Continued Strengthening of Margins and Earnings
Highlights
-
The Company reported net income of
$5.1 million , or$0.48 per diluted share, for the third quarter of 2012, up$2.2 million versus$2.9 million , or$0.27 per diluted share, reported in the third quarter of 2011 excluding pre-tax merger-related expenses of$2.7 million -
Cash generated from operating activities in the third quarter of 2012
was
$5.7 million , an improvement of$11.7 million compared to the third quarter of 2011 -
The Company made a voluntary
$10.0 million principal pre-payment on its term loan -
Firm backlog at the end of the third quarter was approximately
$642 million
“Ducommun’s focus on the bottom line again produced tangible results
this quarter,” said
“At the same time, we pre-paid
Third Quarter Results
Sales for the third quarter of 2012 were
Adjusted EBITDA for the third quarter of 2012 was
The Company had an effective tax rate of 14.9% in the third quarter of 2012, compared to an effective tax rate of 30.2% in the third quarter of 2011.
Cash flow generated from operations during the third quarter of 2012 was
Ducommun AeroStructures (DAS)
The DAS segment reported net sales for the third quarter of 2012 of
Ducommun LaBarge Technologies (DLT)
The DLT segment reported net sales for the third quarter of 2012 of
Corporate General and Administrative Expenses (CG&A)
CG&A expenses for the third quarter of 2012 were
Year to Date Results
Sales for the first nine months of 2012 increased 41% to
Adjusted EBITDA for the first nine months of 2012 increased to
The Company had an effective tax rate of 15.6% for the first nine months
of 2012, compared to an effective tax rate of 27.2% for the first nine
months of 2011. The effective tax rate in 2012 benefitted from the
LaBarge acquisition, which allowed the Company to file consolidated
state tax returns (“combined report”) in certain states. This reduced
the Company’s tax provision by approximately
Cash flow generated from operations during the first nine months of 2012
was
Ducommun AeroStructures (DAS)
The DAS segment reported net sales for the first nine months of 2012 of
Ducommun LaBarge Technologies (DLT)
The DLT segment reported net sales for the first nine months of 2012 of
Corporate General and Administrative Expenses (CG&A)
CG&A expenses for the first nine 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
DUCOMMUN INCORPORATED AND SUBSIDIARIES | ||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||
(In thousands) | ||||||||
(Unaudited) | ||||||||
September 29, | December 31, | |||||||
2012 | 2011 | |||||||
Assets | ||||||||
Current Assets: | ||||||||
Cash and cash equivalents | $ | 28,871 | $ | 41,449 | ||||
Accounts receivable | 103,049 | 96,174 | ||||||
Unbilled receivables | 3,527 | 3,286 | ||||||
Inventories | 162,465 | 154,503 | ||||||
Production cost of contracts | 19,064 | 18,711 | ||||||
Deferred income taxes | 12,493 | 12,020 | ||||||
Other current assets | 11,191 | 14,648 | ||||||
Total Current Assets | 340,660 | 340,791 | ||||||
Property and Equipment, Net | 99,058 | 98,477 | ||||||
Goodwill | 161,940 | 163,845 | ||||||
Intangibles, Net | 179,228 | 187,854 | ||||||
Other Assets | 14,365 | 17,120 | ||||||
$ | 795,251 | $ | 808,087 | |||||
Liabilities and Shareholders' Equity | ||||||||
Current Liabilities: | ||||||||
Current portion of long-term debt | $ | 33 | $ | 1,960 | ||||
Accounts payable | 57,599 | 60,675 | ||||||
Accrued liabilities | 45,208 | 53,823 | ||||||
Total Current Liabilities | 102,840 | 116,458 | ||||||
Long-Term Debt, Less Current Portion | 380,730 | 390,280 | ||||||
Deferred Income Taxes | 68,915 | 72,043 | ||||||
Other Long-Term Liabilities | 23,815 | 25,022 | ||||||
Total Liabilities | 576,300 | 603,803 | ||||||
Commitments and Contingencies | ||||||||
Shareholders' Equity: | ||||||||
Common stock | 107 | 107 | ||||||
Treasury stock | (1,924 | ) | (1,924 | ) | ||||
Additional paid-in capital | 66,043 | 64,378 | ||||||
Retained earnings | 162,050 | 149,048 | ||||||
Accumulated other comprehensive loss | (7,325 | ) | (7,325 | ) | ||||
Total Shareholders' Equity | 218,951 | 204,284 | ||||||
$ | 795,251 | $ | 808,087 | |||||
DUCOMMUN INCORPORATED AND SUBSIDIARIES | ||||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||
(In thousands, except per share amounts) | ||||||||||||||||
(Unaudited) | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 29, | October 1, | September 29, | October 1, | |||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||
Sales and Service Revenues: | ||||||||||||||||
Product sales | $ | 176,054 | $ | 178,485 | $ | 530,696 | $ | 370,763 | ||||||||
Service revenues | 8,043 | 6,595 | 22,449 | 21,913 | ||||||||||||
Net Sales | 184,097 | 185,080 | 553,145 | 392,676 | ||||||||||||
Operating Costs and Expenses: | ||||||||||||||||
