dco-20200730
0000030305FALSE00000303052020-07-302020-07-30


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________________
FORM 8-K
____________________________
 
 CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 30, 2020
____________________________
DUCOMMUN INCORPORATED
(Exact name of registrant as specified in its charter)
____________________________
Delaware001-08174 95-0693330
(State or other jurisdiction
of incorporation)
(Commission
File Number)
 (IRS Employer
Identification No.)
200 Sandpointe Avenue, Suite 700 , Santa Ana, California
 92707-5759
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code (657335-3665
N/A
(Former name or former address, if changed since last report.)
____________________________ 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
 Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
 Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
 Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
 Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading Symbol(s)Name of each exchange on which registered
Common Stock, $.01 par value per share DCONew York Stock Exchange
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (240.12b-2 of this chapter).
Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the
Exchange Act.
¨





Item 2.02Results of Operations and Financial Condition.
Ducommun Incorporated issued a press release on July 30, 2020 in the form attached hereto as Exhibit 99.1.
 
Item 9.01Financial Statements and Exhibits.

(d) Exhibits

Exhibit No.Exhibit Title or Description
104Cover Page Interactive Data File (embedded within the Inline XBRL document).





SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
DUCOMMUN INCORPORATED
(Registrant)
Date: July 30, 2020 By:/s/ Christopher D. Wampler
 Christopher D. Wampler
 Vice President, Interim Chief Financial Officer and Treasurer, and Controller and Chief Accounting Officer


Document

EXHIBIT 99.1
https://cdn.kscope.io/0241eb5b68ba0c3d82bccfbea81b225a-dcologoandaddressa0511.jpg
NEWS RELEASE

