View printer-friendly versionAchieved Margin Expansion and Solid Cash Flow Generation
Highlights
-
Net sales increased 71% to
$184.7 million for the second quarter of 2012 versus the second quarter of 2011, including sales of$80.3 million from the acquisition ofLaBarge, Inc. (“LaBarge”) -
The Company reported net income of
$5.5 million , or$0.52 per fully diluted share, for the second quarter of 2012, including a state tax benefit of$0.15 per fully diluted share -
Adjusted EBITDA grew to
$21.3 million in the second quarter of 2012 from$11.1 million in the second quarter of 2011 -
Cash flow from operations was
$10.5 million in the second quarter 2012 -
Backlog as of
June 30, 2012 was approximately$640 million
“Ducommun saw additional momentum this quarter driven by stronger
operational performance, margin gains at Ducommun LaBarge Technologies
and commercial aircraft demand,” said
“Having largely integrated LaBarge and its operations to realize
synergies and reduce costs, we are now focused on ensuring that
sequential margin expansion continues – and bottom line results improve
– within the current economic environment. More than ever, Ducommun’s
customers are recognizing and appreciating the breadth of our offerings,
thus providing opportunities for us to grow via increased technology
content and more complex subassemblies. In the near term, commercial
aerospace build rates remain robust, our military platforms are solid,
and the Company’s backlog represents an attractive mix of programs
across various end markets. We believe the second half of 2012 will
bring a convergence of positive factors across our businesses,
positioning
Second Quarter Results
Sales for the second quarter of 2012 increased 71% to
Adjusted EBITDA for the second quarter of 2012 increased to
The Company had an effective tax rate of 4.7% in the second quarter
2012, compared to an effective tax benefit of 27.9% in the second
quarter 2011. The effective tax rate in the second quarter of 2012
benefitted from the LaBarge acquisition which allowed the Company to
file state consolidated tax returns (“combined report”) in certain
states. This lower tax rate reduced the Company’s tax provision by
approximately
Cash flow generated from operations during the second quarter of 2012
was
Ducommun AeroStructures (DAS)
The DAS segment reported net sales for the second quarter of
Ducommun LaBarge Technologies (DLT)
The DLT segment reported net sales for the second quarter of
Corporate General and Administrative Expenses (CG&A)
CG&A expenses for the second quarter of 2012 were
Six Months Results
Sales for the first six months of 2012 increased 78% to
Adjusted EBITDA for the first six months of 2012 increased to
The Company had an effective tax rate of 16.0% for the six months ended
Cash flow generated from operations during the first half of 2012 was
Ducommun AeroStructures (DAS)
The DAS segment reported net sales for the first six months of 2012 of
Ducommun LaBarge Technologies (DLT)
The DLT segment reported net sales for the first six months of 2012 of
Corporate General and Administrative Expenses (CG&A)
CG&A expenses for the first six months of 2012 were
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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
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, any difficulties,
delays or failure in, or unanticipated costs of, realizing the expected
synergies of the LaBarge acquisition, and uncertainties regarding the
Company, its businesses and the industries in which it operates, which
are described in the Company’s filings with the
[Financial Tables Follow]
| DUCOMMUN INCORPORATED AND SUBSIDIARIES | ||||||||||||||||
| CONSOLIDATED STATEMENTS OF (LOSS)/INCOME | ||||||||||||||||
