|
Delaware
|
001-08174
|
|
95-0693330
|
(State or other jurisdiction
of incorporation)
|
(Commission
File Number)
|
|
(IRS Employer
Identification No.)
|
|
|
|
|
|
200 Sandpointe Avenue, Suite 700, Santa Ana, California
|
|
92707-5759
|
|
(Address of principal executive offices)
|
|
(Zip Code)
|
|
¨
|
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
|
|
¨
|
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
|
|
¨
|
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
|
|
¨
|
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
|
|
|
|
Emerging growth company
|
|
¨
|
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the
|
|
|
Exchange Act.
|
|
¨
|
Title of each class
|
|
Trading Symbol(s)
|
|
Name of each exchange on which registered
|
Common Stock, $.01 par value per share
|
|
DCO
|
|
New York Stock Exchange
|
|
Item 2.02
|
Results of Operations and Financial Condition.
|
Item 9.01
|
Financial Statements and Exhibits.
|
(d) Exhibits
|
|
Exhibit No.
|
Exhibit Title or Description
|
|
|
DUCOMMUN INCORPORATED
(Registrant)
|
|
Date: May 6, 2019
|
|
By:
|
/s/ Douglas L. Groves
|
|
|
|
Douglas L. Groves
|
|
|
|
Vice President, Chief Financial Officer and Treasurer
|
•
|
Revenue increased
14.7%
to
$172.6 million
|
•
|
Net income of
$7.5 million
, or
$0.64
per diluted share
|
•
|
Gross margin increased
290
basis points year-over-year to
20.7%
|
•
|
Operating margin increased
390
basis points year-over-year to
7.4%
|
•
|
Adjusted EBITDA increased
49.7%
to
$21.7 million
|
•
|
$13.1 million higher revenue in the Company’s military and space end-use markets due to increased shipments on various missile platforms; and
|
•
|
$11.9 million higher revenue in the Company’s commercial aerospace end-use markets due to additional content and increased build rates on large aircraft platforms; partially offset by
|
•
|
$2.9 million lower revenue in the Company’s industrial end-use markets.
|
•
|
$8.5 million higher revenue within the Company’s military and space end-use markets due to increased shipments on various missile platforms; partially offset by
|
•
|
$3.8 million lower revenue within the Company’s commercial aerospace end-use markets due to timing of shipments which unfavorably impacted large aircraft platforms; and
|
•
|
$2.9 million lower revenue within the Company's industrial end-use markets.
|
•
|
$15.7 million higher revenue within the Company’s commercial aerospace end-use markets due to additional content and higher build rates on large aircraft platforms; and
|
•
|
$4.6 million higher revenue within the Company’s military and space end-use markets due to increased shipments on military rotary-wing aircraft platforms.
|
Douglas L. Groves, Vice President, Chief Financial Officer and Treasurer, 657.335.3665
|
||||||
Chris Witty, Investor Relations, 646.438.9385,