Cost of product sales | 142,030 | 145,560 | 428,975 | 301,941 | ||||||||||||
Cost of service revenues | 6,487 | 5,331 | 18,168 | 17,134 | ||||||||||||
Selling, general and administrative expenses | 21,340 | 24,557 | 65,891 | 62,303 | ||||||||||||
Total Operating Costs and Expenses | 169,857 | 175,448 | 513,034 | 381,378 | ||||||||||||
Operating Income | 14,240 | 9,632 | 40,111 | 11,298 | ||||||||||||
Interest Expense | (8,241 | ) | (8,256 | ) | (24,714 | ) | (10,047 | ) | ||||||||
Income Before Taxes | 5,999 | 1,376 | 15,397 | 1,251 | ||||||||||||
Income Tax Expense | (894 | ) | (415 | ) | (2,395 | ) | (340 | ) | ||||||||
Net Income | $ | 5,105 | $ | 961 | $ | 13,002 | $ | 911 | ||||||||
Earnings Per Share: | ||||||||||||||||
Basic earnings per share | $ | 0.48 | $ | 0.09 | $ | 1.23 | $ | 0.09 | ||||||||
Diluted earnings per share | $ | 0.48 | $ | 0.09 | $ | 1.23 | $ | 0.09 | ||||||||
Weighted Average Number of Common Shares Outstanding: | ||||||||||||||||
Basic | 10,595 | 10,539 | 10,575 | 10,534 | ||||||||||||
Diluted | 10,633 | 10,631 | 10,588 | 10,658 | ||||||||||||
DUCOMMUN INCORPORATED AND SUBSIDIARIES | ||||||||||||||||||||||
BUSINESS SEGMENT PERFORMANCE | ||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||||
September 29, | October 1, | September 29, | October 1, | |||||||||||||||||||
2012 | 2011 | Change | 2012 | 2011 | Change | |||||||||||||||||
Net Sales | ||||||||||||||||||||||
Ducommun AeroStructures | $ | 76,655 | $ | 75,076 | 2.1 | % | $ | 227,832 | $ | 223,890 | 1.8 | % | ||||||||||
Ducommun LaBarge Technologies | 107,442 | 110,004 | -2.3 | % | 325,313 | 168,786 | 92.7 | % | ||||||||||||||
Total Net Sales | $ | 184,097 | $ | 185,080 | -0.5 | % | $ | 553,145 | $ | 392,676 | 40.9 | % | ||||||||||
Segment Operating Income (1) | ||||||||||||||||||||||
Ducommun AeroStructures | $ | 7,410 | $ | 6,503 | $ | 21,575 | $ | 22,414 | ||||||||||||||
Ducommun LaBarge Technologies (5) | 10,472 | 7,287 | 29,260 | 12,129 | ||||||||||||||||||
17,882 | 13,790 | 50,835 | 34,543 | |||||||||||||||||||
Corporate General and Administrative Expenses (3)(5) | (3,642 | ) | (4,158 | ) | (10,724 | ) | (23,245 | ) | ||||||||||||||
Total Operating Income/(Loss) | $ | 14,240 | $ | 9,632 | $ | 40,111 | $ | 11,298 | ||||||||||||||
EBITDA (1) | ||||||||||||||||||||||
Ducommun AeroStructures | ||||||||||||||||||||||
Operating Income | $ | 7,410 | $ | 6,503 | $ | 21,575 | $ | 22,414 | ||||||||||||||
Depreciation and Amortization | 2,903 | 2,681 | 7,200 | 7,710 | ||||||||||||||||||
10,313 | 9,184 | 28,775 | 30,124 | |||||||||||||||||||
Ducommun LaBarge Technologies | ||||||||||||||||||||||
Operating Income | 10,472 | 7,287 | 29,260 | 12,129 | ||||||||||||||||||
Depreciation and Amortization | 4,710 | 4,745 | 14,139 | 6,725 | ||||||||||||||||||
15,182 | 12,032 | 43,399 | 18,854 | |||||||||||||||||||
Corporate General and Administrative Expenses (2)(3) | ||||||||||||||||||||||
Operating Income/(Loss) | (3,642 | ) | (4,158 | ) | (10,724 | ) | (23,245 | ) | ||||||||||||||
Depreciation and Amortization | 42 | 29 | 122 | 37 | ||||||||||||||||||
(3,600 | ) | (4,129 | ) | (10,602 | ) | (23,208 | ) | |||||||||||||||
EBITDA | $ | 21,895 | $ | 17,087 | $ | 61,572 | $ | 25,770 | ||||||||||||||
Adjusted EBITDA | ||||||||||||||||||||||
Merger-related transaction expenses (2)(4) | 6 | 308 | 268 | 11,785 | ||||||||||||||||||
Merger-related change-in-control compensation expenses (5) | 1 | 2,374 | 434 | 2,374 | ||||||||||||||||||
7 | 2,682 | 702 | 14,159 | |||||||||||||||||||
Adjusted EBITDA | $ | 21,902 | $ | 19,769 | $ | 62,274 | $ | 39,929 | ||||||||||||||
Capital Expenditures: | ||||||||||||||||||||||
Ducommun AeroStructures | $ | 2,074 | $ | 2,838 | $ | 6,360 | $ | 6,972 | ||||||||||||||
Ducommun LaBarge Technologies | 1,472 | 2,494 | 5,921 | 3,970 | ||||||||||||||||||
Corporate Administration | 21 | 50 | 49 | 244 | ||||||||||||||||||
Total Capital Expenditures | $ | 3,567 | $ | 5,382 | $ | 12,330 | $ | 11,186 | ||||||||||||||
(1) | Before certain allocated corporate overhead. | |
(2) | Includes approximately $6 thousand and $0.3 million of merger-related transaction expenses related to the LaBarge acquisition in the three months and nine months ended September 29, 2012 and approximately $0.3 million and $11.8 million in the three months and nine months ended October 1, 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. | |
(4) | Includes investment banking, accounting, legal, tax and valuation expenses as a direct result of the LaBarge acquisition. | |
(5) | Includes approximately $1 thousand and $0.4 million of merger-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 nine months ended September 29, 2012 and approximately $2.4 million in both the three months and nine months ended October 1, 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