| (In thousands, except per share amounts) | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | July 2, | June 30, | July 2, | |||||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||||||
| Sales and Service Revenues: | ||||||||||||||||
| Product sales | $ | 177,140 | $ | 100,945 | $ | 354,642 | $ | 192,278 | ||||||||
| Service revenues | 7,565 | 7,098 | 14,406 | 15,318 | ||||||||||||
| Net Sales | 184,705 | 108,043 | 369,048 | 207,596 | ||||||||||||
| Operating Costs and Expenses: | ||||||||||||||||
| Cost of product sales | 142,542 | 81,542 | 286,945 | 156,381 | ||||||||||||
| Cost of service revenues | 6,212 | 5,497 | 11,681 | 11,803 | ||||||||||||
| Selling, general and administrative expenses | 21,939 | 23,597 | 44,551 | 37,746 | ||||||||||||
| Total Operating Costs and Expenses | 170,693 | 110,636 | 343,177 | 205,930 | ||||||||||||
| Operating Income/(Loss) | 14,012 | (2,593 | ) | 25,871 | 1,666 | |||||||||||
| Interest Expense | (8,234 | ) | (1,531 | ) | (16,473 | ) | (1,791 | ) | ||||||||
| Income/(Loss) Before Taxes | 5,778 | (4,124 | ) | 9,398 | (125 | ) | ||||||||||
| Income Tax (Expense)/Benefit | (271 | ) | 1,151 | (1,501 | ) | 75 | ||||||||||
| Net Income/(Loss) | $ | 5,507 | $ | (2,973 | ) | $ | 7,897 | $ | (50 | ) | ||||||
| Earnings Per Share: | ||||||||||||||||
| Basic earnings/(loss) per share | $ | 0.52 | $ | (0.28 | ) | $ | 0.75 | $ | - | |||||||
| Diluted earnings/(loss) per share | $ | 0.52 | $ | (0.28 | ) | $ | 0.75 | $ | - | |||||||
| Weighted Average Number of Common | ||||||||||||||||
| Shares Outstanding | ||||||||||||||||
| Basic | 10,582 | 10,536 | 10,565 | 10,531 | ||||||||||||
| Diluted | 10,582 | 10,696 | 10,565 | 10,656 | ||||||||||||
| DUCOMMUN INCORPORATED AND SUBSIDIARIES | ||||||||
| CONSOLIDATED BALANCE SHEETS | ||||||||
| (In thousands) | ||||||||
| (Unaudited) | ||||||||
| June 30, | December 31, | |||||||
| 2012 | 2011 | |||||||
| Assets | ||||||||
| Current Assets: | ||||||||
| Cash and cash equivalents | $ | 37,251 | $ | 41,449 | ||||
| Accounts receivable | 100,279 | 96,174 | ||||||
| Unbilled receivables | 4,302 | 3,286 | ||||||
| Inventories | 159,303 | 154,503 | ||||||
| Production cost of contracts | 19,952 | 18,711 | ||||||
| Deferred income taxes | 12,245 | 12,020 | ||||||
| Other current assets | 11,975 | 14,648 | ||||||
| Total Current Assets | 345,307 | 340,791 | ||||||
| Property and Equipment, Net | 99,443 | 98,477 | ||||||
| Goodwill | 161,940 | 163,845 | ||||||
| Intangibles, Net | 182,103 | 187,854 | ||||||
| Other Assets | 15,842 | 17,120 | ||||||
| $ | 804,635 | $ | 808,087 | |||||
| Liabilities and Shareholders' Equity | ||||||||
| Current Liabilities: | ||||||||
| Current portion of long-term debt | $ | 1,941 | $ | 1,960 | ||||
| Accounts payable | 55,799 | 60,675 | ||||||
| Accrued liabilities | 50,914 | 53,823 | ||||||
| Total Current Liabilities | 108,654 | 116,458 | ||||||
| Long-Term Debt, Less Current Portion | 389,317 | 390,280 | ||||||
| Deferred Income Taxes | 68,311 | 72,043 | ||||||
| Other Long-Term Liabilities | 24,993 | 25,022 | ||||||
| Total Liabilities | 591,275 | 603,803 | ||||||
| Commitments and Contingencies | ||||||||
| Shareholders' Equity: | ||||||||
| Common stock | 107 | 107 | ||||||
| Treasury stock | (1,924 | ) | (1,924 | ) | ||||
| Additional paid-in capital | 65,557 | 64,378 | ||||||
| Retained earnings | 156,945 | 149,048 | ||||||
| Accumulated other comprehensive loss | (7,325 | ) | (7,325 | ) | ||||
| Total Shareholders' Equity | 213,360 | 204,284 | ||||||
| $ | 804,635 | $ | 808,087 | |||||
| DUCOMMUN INCORPORATED AND SUBSIDIARIES | ||||||||||||||||||||||
| BUSINESS SEGMENT PERFORMANCE | ||||||||||||||||||||||
| (In thousands) | ||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||
| Three Months | Six Months | |||||||||||||||||||||
| June 30, | July 2, | June 30, | July 2, | |||||||||||||||||||
