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Ducommun Incorporated Reports Results for the First Quarter Ended
April 3, 2010

LOS ANGELES, May 03, 2010 (BUSINESS WIRE) --Ducommun Incorporated (NYSE:DCO) today reported results for its first quarter ended April 3, 2010.

Sales for the first quarter of 2010 decreased 6% to $104.3 million, as compared to sales of $111.4 million for the first quarter of 2009. Net income for the first quarter of 2010 increased to $4.2 million, or $0.40 per diluted share, compared to net income of $2.6 million, or $0.25 per diluted share, for the comparable period last year. The first quarter 2009 results were impacted by an after-tax charge of $2.9 million, or $0.27 per diluted share, for an inventory reserve related to the Eclipse Aviation Corporation bankruptcy filing in March, 2009.

"While still experiencing some softness this quarter in aftermarket demand and engineering services, our overall commercial end markets appear to be strengthening, and we continue to invest in new business development initiatives that will benefit Ducommun in the quarters to come," said Anthony J. Reardon, president and chief executive officer. "We saw margin compression due to start-up expenses associated with several new programs, but we expect this impact to be short term in nature. As commercial demand recovers, we will continue to keep Ducommun focused on productivity improvements, further penetration on key programs, and cash flow generation."

The 6% decrease in revenue for the first quarter of 2010 was due to lower year-over-year sales for the Apache helicopter and regional and business aircraft, and lower revenues from engineering services, partially offset by growth in sales of large commercial and military aircraft and commercial helicopter products. The Company's mix of business in the first quarter of 2010 was approximately 58% military, 40% commercial and 2% space, compared to 61% military, 37% commercial and 2% space in the first quarter of 2009.

Gross profit, as a percentage of sales, was 18.5% in the first quarter of 2010, compared to 15.5% in the first quarter of 2009. Gross profit in the first quarter of 2009 was negatively impacted by the pre-tax inventory reserve of $4.4 million, or 3.9 percentage points, as discussed above. Gross profit in the first quarter of 2010 was negatively impacted by $1.8 million, or 2.4 percentage points, due to start-up and development costs associated with several new programs which generated approximately $3.1 million in sales.

Selling, general and administration (SG&A) expenses decreased to $12.5 million, or 11.9% of sales, in the first quarter of 2010, compared to $12.8 million, or 11.5% of sales, in the first quarter of 2009. The decrease in SG&A resulted mainly from lower people related expenses and cost controls, partially offset by a $0.6 million increase in expenses related to amortization of intangible assets.

The Company's net income for the first quarter of 2010 increased 63% from the first quarter of 2009. The Company's effective tax rate was 33.0% in both the first quarter of 2010 and 2009.

Mr. Reardon concluded, "As the overall aerospace recovery becomes more apparent, we are positioning Ducommun for stronger operating performance heading into 2011. We remain optimistic that the Company will benefit from a rebound in the regional jet market, growth in aftermarket demand, and new commercial programs such as the Boeing 787. In the meantime, new program wins, operational excellence and effective working capital management will serve as our tools for improving Ducommun's financial results going forward."

About Ducommun Incorporated

Founded in 1849, Ducommun Incorporated provides engineering and manufacturing services to the aerospace and defense industry. The Company is a supplier of critical components and assemblies for commercial aircraft, military aircraft, and missile and space programs through its three business units: Ducommun AeroStructures (DAS), Ducommun Technologies (DTI), and Miltec. Additional information can be found at

A teleconference hosted by Anthony J. Reardon, the Company's president and chief executive officer, and Joseph P. Bellino, the Company's vice president and chief financial officer, will be held tomorrow, May 4, at 8:00 AM PT (11:00 AM ET). To participate in the teleconference, please call 866-383-8003 (international 617-597-5330) approximately ten minutes prior to the conference time stated above. The participant passcode is 22993301. Mr. Reardon and Mr. Bellino will be speaking on behalf of the Company and anticipate the meeting and Q&A period to last approximately 40 minutes. This call is being webcast by Thomson/CCBN and can be accessed directly at the Thomson Reuters website. Conference call replay will be available after that time at the same link or at the Company's web site,

The statements made in this press release include forward-looking statements that involve risks and uncertainties.The Company's future financial results could differ materially from those anticipated due to the Company's dependence on conditions in the airline industry, the level of new commercial aircraft orders, production rates for Boeing commercial aircraft, the C-17and Apache helicopter rotor blade programs, the level of defense spending, competitive pricing pressures, manufacturing inefficiencies, start-up costs and possible overruns on new contracts, technology and product development risks and uncertainties, product performance, risks associated with acquisitions and dispositions of businesses by the Company, increasing consolidation of customers and suppliers in the aerospace industry, possible goodwill impairment,and other factors beyond the Company's control.See the Company's Form 10-K for the year ended December 31, 2009 for a more detailed discussion of these and other risk factors and contingencies.

(In thousands, except per share amounts)
Three Months Ended
April 3, April 4,
2010 2009
Sales and Service Revenues
Product sales $ 92,388 $ 93,977
Service revenues 11,868 17,378
Total 104,256 111,355
Operating Costs and Expenses:
Cost of product sales 75,601 79,972
Cost of service revenues 9,337 14,077
Selling, general & administrative expenses 12,463 12,809
Total 97,401 106,858
Operating Income 6,855 4,497
Interest Expense (552 ) (639 )
Income Tax Expense (2,080 ) (1,273 )
Net Income $ 4,223 $ 2,585
Earnings Per Share:
Basic earnings per share $ 0.40 $ 0.25
Diluted earnings per shares $ 0.40 $ 0.25
Weighted Average Number of
Common Shares Outstanding:
Basic 10,465 10,495
Diluted 10,502 10,502
(In thousands)
April 3, December 31,
2010 2009
Current Assets:
Cash and cash equivalents $ 1,497 $ 18,629
Accounts receivable 57,127 48,378
Unbilled receivables 4,684 4,207
Inventories 71,860 67,749
Production cost of contracts 15,358 12,882
Deferred income taxes 5,252 4,794
Other current assets 4,775 7,452
Total Current Assets 160,553 164,091
Property and Equipment, Net 60,276 60,923
Goodwill, Net 100,442 100,442
Other Assets 27,341 28,453
$ 348,612 $ 353,909
Liabilities and Shareholders' Equity
Current Liabilities:
Current portion of long-term debt $ 4,951 $ 4,963
Accounts payable 34,044 39,434
Accrued liabilities 23,681 33,869
Total Current Liabilities 62,676 78,266
Long-Term Debt, Less Current Portion 29,482 23,289
Deferred Income Taxes 8,247 7,732
Other Long-Term Liabilities 10,409 10,736
Total Liabilities 110,814 120,023
Commitments and Contingencies
Shareholders' Equity:
Common stock 106 106
Treasury stock (1,924 ) (1,924 )
Additional paid-in capital 58,841 58,498
Retained earnings 184,198 180,760
Accumulated other comprehensive loss (3,423 ) (3,554 )
Total Shareholders' Equity 237,798 233,886
$ 348,612 $ 353,909

SOURCE: Ducommun Incorporated

Ducommun Incorporated
Joseph P. Bellino
Vice President and Chief Financial Officer
Chris Witty
Investor Relations
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