. Haberland
|
|
|
Director
|
Jay L. Haberland
|
|
|
|
|
|
|
|
/s/ Robert D. Paulson
|
|
|
Director
|
Robert D. Paulson
|
|
|
|
23301 Wilmington Avenue
Carson, CA 90745-6209
310.513.7200
www.ducommun.com
|
|
|
1.
|
Commencement
|
2.
|
Salary
|
•
|
Stock options for 6,000 shares, with an exercise price equal to the closing price on the NYSE of Ducommun stock on the date of grant, which will vest in equal annual increments over a period of four years,
|
•
|
Restricted stock units for 4,500 shares, which will vest in equal annual increments over three years, and
|
•
|
Performance stock units for 6,000 shares, which will vest based on performance measures over a performance period (anticipated to be the three year period 2017-2019) established by the Committee.
|
•
|
Medical, dental, vision, disability and life insurance,
|
•
|
401(k) plan participation and Company matching contribution (currently the matching contribution is 50% of the first 6% of salary deferred, subject to IRS limits), subject to a 90-day waiting period,
|
•
|
Monthly auto allowance in accordance with Company policy, currently $1,427 per month, and
|
•
|
Four (4) weeks paid vacation per year in accordance with Company policy.
|
By:
|
/s/ Rose F. Rogers
|
|
|
Rose F. Rogers
Vice President and
Chief Human Resource Officer
|
|
By:
|
/s/ Amy M. Paul
|
|
|
Amy Paul
|
|
Date:
|
January 3, 2017
|
|
Name of Subsidiary
|
|
Jurisdiction of Incorporation
|
CMP Display Systems, Inc.
|
|
California
|
Composite Structures, LLC
|
|
Delaware
|
Ducommun AeroStructures, Inc.
|
|
Delaware
|
Ducommun AeroStructures Mexico, LLC
|
|
Delaware
|
Ducommun AeroStructures New York, Inc.
|
|
New York
|
Ducommun (England) Ltd.
|
|
England
|
Ducommun LaBarge Technologies, Inc.
|
|
Arizona
|
Ducommun LaBarge Technologies, Inc.
|
|
Delaware
|
Ducommun Technologies (Thailand) Ltd.
|
|
Thailand
|
LaBarge/STC, Inc.
|
|
Texas
|
LaBarge Acquisition Company, Inc.
|
|
Missouri
|
/s/ PricewaterhouseCoopers LLP
|
Los Angeles, California
|
March 6, 2017
|
1.
|
I have reviewed this Annual Report of Ducommun Incorporated (the “registrant”) on Form 10-K for the period ended
December 31, 2016
;
|
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/ Stephen G. Oswald
|
Stephen G. Oswald
|
President and Chief Executive Officer
|
1.
|
I have reviewed this Annual Report of Ducommun Incorporated (the “registrant”) on Form 10-K for the period ended
December 31, 2016
;
|
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/ Douglas L. Groves
|
Douglas L. Groves
|
Vice President, Chief Financial Officer and Treasurer
|
|
|
|
|
|
By:
|
|
/s/ Stephen G. Oswald
|
|
|
|
Stephen G. Oswald
|
|
|
|
President and Chief Executive Officer
|
|
|
|
March 6, 2017
|
|
|
|
|
|
By:
|
|
/s/ Douglas L. Groves
|
|
|
|
Douglas L. Groves
|
|
|
|
Vice President, Chief Financial Officer and Treasurer
|
|
|
|
March 6, 2017
|