| 2012 | 2011 | Change | 2012 | 2011 | Change | |||||||||||||||||
| Net Sales: | ||||||||||||||||||||||
| Ducommun AeroStructures | $ | 76,890 | $ | 76,575 | 0.4 | % | $ | 151,177 | $ | 148,779 | 1.6 | % | ||||||||||
| Ducommun LaBarge Technologies | 107,815 | 31,468 | 242.6 | % | 217,871 | 58,817 | 270.4 | % | ||||||||||||||
| Total Net Sales | $ | 184,705 | $ | 108,043 | 71.0 | % | $ | 369,048 | $ | 207,596 | 77.8 | % | ||||||||||
| Segment Operating Income (1) | ||||||||||||||||||||||
| Ducommun AeroStructures | $ | 7,574 | $ | 8,844 | $ | 14,165 | $ | 15,911 | ||||||||||||||
| Ducommun LaBarge Technologies (5) | 10,486 | 2,721 | 18,788 | 4,844 | ||||||||||||||||||
| 18,060 | 11,565 | 32,953 | 20,755 | |||||||||||||||||||
| Corporate General and Administrative Expenses (3)(5) | (4,048 | ) | (14,158 | ) | (7,082 | ) | (19,089 | ) | ||||||||||||||
| Total Operating Income/(Loss) | $ | 14,012 | $ | (2,593 | ) | $ | 25,871 | $ | 1,666 | |||||||||||||
| EBITDA (1) | ||||||||||||||||||||||
| Ducommun AeroStructures | ||||||||||||||||||||||
| Operating Income | $ | 7,574 | $ | 8,844 | $ | 14,165 | $ | 15,911 | ||||||||||||||
| Depreciation and Amortization | 2,241 | 2,472 | 4,297 | 5,029 | ||||||||||||||||||
| 9,815 | 11,316 | 18,462 | 20,940 | |||||||||||||||||||
| Ducommun LaBarge Technologies | ||||||||||||||||||||||
| Operating Income | 10,486 | 2,721 | 18,788 | 4,844 | ||||||||||||||||||
| Depreciation and Amortization | 4,732 | 1,130 | 9,429 | 1,980 | ||||||||||||||||||
| 15,218 | 3,851 | 28,217 | 6,824 | |||||||||||||||||||
| Corporate General and Administrative Expenses (2)(3) | ||||||||||||||||||||||
| Operating Loss | (4,048 | ) | (14,158 | ) | (7,082 | ) | (19,089 | ) | ||||||||||||||
| Depreciation and Amortization | 30 | 4 | 81 | 8 | ||||||||||||||||||
| (4,018 | ) | (14,154 | ) | (7,001 | ) | (19,081 | ) | |||||||||||||||
| EBITDA | $ | 21,015 | $ | 1,013 | $ | 39,678 | $ | 8,683 | ||||||||||||||
| Adjusted EBITDA | ||||||||||||||||||||||
| Acquisition-related transaction expenses (3)(4) | $ | 111 | $ | 10,076 | $ | 262 | $ | 11,476 | ||||||||||||||
| Acquisition-related change-in-control compensation expenses (5) | 217 | - | 433 | - | ||||||||||||||||||
| 328 | 10,076 | 695 | 11,476 | |||||||||||||||||||
| Adjusted EBITDA | $ | 21,343 | $ | 11,089 | $ | 40,373 | $ | 20,159 | ||||||||||||||
| Capital Expenditures: | ||||||||||||||||||||||
| Ducommun AeroStructures | $ | 1,829 | $ | 3,375 | $ | 4,286 | $ | 4,134 | ||||||||||||||
| Ducommun LaBarge Technologies | 2,012 | 788 | 4,449 | 1,475 | ||||||||||||||||||
| Corporate Administration | 5 | 131 | 28 | 194 | ||||||||||||||||||
| Total Capital Expenditures | $ | 3,846 | $ | 4,294 | $ | 8,763 | $ | 5,803 | ||||||||||||||
|
(1) |
Before certain allocated corporate overhead. |
|
|
(2) |
Includes approximately $0.1 million and $0.3 million of acquisition-related transaction expenses related to the LaBarge acquisition in the three months and six months ended June 30, 2012 and approximately $10.1 million and $11.5 million in the three months and six months ended July 2, 2011, respectively. |
|
|
(3) |
Certain expenses, previously incurred by the operating units, are now included in the corporate general and administrative expense as a result of the Company's organizational changes. |
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|
(4) |
Includes investment banking, accounting, legal, tax and valuation expenses as a direct result of the LaBarge acquisition. |
|
|
(5) |
Includes approximately $0.2 million and $0.4 million of acquisition-related transaction costs resulting from a change-in-control provision for certain LaBarge key executives and employees arising in connection with the LaBarge acquisition in the three months and six months ended June 30, 2012 and $0 in 2011. |
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