Ducommun Incorporated Reports Results for the
Second Quarter Ended June 27, 2020
Gross Margin Expansion; Military and Space Revenue Growth; Effectively Responding to Rapidly Changing Industry Conditions
SANTA ANA, CALIFORNIA (July 30, 2020) – Ducommun Incorporated (NYSE:DCO) (“Ducommun” or the “Company”) today reported results for its second quarter ended June 27, 2020.
Second Quarter 2020 Recap
Revenue was $147.3 million
Net income of $5.1 million, or $0.43 per diluted share
Adjusted net income of $5.6 million, or $0.48 per diluted share
Gross margin increased 110 basis points year-over-year to 22.2%
Adjusted EBITDA was $20.3 million
“This past quarter proved to be one of the most challenging in our history, but Ducommun's performance highlights both the strength and diversity of our business as well as the many measures taken to streamline and optimize our operations since I joined the Company in 2017,” said Stephen G. Oswald, chairman, president and chief executive officer. “Due to the ongoing COVID-19 pandemic, our commercial aerospace was negatively impacted but our defense related revenue rose roughly 23% year-over-year, leveraging an array of integral military programs and missile systems. In addition, our military and space backlog* increased to over $500 million, bolstering the outlook across this key part of the business.
“At the same time, despite overall lower revenue, gross margins increased year-over-year due to an improved product mix in defense, effective cost controls, value added pricing and the acquisition of Nobles Worldwide last fall, a key addition to our engineered products portfolio. The team remains focused as well on rigorous safety protocols, serving our customers, effectively managing working capital, working with the supply base and reducing costs wherever and whenever possible. We are also confident that Ducommun's strong product portfolio, intellectual property, dedicated staff and efficient operations will provide positive momentum in the second half of the year and position us for a solid rebound in 2021.”
Second Quarter Results
Net revenue for the second quarter of 2020 was $147.3 million compared to $180.5 million for the second quarter of 2019. The year-over-year decrease of 18.4% was primarily due to the following:
$51.6 million lower revenue in the Company’s commercial aerospace end-use markets due to lower build rates on large aircraft platforms; partially offset by
$17.4 million higher revenue in the Company’s military and space end-use markets due to additional content and higher build rates on other military and space platforms, and higher build rates on military fixed-wing aircraft platforms and various missile platforms.
Net income for the second quarter of 2020 was $5.1 million, or $0.43 per diluted share, compared to $7.8 million, or $0.66 per diluted share, for the second quarter of 2019. This reflects a $5.4 million decrease in gross profit due to lower revenue, partially offset by lower selling, general and administrative (“SG&A”) expenses of $2.5 million.
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Gross profit for the second quarter of 2020 was $32.7 million, or 22.2% of revenue, compared to gross profit of $38.1 million, or 21.1% of revenue, for the second quarter of 2019. The increase in gross profit margin as a percentage of net revenue year-over-year was due to lower compensation and benefit costs and favorable product mix, partially offset by unfavorable manufacturing volume.
Operating income for the second quarter of 2020 was $10.0 million, or 6.8% of revenue, compared to $13.6 million, or 7.5% of revenue, in the comparable period last year. The year-over-year decrease of $3.6 million was due to lower revenue, partially offset by lower SG&A expenses.
Interest expense for the second quarter of 2020 was $3.7 million compared to $4.4 million in the comparable period of 2019. The year-over-year decrease was due to lower interest rates, partially offset by a higher outstanding balance on the Company’s credit facilities driven by the acquisition of Nobles Worldwide, Inc. (“Nobles”) in October 2019, and higher net draw downs on the Company’s revolving credit facility, including $50.0 million during the first quarter of 2020, which remained as cash on hand at the end of the second quarter of 2020.
Adjusted EBITDA for the second quarter of 2020 was $20.3 million, or 13.8% of revenue, compared to $22.4 million, or 12.4% of revenue, for the comparable period in 2019.
During the second quarter of 2020, the net cash provided by operations was $8.6 million compared to $9.7 million during the second quarter of 2019. The change year-over-year was due to higher inventories and lower accounts payable, partially offset by lower accounts receivable.
* The Company defines backlog as potential revenue and is based on customer placed purchase orders and long-term agreements (“LTAs”) with firm fixed price and expected delivery dates of 24 months or less. Backlog as of June 27, 2020 was $830.7 million compared to $910.2 million as of December 31, 2019. Under ASC 606, the Company defines remaining performance obligations as customer placed purchase orders with firm fixed price and firm delivery dates. The remaining performance obligations disclosed under ASC 606 as of June 27, 2020 were $732.2 million compared to $745.3 million as of December 31, 2019.
Business Segment Information
Electronic Systems
Electronic Systems segment net revenue for the quarter ended June 27, 2020 was $92.0 million, compared to $89.3 million for the second quarter of 2019. The year-over-year increase was primarily due to the following:
$7.7 million higher revenue within the Company’s military and space end-use markets due to higher build rates on military fixed-wing aircraft platforms, various missile platforms, and other military and space platforms; partially offset by
$6.0 million lower revenue within the Company’s commercial aerospace end-use markets due to lower build rates on other commercial aerospace platforms.
Electronic Systems segment operating income for the quarter ended June 27, 2020 was $10.4 million, or 11.4% of revenue, compared to $9.9 million, or 11.1% of revenue, for the comparable quarter in 2019. The year-over-year increase of $0.5 million was due to lower compensation and benefit costs.
Structural Systems
Structural Systems segment net revenue for the quarter ended June 27, 2020 was $55.4 million, compared to $91.2 million for the second quarter of 2019. The year-over-year decrease was due to the following:
$45.5 million lower revenue within the Company’s commercial aerospace end-use markets due to lower build rates on large aircraft platforms; partially offset by
$9.7 million higher revenue within the Company’s military and space end-use markets due to additional content and higher build rates on other military and space platforms, and higher build rates on military rotary-wing aircraft platforms and military fixed-wing aircraft platforms.
Structural Systems segment operating income for the quarter ended June 27, 2020 was $6.2 million, or 11.2% of revenue, compared to $11.8 million, or 12.9% of revenue, for the comparable quarter in 2019. The year-over-year decrease of $5.6 million was due to unfavorable manufacturing volume, partially offset by favorable product mix.