cwitty@darrowir.com
|
|
|
March 30,
2019 |
|
December 31,
2018 |
||||
Assets
|
|
|
|
|
||||
Current Assets
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
3,727
|
|
|
$
|
10,263
|
|
Accounts receivable, net
|
|
63,134
|
|
|
67,819
|
|
||
Contract assets
|
|
93,306
|
|
|
86,665
|
|
||
Inventories
|
|
103,994
|
|
|
101,125
|
|
||
Production cost of contracts
|
|
11,008
|
|
|
11,679
|
|
||
Other current assets
|
|
7,003
|
|
|
6,531
|
|
||
Total Current Assets
|
|
282,172
|
|
|
284,082
|
|
||
Property and equipment, Net
|
|
108,839
|
|
|
107,045
|
|
||
Operating lease right-of-use assets
|
|
18,398
|
|
|
—
|
|
||
Goodwill
|
|
136,057
|
|
|
136,057
|
|
||
Intangibles, net
|
|
109,387
|
|
|
112,092
|
|
||
Non-current deferred income taxes
|
|
313
|
|
|
308
|
|
||
Other assets
|
|
5,543
|
|
|
5,155
|
|
||
Total Assets
|
|
$
|
660,709
|
|
|
$
|
644,739
|
|
Liabilities and Shareholders’ Equity
|
|
|
|
|
||||
Current Liabilities
|
|
|
|
|
||||
Accounts payable
|
|
$
|
68,785
|
|
|
$
|
69,274
|
|
Contract liabilities
|
|
15,030
|
|
|
17,145
|
|
||
Accrued and other liabilities
|
|
28,986
|
|
|
37,786
|
|
||
Operating lease liabilities
|
|
2,536
|
|
|
—
|
|
||
Current portion of long-term debt
|
|
2,330
|
|
|
2,330
|
|
||
Total Current Liabilities
|
|
117,667
|
|
|
126,535
|
|
||
Long-term debt
|
|
229,125
|
|
|
228,868
|
|
||
Non-current operating lease liabilities
|
|
17,499
|
|
|
—
|
|
||
Non-current deferred income taxes
|
|
18,211
|
|
|
18,070
|
|
||
Other long-term liabilities
|
|
14,429
|
|
|
14,441
|
|
||
Total Liabilities
|
|
396,931
|
|
|
387,914
|
|
||
Commitments and contingencies
|
|
|
|
|
||||
Shareholders’ Equity
|
|
|
|
|
||||
Common stock
|
|
115
|
|
|
114
|
|
||
Additional paid-in capital
|
|
83,370
|
|
|
83,712
|
|
||
Retained earnings
|
|
187,564
|
|
|
180,356
|
|
||
Accumulated other comprehensive loss
|
|
(7,271
|
)
|
|
(7,357
|
)
|
||
Total Shareholders’ Equity
|
|
263,778
|
|
|
256,825
|
|
||
Total Liabilities and Shareholders’ Equity
|
|
$
|
660,709
|
|
|
$
|
644,739
|
|
|
|
Three Months Ended
|
||||||
|
|
March 30,
2019 |
|
March 31,
2018 |
||||
Net Revenues
|
|
$
|
172,566
|
|
|
$
|
150,455
|
|
Cost of Sales
|
|
136,872
|
|
|
123,700
|
|
||
Gross Profit
|
|
35,694
|
|
|
26,755
|
|
||
Selling, General and Administrative Expenses
|
|
22,846
|
|
|
19,326
|
|
||
Restructuring Charges
|
|
—
|
|
|
2,173
|
|
||
Operating Income
|
|
12,848
|
|
|
5,256
|
|
||
Interest Expense
|
|
(4,351
|
)
|
|
(2,899
|
)
|
||
Income Before Taxes
|
|
8,497
|
|
|
2,357
|
|
||
Income Tax Expense (Benefit)
|
|
1,025
|
|
|
(243
|
)
|
||
Net Income
|
|
$
|
7,472
|
|
|
$
|
2,600
|
|
Earnings Per Share
|
|
|
|
|
||||
Basic earnings per share
|
|
$
|
0.65
|
|
|
$
|
0.23
|
|
Diluted earnings per share
|
|
$
|
0.64
|
|
|
$
|
0.22
|
|
Weighted-Average Number of Common Shares Outstanding
