Total Debt Reduction of
Fourth Quarter and Full Year 2013 Highlights
-
Cash flow from operations for 2013 was
$46.0 million -
Ducommun made voluntary principal prepayments of$30 million on its term loan in 2013 and also paid off a$3 million promissory note, reducing total debt by$33 million during the year -
The Company’s firm backlog at the end of 2013 was
$620 million -
Ducommun recorded charges during the 2013 fourth quarter of approximately$8.8 million , or$0.51 after-tax per diluted share, comprised of pre-tax program-related charges of approximately$14.1 million , partially offset by reduced accrued compensation expenses of approximately$5.3 million
"We finished the year with many successes but also some challenges
heading into 2014," said
"In 2014 we will see the winding down of the C-17 program and an expected softening in our helicopter business, reflecting a decline in demand and lower projected defense spending. That said, we have a number of ongoing business initiatives that look to leverage our technology and product portfolio to grow content on existing platforms as well as penetrate new ones. Going forward, we will continue to drive cash flow to pay down additional debt and use our continuous improvement initiatives to maintain a high level of customer satisfaction and expand margins."
Fourth Quarter Results
Net sales for the fourth quarter of 2013 were
Including the impact of
Operating income for the fourth quarter of 2013 was
Adjusted EBITDA for the fourth quarter of 2013 was
Cash flow generated from operations during the fourth quarter of 2013
was
Ducommun AeroStructures (DAS)
The Company’s DAS segment reported net sales for the fourth quarter of
DAS segment operating loss was
Ducommun LaBarge Technologies (DLT)
The Company’s DLT segment reported net sales for the fourth quarter of
DLT’s operating income for the fourth quarter of 2013 was
Corporate General and Administrative Expenses (CG&A)
CG&A expenses for the fourth quarter of 2013 were
Full Year Results
Net sales for the full year 2013 were
Net income for 2013 was
The Company recognized total federal research and development tax credit
benefits of
Operating income for 2013 was
Adjusted EBITDA for 2013 was
During 2013, the Company generated
Ducommun AeroStructures (DAS)
The Company’s DAS segment reported net sales for 2013 of
DAS segment operating income was
Ducommun LaBarge Technologies (DLT)
The Company’s DLT segment reported net sales for 2013 of
DLT’s operating income for 2013 was
Corporate General and Administrative Expenses (CG&A)
CG&A expenses for 2013 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 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
[Financial Tables Follow]
DUCOMMUN INCORPORATED AND SUBSIDIARIES |
||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||
(In thousands) | ||||||||
|
||||||||
December 31, | ||||||||
2013 | 2012 | |||||||
Assets | ||||||||
Current Assets | ||||||||
Cash and cash equivalents | $ | 48,814 | $ | 46,537 | ||||
Accounts receivable, net | 91,909 | 97,300 | ||||||
Inventories | 140,507 | 148,318 | ||||||
Production cost of contracts | 11,599 | 17,960 | ||||||
Deferred income taxes | 10,850 | 5,474 | ||||||
Other current assets | 27,085 | 13,997 | ||||||
Total Current Assets | 330,764 | 329,586 | ||||||
Property and Equipment, Net | 96,090 | 98,383 | ||||||
Goodwill | 161,940 | 161,940 | ||||||
Intangibles, Net | 165,465 | 176,356 | ||||||
Other Assets | 9,940 | 13,824 | ||||||
Total Assets | $ | 764,199 | $ | 780,089 | ||||
Liabilities and Shareholders’ Equity | ||||||||
Current Liabilities | ||||||||
Current portion of long-term debt | $ | 25 | $ | 3,042 | ||||
Accounts payable | 58,111 | 52,578 | ||||||
Accrued liabilities | 45,453 | 50,184 | ||||||
Total Current Liabilities | 103,589 | 105,804 | ||||||
Long-Term Debt, Less Current Portion | 332,677 | 362,702 | ||||||
Deferred Income Taxes | 68,489 | 65,355 | ||||||
Other Long-Term Liabilities | 19,750 | 23,553 | ||||||
Total Liabilities | 524,505 | 557,414 | ||||||
Commitments and Contingencies | ||||||||
Shareholders’ Equity | ||||||||
Common stock | 110 | 107 | ||||||
Treasury stock | (1,924 | ) | (1,924 | ) | ||||