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Corporate General and Administrative (“CG&A”) Expenses
CG&A expenses for the second quarter of 2020 were $6.6 million, or 4.5% of total Company revenue, compared to $8.1 million, or 4.5% of total Company revenue, for the comparable quarter in the prior year. The decrease in CG&A expenses was due to a one-time severance charges of $1.7 million in the prior year.
Conference Call
A teleconference hosted by Stephen G. Oswald, the Company’s chairman, president, and chief executive officer, and Christopher D. Wampler, the Company’s vice president, interim chief financial officer and treasurer, and controller and chief accounting officer will be held today, July 30, 2020 at 2:00 p.m. PT (5:00 p.m. ET) to review these financial results. To participate in the teleconference, please call 844-239-5278 (international 574-990-1017) approximately 10 minutes prior to the conference time. The participant passcode is 9433049. Mr. Oswald and Mr. Wampler will be speaking on behalf of the Company and anticipate the call (including Q&A) to last approximately 45 minutes.
This call is being webcast and can be accessed directly at the Ducommun website at Ducommun.com. Conference call replay will be available after that time at the same link or by dialing 855-859-2056, passcode 9433049.
About Ducommun Incorporated
Ducommun Incorporated delivers value-added innovative manufacturing solutions to customers in the aerospace, defense and industrial markets. Founded in 1849, the Company specializes in two core areas - Electronic Systems and Structural Systems - to produce complex products and components for commercial aircraft platforms, mission-critical military and space programs, and sophisticated industrial applications. For more information, visit Ducommun.com.
Forward Looking Statements
This press release and any attachments include “forward-looking statements,” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including, in particular, earnings guidance and any statements about the Company’s plans, strategies and prospects. The Company generally uses the words “may,” “will,” “could,” “expect,” “anticipate,” “believe,” “estimate,” “plan,” “intend,” “continue” and similar expressions in this press release and any attachments to identify forward-looking statements. The Company bases these forward-looking statements on its current views with respect to future events and financial performance. Actual results could differ materially from those projected in the forward-looking statements. These forward-looking statements are subject to risks, uncertainties and assumptions, including, among other things: whether the anticipated pre-tax restructuring charges will be sufficient to address all anticipated restructuring costs, including related to employee separation, facilities consolidation, inventory write-down and other asset impairments; whether the expected cost savings from the restructuring will ultimately be obtained in the amount and during the period anticipated; whether the restructuring in the affected areas will be sufficient to build a more cost efficient, focused, higher margin enterprise with higher returns for the Company's shareholders; the impact of the Company’s debt service obligations and restrictive debt covenants; the Company’s end-use markets are cyclical; the Company depends upon a selected base of industries and customers; a significant portion of the Company’s business depends upon U.S. Government defense spending; the Company is subject to extensive regulation and audit by the Defense Contract Audit Agency; contracts with some of the Company’s customers contain provisions which give the its customers a variety of rights that are unfavorable to the Company; further consolidation in the aerospace industry could adversely affect the Company’s business and financial results; the Company’s ability to successfully make acquisitions, including its ability to successfully integrate, operate or realize the projected benefits of such businesses; the Company relies on its suppliers to meet the quality and delivery expectations of its customers; the Company uses estimates when bidding on fixed-price contracts which estimates could change and result in adverse effects on its financial results; the impact of existing and future laws and regulations; the impact of existing and future accounting standards and tax rules and regulations; environmental liabilities could adversely affect the Company’s financial results; cyber security attacks, internal system or service failures may adversely impact the Company’s business and operations; the ultimate geographic spread, duration and severity of the coronavirus (COVID-19) outbreak, and the effectiveness of actions taken, or actions that may be taken, by governmental authorities to contain the outbreak or treat its impact, and other risks and uncertainties, including those detailed from time to time in the Company’s periodic reports filed with the Securities and Exchange Commission. You should not put undue reliance on any forward-looking statements. You should understand that many important factors, including those discussed herein, could cause the Company’s results to differ materially from those expressed or suggested in any forward-looking statement. Except as required by law, the Company does not undertake any obligation to update or revise these forward-looking statements to reflect new information or events or circumstances that occur after the date of this news release, July 30, 2020, or
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to reflect the occurrence of unanticipated events or otherwise. Readers are advised to review the Company’s filings with the Securities and Exchange Commission (which are available from the SEC’s EDGAR database at www.sec.gov).
Note Regarding Non-GAAP Financial Information
This release contains non-GAAP financial measures, including Adjusted EBITDA (which excludes interest expense, income tax expense, depreciation, amortization, stock-based compensation expense, and restructuring charges).
The Company believes the presentation of these non-GAAP measures provide important supplemental information to management and investors regarding financial and business trends relating to its financial condition and results of operations. The Company’s management uses these non-GAAP financial measures along with the most directly comparable GAAP financial measures in evaluating the Company’s actual and forecasted operating performance, capital resources and cash flow. The non-GAAP financial information presented herein should be considered supplemental to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. The Company discloses different non-GAAP financial measures in order to provide greater transparency and to help the Company’s investors to more meaningfully evaluate and compare Ducommun’s results to its previously reported results. The non-GAAP financial measures that the Company uses may not be comparable to similarly titled financial measures used by other companies. We define backlog as potential revenue and is based on customer placed purchase orders and long-term agreements (“LTAs”) with firm fixed price and expected delivery dates of 24 months or less. The majority of the LTAs do not meet the definition of a contract under ASC 606 and thus, the backlog amount disclosed herein is greater than the remaining performance obligations disclosed under ASC 606. Backlog is subject to delivery delays or program cancellations, which are beyond our control. Backlog is affected by timing differences in the placement of customer orders and tends to be concentrated in several programs to a greater extent than our net revenues. Backlog in industrial markets tends to be of a shorter duration and is generally fulfilled within a three month period. As a result of these factors, trends in our overall level of backlog may not be indicative of trends in our future net revenues.
CONTACTS:
Christopher D. Wampler, Vice President, Interim Chief Financial Officer and Treasurer, and Controller and Chief Accounting Officer, 657.335.3665
Chris Witty, Investor Relations, 646.438.9385, cwitty@darrowir.com
[Financial Tables Follow]
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DUCOMMUN INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in thousands)
 