|
|
|
|
|
||||
Basic
|
|
11,434
|
|
|
11,346
|
|
||
Diluted
|
|
11,755
|
|
|
11,613
|
|
||
|
|
|
|
|
||||
Gross Profit %
|
|
20.7
|
%
|
|
17.8
|
%
|
||
SG&A %
|
|
13.3
|
%
|
|
12.8
|
%
|
||
Operating Income %
|
|
7.4
|
%
|
|
3.5
|
%
|
||
Net Income %
|
|
4.3
|
%
|
|
1.7
|
%
|
||
Effective Tax (Benefit) Rate
|
|
12.1
|
%
|
|
(10.3
|
)%
|
|
|
Three Months Ended
|
|||||||||||||||
|
|
%
Change
|
|
March 30,
2019 |
|
March 31,
2018 |
|
%
of Net Revenues
2019
|
|
%
of Net Revenues
2018
|
|||||||
Net Revenues
|
|
|
|
|
|
|
|
|
|
|
|||||||
Electronic Systems
|
|
2.2
|
%
|
|
$
|
84,197
|
|
|
$
|
82,409
|
|
|
48.8
|
%
|
|
54.8
|
%
|
Structural Systems
|
|
29.9
|
%
|
|
88,369
|
|
|
68,046
|
|
|
51.2
|
%
|
|
45.2
|
%
|
||
Total Net Revenues
|
|
14.7
|
%
|
|
$
|
172,566
|
|
|
$
|
150,455
|
|
|
100.0
|
%
|
|
100.0
|
%
|
Segment Operating Income
|
|
|
|
|
|
|
|
|
|
|
|||||||
Electronic Systems
|
|
|
|
$
|
9,181
|
|
|
$
|
5,744
|
|
|
10.9
|
%
|
|
7.0
|
%
|
|
Structural Systems
|
|
|
|
10,549
|
|
|
4,391
|
|
|
11.9
|
%
|
|
6.5
|
%
|
|||
|
|
|
|
19,730
|
|
|
10,135
|
|
|
|
|
|
|||||
Corporate General and Administrative Expenses
(1)
|
|
|
|
(6,882
|
)
|
|
(4,879
|
)
|
|
(4.0
|
)%
|
|
(3.2
|
)%
|
|||
Total Operating Income
|
|
|
|
$
|
12,848
|
|
|
$
|
5,256
|
|
|
7.4
|
%
|
|
3.5
|
%
|
|
Adjusted EBITDA
|
|
|
|
|
|
|
|
|
|
|
|||||||
Electronic Systems
|
|
|
|
|
|
|
|
|
|
|
|||||||
Operating Income
|
|
|
|
$
|
9,181
|
|
|
$
|
5,744
|
|
|
|
|
|
|||
Depreciation and Amortization
|
|
|
|
3,844
|
|
|
3,632
|
|
|
|
|
|
|||||
Restructuring Charges
|
|
|
|
—
|
|
|
520
|
|
|
|
|
|
|||||
|
|
|
|
13,025
|
|
|
9,896
|
|
|
15.5
|
%
|
|
12.0
|
%
|
|||
Structural Systems
|
|
|
|
|
|
|
|
|
|
|
|||||||
Operating Income
|
|
|
|
10,549
|
|
|
4,391
|
|
|
|
|
|
|||||
Depreciation and Amortization
|
|
|
|
3,250
|
|
|
2,316
|
|
|
|
|
|
|||||
Restructuring Charges
|
|
|
|
—
|
|
|
1,526
|
|
|
|
|
|
|||||
|
|
|
|
13,799
|
|
|
8,233
|
|
|
15.6
|
%
|
|
12.1
|
%
|
|||
Corporate General and Administrative Expenses
(1)
|
|
|
|
|
|
|
|
|
|
|
|||||||
Operating loss
|
|
|
|
(6,882
|
)
|
|
(4,879
|
)
|
|
|
|
|
|||||
Depreciation and Amortization
|
|
|
|
294
|
|
|
33
|
|
|
|
|
|
|||||
Stock-Based Compensation Expense
|
|
|
|
1,464
|
|
|
1,090
|
|
|
|
|
|
|||||
Restructuring Charges
|
|
|
|
—
|
|
|
127
|
|
|
|
|
|
|||||
|
|
|
|
(5,124
|
)
|
|
(3,629
|
)
|
|
|
|
|
|||||
Adjusted EBITDA
|
|
|
|
$
|
21,700
|
|
|
$
|
14,500
|
|
|
12.6
|
%
|
|
9.6
|
%
|
|
Capital Expenditures
|
|
|
|
|
|
|
|
|
|
|
|||||||
Electronic Systems
|
|
|
|
$
|
836
|
|
|
$
|
2,734
|
|
|
|
|
|
|||
Structural Systems
|
|
|
|
3,689
|
|
|
1,529
|
|
|
|
|
|
|||||
Total Capital Expenditures
|
|
|
|
$
|
4,525
|
|
|
$
|
4,263
|
|
|
|
|
|
(1)
|
Includes costs not allocated to either the Electronic Systems or Structural Systems operating segments.
