Margin Expansion and Strong Cash Flow Highlight Solid Second Quarter 2014 Results
Second Quarter 2014 Highlights
-
Second quarter revenue was
$186.5 million -
The Company reported net income of
$6.5 million , or$0.59 per diluted share -
EBITDA for the quarter was
$24.3 million -
Ducommun made a voluntary principal prepayment of$7.5 million on its term loan during the quarter -
The Company’s firm backlog as of June 28, 2014 was
$623 million
“The 2014 second quarter results reflected a continuation of our first
quarter performance, illustrating Ducommun’s longstanding customer
relationships, product depth, and sound manufacturing execution,” said
“We posted solid margins and strong cash flow while once again paying
down debt, further de-levering the balance sheet. The Company is
benefiting from improved operating performance and solid demand, and we
remain steadfast in using our position in the industry to drive greater
customer acceptance and deliver value-added products and services. Our
manufacturing operations continue to be the focus of improved asset
utilization as we position
Second Quarter Results
Net revenues for the second quarter of 2014 were
Net income for the second quarter of 2014 increased 17.6% to
Operating income for the second quarter of 2014 increased approximately
10.2% to
EBITDA for the second quarter of 2014 was
During the second quarter of 2014, the Company generated
Ducommun AeroStructures (“DAS”)
The Company’s DAS segment reported net revenues for the current second
quarter of
DAS segment operating income was
Ducommun LaBarge Technologies (“DLT”)
The Company’s DLT segment reported net revenues for the second quarter
of
DLT’s operating income for the second quarter of 2014 was
Corporate General and Administrative Expenses (“CG&A”)
CG&A expenses for the second quarter of 2014 were
Year To Date Results
Net revenues for the six months ended
Net income for the six months ended
Operating income for the six months ended
EBITDA for the six months ended
During the first six months of fiscal 2014 the Company generated
Ducommun AeroStructures
The Company’s DAS segment reported net revenues for the six months ended
DAS segment operating income during the first six months of fiscal 2014
was
Ducommun LaBarge Technologies
The Company’s DLT segment reported net revenues for the six months ended
DLT’s operating income for the first six months of fiscal 2014 was
Corporate General and Administrative Expenses
CG&A expenses for the six months ended
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About
Founded in 1849,
Statements contained in this press release regarding other than
recitation of historical facts are forward-looking statements. These
statements are identified by words such as “may,” “will,” “ begin,” “
look forward,” “expect,” “believe,” “intend,” “anticipate,” “should,”
“potential,” “estimate,” “continue,” “momentum” and other words
referring to events to occur in the future. These statements reflect the
Company’s current view of future events and are based on its assessment
of, and are subject to, a variety of risks and uncertainties beyond its
control, including, but not limited to, the state of the world
financial, credit, commodities and stock markets, and uncertainties
regarding the Company, its businesses and the industries in which it