June 27,
2020
December 31,
2019
Assets
Current Assets
Cash and cash equivalents$70,828  $39,584  
Accounts receivable, net67,518  67,133  
Contract assets122,877  106,670  
Inventories128,609  112,482  
Production cost of contracts7,351  9,402  
Other current assets4,548  5,497  
Total Current Assets401,731  340,768  
Property and equipment, Net113,765  115,216  
Operating lease right-of-use assets17,789  19,105  
Goodwill170,907  170,917  
Intangibles, net131,224  138,362  
Non-current deferred income taxes59  55  
Other assets6,162  6,006  
Total Assets$841,637  $790,429  
Liabilities and Shareholders’ Equity
Current Liabilities
Accounts payable$69,068  $82,597  
Contract liabilities27,082  14,517  
Accrued and other liabilities29,122  37,620  
Operating lease liabilities3,094  2,956  
Current portion of long-term debt7,000  7,000  
Total Current Liabilities135,366  144,690  
Long-term debt, less current portion341,975  300,887  
Non-current operating lease liabilities16,155  17,565  
Non-current deferred income taxes18,755  16,766  
Other long-term liabilities19,779  17,721  
Total Liabilities532,030  497,629  
Commitments and contingencies
Shareholders’ Equity
Common stock117  116  
Additional paid-in capital91,645  88,399  
Retained earnings225,573  212,553  
Accumulated other comprehensive loss(7,728) (8,268) 
Total Shareholders’ Equity309,607  292,800  
Total Liabilities and Shareholders’ Equity$841,637  $790,429  

