View printer-friendly versionStrategic Actions Set Stage for Stronger Performance
Fourth Quarter 2015 Recap
-
Fourth quarter revenue was
$156.6 million -
Net loss was
$63.6 million , or$5.74 per share, including$90.2 million , pre-tax, in goodwill and intangible charges -
Adjusted EBITDA for the quarter was
$11.0 million -
Cash flow from operations was
$11.6 million -
Ducommun made voluntary principal prepayments totaling$15.0 million on its term loan during the quarter -- for an aggregate total of$45.0 million in voluntary prepayments during fiscal 2015
“The fourth quarter results mirrored 2015 in total, as both revenue and
profitability were impacted by year-over-year declines in military
shipments and schedule slides reflecting lower U.S. defense spending,”
said
“In addition to these actions, we’ve laid the groundwork to streamline
our product portfolio and improve Ducommun’s long-term growth trajectory
and financial performance. We announced the sale of our
Portfolio Repositioning Activities
Recent actions resulting from the Company’s assessment of its operational portfolio include:
-
The
Houston facility, which exclusively served the oil and gas market, was closed in the fourth quarter of 2015 as a result of the significant decline in these markets. Revenue for 2015 was approximately$10 million . -
In the first quarter of 2016, the
Pittsburgh operation, which served the heavy industrial and natural resources markets, was sold to focus the Company’s business on the aerospace, defense and other related high-technology markets. Revenue for 2015 was approximately$42 million . -
In the first quarter of 2016, the Company also entered into a
definitive agreement to sell the Miltec operation which is a
government services business unrelated to any of the Company’s other
businesses. Revenue for 2015 was approximately
$28 million .
In aggregate, these businesses had 2015 revenue of approximately
Fourth Quarter Results
In the fourth quarter of 2015, the Company renamed its operating
segments as
Net revenue for the fourth quarter of 2015 was
- Approximately 18.6% lower revenue in the Company’s military and space markets. This was due to a decrease in U.S. government defense spending and shifting spending priorities which impacted scheduled deliveries on the Company’s fixed-wing and helicopter platforms;
-
Approximately 20.3% lower revenue in the Company’s non-aerospace and
defense (“non-A&D”) end-use markets. This was due to the closure of
the Company’s
Houston manufacturing operations during the current quarter; and - Approximately 11.6% lower revenue in the Company’s commercial aerospace end-use markets. This was due to year end schedule slides on certain regional jet programs.
Net loss for the fourth quarter of 2015 was
The current quarter effective income tax benefit rate was 29.5% compared to an effective income tax benefit rate of 27.8% in the prior year’s quarter.
Operating loss for the fourth quarter of 2015 was
Interest expense decreased to
Adjusted EBITDA for the fourth quarter of 2015 was
During the fourth quarter of 2015, the Company generated
The Company’s firm backlog as of December 31, 2015 was approximately
Business Segment Information
Structural Systems
Structural Systems reported net revenue for the current quarter of
Structural Systems reported an operating loss for the current fourth
quarter of
Adjusted EBITDA was
Adjusted EBITDA was
Corporate General and Administrative Expenses (“CG&A”)
CG&A expenses for the current fourth quarter were
Full Year Results
Net revenue for the year ended December 31, 2015 was
- Approximately 21.4% lower revenue in the Company’s military and space end-use markets mainly due to a decrease in U.S. government defense spending and shifting spending priorities, which impacted the Company’s fixed-wing and helicopter platforms and pushed out scheduled deliveries of these products to customers; and
- Approximately 3.7% lower revenue from non-A&D end-use markets; which were
- Partially offset by an approximate 3.0% increase in revenue in commercial aerospace end-use markets.