operates, which are described in the Company’s filings with the
DUCOMMUN INCORPORATED AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (In thousands) |
||||||||
June 28, 2014 |
December 31, 2013 |
|||||||
Assets | ||||||||
Current Assets | ||||||||
Cash and cash equivalents | $ | 43,751 | $ | 48,814 | ||||
Accounts receivable, net | 105,209 | 91,909 | ||||||
Inventories | 142,201 | 140,507 | ||||||
Production cost of contracts | 11,023 | 11,599 | ||||||
Deferred income taxes | 11,513 | 10,850 | ||||||
Other current assets | 20,602 | 27,085 | ||||||
Total Current Assets | 334,299 | 330,764 | ||||||
Property and Equipment, Net | 94,070 | 96,090 | ||||||
Goodwill | 161,940 | 161,940 | ||||||
Intangibles, Net | 160,285 | 165,465 | ||||||
Other Assets | 8,660 | 9,940 | ||||||
Total Assets | $ | 759,254 | $ | 764,199 | ||||
Liabilities and Shareholders’ Equity | ||||||||
Current Liabilities | ||||||||
Current portion of long-term debt | $ | 26 | $ | 25 | ||||
Accounts payable | 53,749 | 58,111 | ||||||
Accrued liabilities | 47,973 | 45,453 | ||||||
Total Current Liabilities | 101,748 | 103,589 | ||||||
Long-Term Debt, Less Current Portion | 317,664 | 332,677 | ||||||
Deferred Income Taxes | 69,747 | 68,489 | ||||||
Other Long-Term Liabilities | 17,456 | 19,750 | ||||||
Total Liabilities | 506,615 | 524,505 | ||||||
Commitments and Contingencies | ||||||||
Shareholders’ Equity | ||||||||
Common stock | 109 | 110 | ||||||
Treasury stock | — | (1,924 | ) | |||||
Additional paid-in capital | 70,337 | 70,542 | ||||||
Retained earnings | 185,929 | 174,828 | ||||||
Accumulated other comprehensive loss | (3,736 | ) | (3,862 | ) | ||||
Total Shareholders’ Equity | 252,639 | 239,694 | ||||||
Total Liabilities and Shareholders’ Equity | $ | 759,254 | $ | 764,199 | ||||
DUCOMMUN INCORPORATED AND SUBSIDIARIES CONDENSED CONSOLIDATED INCOME STATEMENTS (Unaudited) (In thousands, except per share amounts) |
||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
June 28, 2014 |
June 29, 2013 |
June 28, 2014 |
June 29, 2013 |
|||||||||||||
Net Revenues | $ | 186,516 | $ | 191,472 | $ | 366,269 | $ | 367,387 | ||||||||
Cost of Sales | 149,073 | 154,156 | 293,756 | 297,218 | ||||||||||||
Gross Profit | 37,443 | 37,316 | 72,513 | 70,169 | ||||||||||||
Selling, General and Administrative Expenses | 20,868 | 22,273 | 41,955 | 44,824 | ||||||||||||
Operating Income | 16,575 | 15,043 | 30,558 | 25,345 | ||||||||||||
Interest Expense | 6,994 | 7,442 | 14,119 | 15,265 | ||||||||||||
Income Before Taxes | 9,581 | 7,601 | 16,439 | 10,080 | ||||||||||||
Income Tax Expense | 3,109 | 2,097 | 5,338 | 869 | ||||||||||||
Net Income | $ | 6,472 | $ | 5,504 | $ | 11,101 | $ | 9,211 | ||||||||
Earnings Per Share | ||||||||||||||||
Basic earnings per share | $ | 0.60 | $ | 0.52 | $ | 1.02 | $ | 0.87 | ||||||||
Diluted earnings per share | $ | 0.59 | $ | 0.51 | $ | 1.00 | $ | 0.86 | ||||||||
Weighted-Average Number of Common Shares Outstanding | ||||||||||||||||
Basic | 10,871 | 10,648 | 10,864 | 10,624 | ||||||||||||
Diluted | 11,045 | 10,790 | 11,122 | 10,731 | ||||||||||||
Gross Profit % | 20.1 | % | 19.5 | % | 19.8 | % | 19.1 | % | ||||||||
SG&A % | 11.2 | % | 11.6 | % | 11.5 | % | 12.2 | % | ||||||||
Operating Income % | 8.9 | % | 7.9 | % | 8.3 | % | 6.9 | % | ||||||||
Net Income % | 3.5 | % | 2.9 | % | 3.0 | % | 2.5 | % | ||||||||