Additional paid-in capital | 70,542 | 66,475 | ||||||
Retained earnings | 174,828 | 165,485 | ||||||
Accumulated other comprehensive loss | (3,862 | ) | (7,468 | ) | ||||
Total Shareholders’ Equity | 239,694 | 222,675 | ||||||
Total Liabilities and Shareholders’ Equity | $ | 764,199 | $ | 780,089 |
DUCOMMUN INCORPORATED AND SUBSIDIARIES | ||||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||
(In thousands, except per share amounts) | ||||||||||||||||
Fourth Quarters | Year Ended | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Net Sales | $ | 187,975 | $ | 193,892 | $ | 736,650 | $ | 747,037 | ||||||||
Cost of Sales | 168,031 | 158,442 | 614,233 | 605,585 | ||||||||||||
Gross Profit | 19,944 | 35,450 | 122,417 | 141,452 | ||||||||||||
Selling, General and Administrative Expenses | 19,674 | 20,748 | 84,849 | 86,639 | ||||||||||||
Operating Income | 270 | 14,702 | 37,568 | 54,813 | ||||||||||||
Interest Expense | 7,250 | 8,084 | 29,918 | 32,798 | ||||||||||||
Income Before Taxes | (6,980 | ) | 6,618 | 7,650 | 22,015 | |||||||||||
Income Tax Expense (Benefit) | (2,476 | ) | 3,183 | (1,693 | ) | 5,578 | ||||||||||
Net Income (Loss) | $ | (4,504 | ) | $ | 3,435 | $ | 9,343 | $ | 16,437 | |||||||
Earnings (Loss) Per Share | ||||||||||||||||
Basic earnings (loss) per share | $ | (0.42 | ) | $ | 0.32 | $ | 0.87 | $ | 1.55 | |||||||
Diluted earnings (loss) per share | $ | (0.42 | ) | $ | 0.32 | $ | 0.86 | $ | 1.55 | |||||||
Weighted-Average Number of Common Shares Outstanding | ||||||||||||||||
Basic | 10,804 | 10,595 | 10,695 | 10,580 | ||||||||||||
Diluted | 10,804 | 10,634 | 10,852 | 10,628 | ||||||||||||
Gross Profit % | 10.6 | % | 18.3 | % | 16.6 | % | 18.9 | % | ||||||||
SG&A % | 10.5 | % | 10.7 | % | 11.5 | % | 11.6 | % | ||||||||
Operating Income % | 0.1 | % | 7.6 | % | 5.1 | % | 7.3 | % | ||||||||
Net Income % | (2.4 | )% | 1.8 | % | 1.3 | % | 2.2 | % | ||||||||
Effective Tax Rate (Benefit) | 35.5 | % | 48.1 | % | (22.1 | )% | 25.3 | % |
DUCOMMUN INCORPORATED AND SUBSIDIARIES | |||||||||||||||||
BUSINESS SEGMENT PERFORMANCE | |||||||||||||||||
(Unaudited) | |||||||||||||||||
(In thousands) | |||||||||||||||||
|
|||||||||||||||||
Fourth Quarters | |||||||||||||||||
% | % | ||||||||||||||||
% |
of Net Sales |
of Net Sales |
|||||||||||||||
Change | 2013 | 2012 | 2013 | 2012 | |||||||||||||
Net Sales | |||||||||||||||||
DAS | (1.6 | )% | $ | 80,795 | $ | 82,150 | 43.0 | % | 42.4 | % | |||||||
DLT | (4.1 | )% | 107,180 | 111,742 | 57.0 | % | 57.6 | % | |||||||||
Total Net Sales | (3.1 | )% | $ | 187,975 | $ | 193,892 | 100.0 | % | 100.0 | % | |||||||
Segment Operating Income | |||||||||||||||||
DAS (3) | $ | (5,644 | ) | $ | 7,217 | (7.0 | )% | 8.8 | % | ||||||||
DLT | 9,409 | 11,438 | 8.8 | % | 10.2 | % | |||||||||||
3,765 | 18,655 | ||||||||||||||||
Corporate General and Administrative Expenses (1) (2) | (3,496 | ) | (3,953 | ) | (1.9 | )% | (2.0 | )% | |||||||||
Total Operating Income | $ | 269 | $ | 14,702 | 0.1 | % | 7.6 | % | |||||||||
EBITDA (1) | |||||||||||||||||
DAS | |||||||||||||||||
Operating Income (3) | $ | (5,644 | ) | $ | 7,217 | ||||||||||||
Depreciation and Amortization | 5,019 | 3,113 | |||||||||||||||
(625 | ) | 10,330 | (0.8 | )% | 12.6 | % | |||||||||||
DLT | |||||||||||||||||
Operating Income | 9,409 | 11,438 | |||||||||||||||
Depreciation and Amortization | 4,484 | 4,795 | |||||||||||||||
13,893 | 16,233 | 13.0 | % | 14.5 | % | ||||||||||||
Corporate General and Administrative Expenses | |||||||||||||||||
Operating loss (2) | (3,496 | ) | (3,953 | ) | |||||||||||||
Depreciation and Amortization | 47 | 44 | |||||||||||||||
(3,449 | ) | (3,909 | ) | (1.8 | )% | (2.0 | )% | ||||||||||
EBITDA | $ | 9,819 | $ | 22,654 | |||||||||||||
Adjusted EBITDA | |||||||||||||||||
Asset Impairments (3) | $ | 6,975 | $ | — | |||||||||||||
Adjusted EBITDA | $ | 16,794 | $ | 22,654 | 8.9 | % | 11.7 | % | |||||||||
Capital Expenditures | |||||||||||||||||
DAS | $ | 4,079 | $ | 1,590 | |||||||||||||
DLT | 1,954 | 1,888 | |||||||||||||||
Corporate Administration | 49 | 5 | |||||||||||||||
Total Capital Expenditures | $ | 6,082 | $ | 3,483 |
_______________ |
||