|
|
|
Three Months Ended
|
||||||||||||
GAAP To Non-GAAP Operating Income
|
|
March 30,
2019 |
|
March 31,
2018 |
|
%
of Net Revenues
2019
|
|
%
of Net Revenues
2018
|
||||||
GAAP Operating income
|
|
$
|
12,848
|
|
|
$
|
5,256
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
||||||
GAAP Operating income - Electronic Systems
|
|
$
|
9,181
|
|
|
$
|
5,744
|
|
|
|
|
|
||
Adjustments:
|
|
|
|
|
|
|
|
|
||||||
Restructuring charges
|
|
—
|
|
|
520
|
|
|
|
|
|
||||
Adjusted operating income - Electronic Systems
|
|
9,181
|
|
|
6,264
|
|
|
10.9
|
%
|
|
7.6
|
%
|
||
|
|
|
|
|
|
|
|
|
||||||
GAAP Operating income - Structural Systems
|
|
10,549
|
|
|
4,391
|
|
|
|
|
|
||||
Adjustments:
|
|
|
|
|
|
|
|
|
||||||
Restructuring charges
|
|
—
|
|
|
1,526
|
|
|
|
|
|
|
|||
Adjusted operating income - Structural Systems
|
|
10,549
|
|
|
5,917
|
|
|
11.9
|
%
|
|
8.7
|
%
|
||
|
|
|
|
|
|
|
|
|
||||||
GAAP Operating loss - Corporate
|
|
(6,882
|
)
|
|
(4,879
|
)
|
|
|
|
|
||||
Adjustment:
|
|
|
|
|
|
|
|
|
||||||
Restructuring charges
|
|
—
|
|
|
127
|
|
|
|
|
|
||||
Adjusted operating loss - Corporate
|
|
(6,882
|
)
|
|
(4,752
|
)
|
|
|
|
|
||||
Total adjustments
|
|
—
|
|
|
2,173
|
|
|
|
|
|
|
|
||
Adjusted operating income
|
|
$
|
12,848
|
|
|
$
|
7,429
|
|
|
7.4
|
%
|
|
4.9
|
%
|
|
|
Three Months Ended
|
||||||
GAAP To Non-GAAP Earnings
|
|
March 30,
2019 |
|
March 31,
2018 |
||||
GAAP Net income
|
|
$
|
7,472
|
|
|
$
|
2,600
|
|
Adjustments:
|
|
|
|
|
||||
Restructuring charges
(1)
|
|
—
|
|
|
1,804
|
|
||
Adjusted net income
|
|
$
|
7,472
|
|
|
$
|
4,404
|
|
|
|
Three Months Ended
|
||||||
GAAP Earnings Per Share To Non-GAAP Earnings Per Share
|
|
March 30,
2019 |
|
March 31,
2018 |
||||
GAAP Diluted earnings per share (“EPS”)
|
|
$
|
0.64
|
|
|
$
|
0.22
|
|
Adjustments:
|
|
|
|
|
||||
Restructuring charges
(1)
|
|
—
|
|
|
0.16
|
|
||
Adjusted diluted EPS
|
|
$
|
0.64
|
|
|
$
|
0.38
|
|
|
|
|
|
|
||||
Shares used for adjusted diluted EPS
|
|
11,755
|
|
|
11,613
|
|
(1)
|
Includes effective tax rate of 17.0% for 2018 adjustments.
|
|
|
(In thousands)
|
||||||
|
|
March 30,
2019 |
|
December 31,
2018 |
||||
Consolidated Ducommun
|
|
|
|
|
||||
Military and space
|
|
$
|
346,959
|
|
|
$
|
339,443
|
|
Commercial aerospace
|
|
499,473
|
|
|
487,232
|
|
||
Industrial
|
|
37,333
|
|
|
37,774
|
|
||
Total
|
|
$
|
883,765
|
|
|
$
|
864,449
|
|
Electronic Systems
|
|
|
|
|
||||
Military and space
|
|
$
|
249,302
|
|
|
$
|
241,196
|
|
Commercial aerospace
|
|
65,022
|
|
|
48,032
|
|
||
Industrial
|
|
37,333
|
|
|
37,774
|
|
||
Total
|
|
$
|
351,657
|
|
|
$
|
327,002
|
|
Structural Systems
|
|
|
|
|
||||
Military and space
|
|
$
|
97,657
|
|
|
$
|
98,247
|
|
Commercial aerospace
|
|
434,451
|
|
|
439,200
|
|
||
Total
|
|
$
|
532,108
|
|
|
$
|
537,447
|
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