Effective Tax Rate | 32.5 | % | 27.6 | % | 32.5 | % | 8.6 | % | ||||||||
DUCOMMUN INCORPORATED AND SUBSIDIARIES BUSINESS SEGMENT PERFORMANCE (Unaudited) (In thousands) |
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Three Months Ended | Six Months Ended | |||||||||||||||||||||||||||||||||
%
Change |
June 28, |
June 29, |
%
of Net 2014 |
%
of Net 2013 |
% Change |
June 28, |
June 29, |
% |
% |
|||||||||||||||||||||||||
Net Revenues | ||||||||||||||||||||||||||||||||||
DAS | (6.4 | )% | $ | 78,616 | $ | 83,992 | 42.1 | % | 43.9 | % | 2.3 | % | $ | 160,270 | $ | 156,697 | 43.8 | % | 42.7 | % | ||||||||||||||
DLT | 0.4 | % | 107,900 | 107,480 | 57.9 | % | 56.1 | % | (2.2 | )% | 205,999 | 210,690 | 56.2 | % | 57.3 | % | ||||||||||||||||||
Total Net Revenues | (2.6 | )% | $ | 186,516 | $ | 191,472 | 100.0 | % | 100.0 | % | (0.3 | )% | $ | 366,269 | $ | 367,387 | 100.0 | % | 100.0 | % | ||||||||||||||
Segment Operating Income | ||||||||||||||||||||||||||||||||||
DAS | $ | 9,833 | $ | 8,985 | 12.5 | % | 10.7 | % | $ | 20,079 | $ | 15,616 | 12.5 | % | 10.0 | % | ||||||||||||||||||
DLT | 10,757 | 11,167 | 10.0 | % | 10.4 | % | 17,801 | 19,101 | 8.6 | % | 9.1 | % | ||||||||||||||||||||||
20,590 | 20,152 | 37,880 | 34,717 | |||||||||||||||||||||||||||||||
Corporate General and Administrative Expenses (1) | (4,015 | ) | (5,109 | ) | (2.2 | )% | (2.7 | )% | (7,322 | ) | (9,372 | ) | (2.0 | )% | (2.6 | )% | ||||||||||||||||||
Total Operating Income | $ | 16,575 | $ | 15,043 | 8.9 | % | 7.9 | % | $ | 30,558 | $ | 25,345 | 8.3 | % | 6.9 | % | ||||||||||||||||||
EBITDA | ||||||||||||||||||||||||||||||||||
DAS | ||||||||||||||||||||||||||||||||||
Operating Income | $ | 9,833 | $ | 8,985 | $ | 20,079 | $ | 15,616 | ||||||||||||||||||||||||||
Depreciation and Amortization | 3,554 | 2,438 | 5,970 | 4,765 | ||||||||||||||||||||||||||||||
13,387 | 11,423 | 17.0 | % | 13.6 | % | 26,049 | 20,381 | 16.3 | % | 13.0 | % | |||||||||||||||||||||||
DLT | ||||||||||||||||||||||||||||||||||
Operating Income | 10,757 | 11,167 | 17,801 | 19,101 | ||||||||||||||||||||||||||||||
Depreciation and Amortization | 4,043 | 4,660 | 9,051 | 9,323 | ||||||||||||||||||||||||||||||
14,800 | 15,827 | 13.7 | % | 14.7 | % | 26,852 | 28,424 | 13.0 | % | 13.5 | % | |||||||||||||||||||||||
Corporate General and Administrative Expenses | ||||||||||||||||||||||||||||||||||
Operating loss | (4,015 | ) | (5,109 | ) | (7,322 | ) | (9,372 | ) | ||||||||||||||||||||||||||
Depreciation and Amortization | 102 | 42 | 104 | 85 | ||||||||||||||||||||||||||||||
(3,913 | ) | (5,067 | ) | (7,218 | ) | (9,287 | ) | |||||||||||||||||||||||||||
EBITDA | $ | 24,274 | $ | 22,183 | 13.0 | % | 11.6 | % | $ | 45,683 | $ | 39,518 | 12.5 | % | 10.8 | % | ||||||||||||||||||
Capital Expenditures | ||||||||||||||||||||||||||||||||||
DAS | $ | 1,435 | $ | 1,495 | $ | 2,720 | $ | 3,049 | ||||||||||||||||||||||||||
DLT | 2,078 | 1,128 | 2,975 | 2,180 | ||||||||||||||||||||||||||||||
Corporate Administration | 14 | 18 | 24 | 24 | ||||||||||||||||||||||||||||||
Total Capital Expenditures | $ | 3,527 | $ | 2,641 | $ | 5,719 | $ | 5,253 |
(1) Includes costs not allocated to either the DLT or DAS operating segments.
Source:
Ducommun Incorporated
Joseph P. Bellino, Vice President and Chief
Financial Officer
310.513.7211
or
Chris Witty, Investor
Relations
646.438.9385
cwitty@darrowir.com