(1) | Includes costs not allocated to either the DLT or DAS operating segments. | |
(2) | The 2013 and 2012 periods include $.1 million and $0.2 million, respectively, of workers’ compensation insurance expenses included in gross profit and not allocated to the operating segments. | |
(3) | The 2013 fourth quarter includes $14.1 million in charges related to fourth quarter asset impairment charges of $5.7 million on the Embraer 450/500 Legacy contracts and $1.3 million on the Boeing 777 wing tip contract; forward loss reserves of $3.9 million on the Embraer 450/500 Legacy contracts and $1.3 million on the Boeing 777 wing tip contract; and inventory write-offs of $1.9 million on the Embraer 450/500 Legacy contracts. |
DUCOMMUN INCORPORATED AND SUBSIDIARIES | |||||||||||||||||
BUSINESS SEGMENT PERFORMANCE | |||||||||||||||||
(Unaudited) | |||||||||||||||||
(In thousands) | |||||||||||||||||
Years Ended December 31, | |||||||||||||||||
% | % | ||||||||||||||||
% | of Net Sales | of Net Sales | |||||||||||||||
Change | 2013 | 2012 | 2013 | 2012 | |||||||||||||
Net Sales | |||||||||||||||||
DAS | 1.7 | % | $ | 315,232 | $ | 309,982 | 42.8 | % | 41.5 | % | |||||||
DLT | (3.6 | )% | 421,418 | 437,055 | 57.2 | % | 58.5 | % | |||||||||
Total Net Sales | (1.4 | )% | $ | 736,650 | $ | 747,037 | 100.0 | % | 100.0 | % | |||||||
Segment Operating Income | |||||||||||||||||
DAS (4) | $ | 18,122 | $ | 28,792 | 5.7 | % | 9.3 | % | |||||||||
DLT (2) | 36,181 | 40,698 | 8.6 | % | 9.3 | % | |||||||||||
54,303 | 69,490 | ||||||||||||||||
Corporate General and Administrative Expenses (1) (2) (3) | (16,735 | ) | (14,677 | ) | (2.3 | )% | (2.0 | )% | |||||||||
Total Operating Income | $ | 37,568 | $ | 54,813 | 5.1 | % | 7.3 | % | |||||||||
EBITDA (1) | |||||||||||||||||
DAS | |||||||||||||||||
Operating Income (4) | $ | 18,122 | $ | 28,792 | |||||||||||||
Depreciation and Amortization | 12,406 | 10,313 | |||||||||||||||
30,528 | 39,105 | 9.7 | % | 12.6 | % | ||||||||||||
DLT | |||||||||||||||||
Operating Income (2) | 36,181 | 40,698 | |||||||||||||||
Depreciation and Amortization | 18,346 | 18,934 | |||||||||||||||
54,527 | 59,632 | 12.9 | % | 13.6 | % | ||||||||||||
Corporate General and Administrative Expenses (1) (2) (3) | |||||||||||||||||
Operating loss | (16,735 | ) | (14,677 | ) | |||||||||||||
Depreciation and Amortization | 174 | 166 | |||||||||||||||
(16,561 | ) | (14,511 | ) | (2.2 | )% | (1.9 | )% | ||||||||||
EBITDA | $ | 68,494 | $ | 84,226 | 9.3 | % | 11.3 | % | |||||||||
Adjusted EBITDA | |||||||||||||||||
Merger-related expenses (2) | $ | — | $ | 702 | |||||||||||||
Asset Impairments (4) | $ | 6,975 | $ | — | |||||||||||||
Adjusted EBITDA | $ | 75,469 | $ | 84,928 | 10.2 | % | 11.4 | % | |||||||||
Capital Expenditures | |||||||||||||||||
DAS | $ | 8,287 | $ | 7,950 | |||||||||||||
DLT | 5,000 | 7,809 | |||||||||||||||
Corporate Administration | 116 | 54 | |||||||||||||||
Total Capital Expenditures | $ | 13,403 | $ | 15,813 |
_______________ |
||
(1) | Includes costs not allocated to either the DLT or DAS operating segments. | |
(2) | The 2012 period includes merger-related transaction costs of $0.3 million in Corporate General and Administrative Expenses and $0.4 million in DLT resulting from a change in control provision for certain key executives and employees arising in connection with the LaBarge Acquisition. | |
(3) | The 2013 and 2012 periods include $1.2 million and $0.6 million, respectively, of workers' compensation insurance expenses included in gross profit and not allocated to the operating segments. | |
(4) | The 2013 period includes $14.1 million in charges related to fourth quarter asset impairment charges of $5.7 million on the Embraer 450/500 Legacy contracts and $1.3 million on the Boeing 777 wing tip contract; forward loss reserves of $3.9 million on the Embraer 450/500 Legacy contracts and $1.3 million on the Boeing 777 wing tip contract; and inventory write-offs of $1.9 million on the Embraer 450/500 Legacy contracts. |
Source:
Ducommun Incorporated
Joseph P. Bellino
Vice President,
Treasurer and Chief Financial Officer
310-513-7211
or
Investor
Relations
Chris Witty, 646-438-9385
cwitty@darrowir.com