Net loss for the year ended December 31, 2015 was
Operating loss for the year ended December 31, 2015 was
Interest expense decreased to
Adjusted EBITDA for the twelve months ended December 31, 2015 was
During 2015, the Company generated
Business Segment Information
Structural Systems
Structural Systems reported net revenue for the year ended December 31,
2015 of
Structural Systems reported an operating loss for 2015 of
Adjusted EBITDA was
Adjusted EBITDA was
Corporate General and Administrative Expenses
CG&A expenses for the year ended December 31, 2015 were
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About
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 | ||||||||||||
| CONSOLIDATED BALANCE SHEETS | ||||||||||||
| (Unaudited) | ||||||||||||
| (In thousands) | ||||||||||||
| December 31, | December 31, | |||||||||||
| 2015 | 2014 | |||||||||||
| Assets | ||||||||||||
| Current Assets | ||||||||||||
| Cash and cash equivalents | $ | 5,454 | $ | 45,627 | ||||||||
| Accounts receivable, net | 77,089 | 91,060 | ||||||||||
| Inventories | 115,404 | 142,842 | ||||||||||
| Production cost of contracts | 10,290 | 11,727 | ||||||||||
| Deferred income taxes | — | 13,783 | ||||||||||
| Other current assets | 14,358 | 23,702 | ||||||||||
| Assets held for sale | 41,636 | — | ||||||||||
| Total Current Assets | 264,231 | 328,741 | ||||||||||
| Property and Equipment, Net | 96,551 | 99,068 | ||||||||||
| Goodwill | 82,554 | 157,569 | ||||||||||
| Intangibles, Net | 110,621 | 155,104 | ||||||||||
| Other Assets | 7,463 | 7,117 | ||||||||||
| Total Assets | $ | 561,420 | $ | 747,599 | ||||||||
| Liabilities and Shareholders’ Equity | ||||||||||||
| Current Liabilities | ||||||||||||
| Current portion of long-term debt | $ | 26 | $ | 26 | ||||||||
| Accounts payable | 40,343 | 58,979 | ||||||||||
| Accrued liabilities | 36,458 | 52,066 | ||||||||||
| Liabilities held for sale | 6,780 | — | ||||||||||
| Total Current Liabilities | 83,607 | 111,071 | ||||||||||
| Long-Term Debt, Less Current Portion | 245,000 | 290,026 | ||||||||||
| Deferred Income Taxes | 26,528 | 69,448 | ||||||||||
| Other Long-Term Liabilities | 18,954 | 20,484 | ||||||||||
| Total Liabilities | 374,089 | 491,029 | ||||||||||
| Commitments and Contingencies | ||||||||||||
| Shareholders’ Equity | ||||||||||||
| Common stock | 111 | 110 | ||||||||||
| Additional paid-in capital | 75,200 | 72,206 | ||||||||||
| Retained earnings | 117,623 | 190,905 | ||||||||||
| Accumulated other comprehensive loss | (5,603 | ) | (6,651 | ) | ||||||||
| Total Shareholders’ Equity | 187,331 | 256,570 | ||||||||||
| Total Liabilities and Shareholders’ Equity | $ | 561,420 | $ | 747,599 | ||||||||
| DUCOMMUN INCORPORATED AND SUBSIDIARIES | ||||||||||||||||||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||||||||||
| (Quarterly Information Unaudited) | ||||||||||||||||||||||||
| (In thousands, except per share amounts) | ||||||||||||||||||||||||
| Three Months Ended | Years Ended | |||||||||||||||||||||||
| December 31, | December 31, | December 31, | December 31, | |||||||||||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||||||||||||
| Net Revenues | $ | 156,576 | $ | 187,612 | $ | 666,011 | $ | 742,045 | ||||||||||||||||
| Cost of Sales | 133,780 | 153,985 | 565,219 | 601,713 | ||||||||||||||||||||
| Gross Profit | 22,796 | 33,627 | 100,792 | 140,332 | ||||||||||||||||||||
| Selling, General and Administrative Expenses | 21,214 | 23,560 | 85,921 | 88,565 | ||||||||||||||||||||
| Goodwill Impairment | 57,243 | — | 57,243 | — | ||||||||||||||||||||
| Intangible Asset Impairment | 32,937 | — | 32,937 | — | ||||||||||||||||||||
| Operating (Loss) Income | (88,598 | ) | 10,067 | (75,309 | ) | 51,767 | ||||||||||||||||||
| Interest Expense | (2,210 | ) | (6,983 | ) | (18,709 | ) | (28,077 | ) | ||||||||||||||||
| Loss on Extinguishment of Debt | — | — | (14,720 | ) | — | |||||||||||||||||||
| Other Income, Net | 638 | 950 | 2,148 | 2,550 | ||||||||||||||||||||
| (Loss) Income Before Taxes | (90,170 | ) | 4,034 | (106,590 | ) | 26,240 | ||||||||||||||||||
| Income Tax (Benefit) Expense | (26,594 | ) | (1,122 | ) | (33,308 | ) | 6,373 | |||||||||||||||||
| Net (Loss) Income | $ | (63,576 | ) | $ | 5,156 | $ | (73,282 | ) | $ | 19,867 | ||||||||||||||
| (Loss) Earnings Per Share | ||||||||||||||||||||||||
| Basic (loss) earnings per share | $ | (5.74 | ) | $ | 0.47 | $ | (6.63 | ) | $ | 1.82 | ||||||||||||||
| Diluted (loss) earnings per share | $ | (5.74 | ) | $ | 0.46 | $ | (6.63 | ) | $ | 1.79 | ||||||||||||||
| Weighted-Average Number of Common Shares Outstanding | ||||||||||||||||||||||||
| Basic | 11,084 | 10,950 | 11,047 | 10,897 | ||||||||||||||||||||
| Diluted | 11,084 | 11,188 | 11,047 | 11,126 | ||||||||||||||||||||
| Gross Profit % | 14.6 | % | 17.9 | % | 15.1 | % | 18.9 | % | ||||||||||||||||
| SG&A % | 13.5 | % | 12.6 | % | 12.9 | % | 11.9 | % | ||||||||||||||||
| Operating (Loss) Income % | (56.6 | )% | 5.4 | % | (11.3 | )% | 7.0 | % | ||||||||||||||||
| Net (Loss) Income % | (40.6 | )% | 2.7 | % | (11.0 | )% | 2.7 | % | ||||||||||||||||
| Effective Tax (Benefit) Rate | (29.5 | )% | (27.8 | )% | (31.2 | )% | 24.3 | % | ||||||||||||||||
| DUCOMMUN INCORPORATED AND SUBSIDIARIES | ||||||||||||||||||||||||||||||||||
| BUSINESS SEGMENT PERFORMANCE | ||||||||||||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||||||||||
| (In thousands) | ||||||||||||||||||||||||||||||||||
| Three Months Ended | Years Ended | |||||||||||||||||||||||||||||||||
|
% |
% |
% |
% |
|||||||||||||||||||||||||||||||
| % | December 31, | December 31, |
of Net Revenues |
of Net Revenues |
% | December 31, | December 31, |
of Net Revenues |
of Net Revenues |
|||||||||||||||||||||||||
| Change | 2015 | 2014 | 2015 | 2014 | Change | 2015 | 2014 | 2015 | 2014 | |||||||||||||||||||||||||
| Net Revenues | ||||||||||||||||||||||||||||||||||
| Structural Systems | (22.1 | )% | $ | 61,013 | $ | 78,329 | 39.0 | % | 41.8 | % | (14.6 | )% | $ | 273,319 | $ | 319,956 | 41.0 | % | 43.1 | % | ||||||||||||||
| Electronic Systems | (12.6 | )% | 95,563 | 109,283 | 61.0 | % | 58.2 | % | (7.0 | )% | 392,692 | 422,089 | 59.0 | % | 56.9 | % | ||||||||||||||||||
| Total Net Revenues | (16.5 | )% | $ | 156,576 | $ | 187,612 | 100.0 | % | 100.0 | % | (10.2 | )% | $ | 666,011 | $ | 742,045 | 100.0 | % | 100.0 | % | ||||||||||||||
| Segment Operating (Loss) Income | ||||||||||||||||||||||||||||||||||
| Structural Systems | $ | (55,990 | ) | $ | 6,882 | (91.8 | )% | 8.8 | % | $ | (53,010 | ) | $ | 34,949 | (19.4 | )% | 10.9 | % | ||||||||||||||||
| Electronic Systems | (27,047 | ) | 8,510 | (28.3 | )% | 7.8 | % | (4,472 | ) | 34,599 | (1.1 | )% | 8.2 | % | ||||||||||||||||||||
| (83,037 | ) | 15,392 | (57,482 | ) | 69,548 | |||||||||||||||||||||||||||||
| Corporate General and Administrative Expenses (1) | (5,561 | ) | (5,325 | ) | (3.6 | )% | (2.8 | )% | (17,827 | ) | (17,781 | ) | (2.7 | )% | (2.4 | )% | ||||||||||||||||||
| Total Operating (Loss) Income | $ | (88,598 | ) | $ | 10,067 | (56.6 | )% | 5.4 | % | $ | (75,309 | ) | $ | 51,767 | (11.3 | )% | 7.0 | % | ||||||||||||||||
| Adjusted EBITDA | ||||||||||||||||||||||||||||||||||
| Structural Systems | ||||||||||||||||||||||||||||||||||
| Operating (Loss) Income (2)(3) | $ | (55,990 | ) | $ | 6,882 | $ | (53,010 | ) | $ | 34,949 | ||||||||||||||||||||||||
| Other Income (4) | — | 950 | 1,510 | 2,550 | ||||||||||||||||||||||||||||||
| Depreciation and Amortization | 2,408 | 2,717 | 9,417 | 10,959 | ||||||||||||||||||||||||||||||
| Goodwill Impairment | 57,243 | — | 57,243 | — | ||||||||||||||||||||||||||||||
| Restructuring Charges | 985 | — | 1,294 | — | ||||||||||||||||||||||||||||||
| 4,646 | 10,549 | 7.6 | % | 13.5 | % | 16,454 | 48,458 | 6.0 | % | 15.1 | % | |||||||||||||||||||||||
| Electronic Systems | ||||||||||||||||||||||||||||||||||
| Operating (Loss) Income (3)(5) | (27,047 | ) | 8,510 | (4,472 | ) | 34,599 | ||||||||||||||||||||||||||||
| Other Income | 712 | — | 712 | — | ||||||||||||||||||||||||||||||
| Depreciation and Amortization | 4,339 | 4,486 | 17,267 | 17,928 | ||||||||||||||||||||||||||||||
| Intangible Asset Impairment | 32,937 | — | 32,937 | — | ||||||||||||||||||||||||||||||
| Restructuring Charges | 334 | — | 831 | — | ||||||||||||||||||||||||||||||
| 11,275 | 12,996 | 11.8 | % | 11.9 | % | 47,275 | 52,527 | 12.0 | % | 12.4 | % | |||||||||||||||||||||||
| Corporate General and Administrative Expenses (1) | ||||||||||||||||||||||||||||||||||
| Operating loss | (5,561 | ) | (5,325 | ) | (17,827 | ) | (17,781 | ) | ||||||||||||||||||||||||||
| Other Expense | (74 | ) | — | (74 | ) | — | ||||||||||||||||||||||||||||
| Depreciation and Amortization | 35 | (8 | ) | 162 | 137 | |||||||||||||||||||||||||||||
| Stock-Based Compensation Expense | 703 | 1,204 | 3,495 | 3,725 | ||||||||||||||||||||||||||||||
| (4,897 | ) | (4,129 | ) | (14,244 | ) | (13,919 | ) | |||||||||||||||||||||||||||
| Adjusted EBITDA | $ | 11,024 | $ | 19,416 | 7.0 | % | 10.3 | % | $ | 49,485 | $ | 87,066 | 7.4 | % | 11.7 | % | ||||||||||||||||||
| Capital Expenditures | ||||||||||||||||||||||||||||||||||
| Structural Systems | $ | 3,479 | $ | 8,756 | $ | 11,559 | $ | 12,742 | ||||||||||||||||||||||||||
| Electronic Systems | 1,223 | 1,046 | 4,419 | 5,782 | ||||||||||||||||||||||||||||||
| Corporate Administration | — | 5 | 10 | 30 | ||||||||||||||||||||||||||||||
| Total Capital Expenditures | $ | 4,702 | $ | 9,807 | $ | 15,988 | $ | 18,554 | ||||||||||||||||||||||||||
(1) Includes costs not allocated to either the Structural Systems or
(2) Goodwill impairment related to Structural Systems operating segment.
(3) Includes restructuring charges for severance and benefits and loss on early exit from leases.
(4) Insurance recoveries related to property and equipment included as other income.
(5) Intangible asset impairment related to
View source version on businesswire.com: http://www.businesswire.com/news/home/20160314006247/en/
Source:
Ducommun Incorporated
Douglas L. Groves, 310-513-7224
Vice
President, Chief Financial Officer and Treasurer
or
Chris
Witty, 646-438-9385
Investor Relations
cwitty@darrowir.com