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DUCOMMUN INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(Dollars in thousands, except per share amounts)
 
 Three Months EndedSix Months Ended
 June 27,
2020
June 29,
2019
June 27,
2020
June 29,
2019
Net Revenues$147,309  $180,495  $320,784  $353,061  
Cost of Sales114,641  142,430  251,312  279,302  
Gross Profit32,668  38,065  69,472  73,759  
Selling, General and Administrative Expenses21,982  24,461  45,160  47,307  
Restructuring Charges661  —  661  —  
Operating Income10,025  13,604  23,651  26,452  
Interest Expense(3,721) (4,426) (7,967) (8,777) 
Income Before Taxes6,304  9,178  15,684  17,675  
Income Tax Expense1,214  1,363  2,664  2,388  
Net Income$5,090  $7,815  $13,020  $15,287  
Earnings Per Share
Basic earnings per share$0.44  $0.68  $1.12  $1.33  
Diluted earnings per share$0.43  $0.66  $1.10  $1.30  
Weighted-Average Number of Common Shares Outstanding
Basic11,665  11,513  11,638  11,475  
Diluted11,828  11,758  11,845  11,754  
Gross Profit %22.2 %21.1 %21.7 %20.9 %
SG&A %15.0 %13.6 %14.1 %13.4 %
Operating Income %6.8 %7.5 %7.4 %7.5 %
Net Income %3.5 %4.3 %4.1 %4.3 %
Effective Tax Rate19.3 %14.9 %17.0 %13.5 %

6


DUCOMMUN INCORPORATED AND SUBSIDIARIES
BUSINESS SEGMENT PERFORMANCE
(Unaudited)
(Dollars in thousands)
 
 Three Months EndedSix Months Ended
 %
Change
June 27,
2020
June 29,
2019
%
of Net  Revenues
2020
%
of Net  Revenues
2019
%
Change
June 27,
2020
June 29,
2019
%
of Net  Revenues
2020
%
of Net  Revenues
2019
Net Revenues
Electronic Systems3.0 %$91,950  $89,260  62.4 %49.5 %9.6 %$190,070  $173,457  59.3 %49.1 %
Structural Systems(39.3)%55,359  91,235  37.6 %50.5 %(27.2)%130,714  179,604  40.7 %50.9 %
Total Net Revenues(18.4)%$147,309  $180,495  100.0 %100.0 %(9.1)%$320,784  $353,061  100.0 %100.0 %
Segment Operating Income
Electronic Systems$10,438  $9,912  11.4 %11.1 %$25,560  $19,093  13.4 %11.0 %
Structural Systems 6,214  11,773  11.2 %12.9 %11,604  22,322  8.9 %12.4 %
16,652  21,685  37,164  41,415  
Corporate General and Administrative Expenses(1)
(6,627) (8,081) (4.5)%(4.5)%(13,513) (14,963) (4.2)%(4.2)%
Total Operating Income$10,025  $13,604  6.8 %7.5 %$23,651  $26,452  7.4 %7.5 %
Adjusted EBITDA
Electronic Systems
Operating Income
$10,438  $9,912  $25,560  $19,093  
Depreciation and Amortization
3,524  3,531  7,099  7,033  
Restructuring Charges28  —  28  —  
13,990  13,443  15.2 %15.1 %32,687  26,126  17.2 %15.1 %
Structural Systems
Operating Income
6,214  11,773  11,604  22,322  
Depreciation and Amortization
3,739  3,400  7,428  6,400  
Restructuring Charges633  —  633  —  
10,586  15,173  19.1 %16.6 %19,665  28,722  15.0 %16.0 %
Corporate General and Administrative Expenses(1)
Operating loss
(6,627) (8,081) (13,513) (14,963) 
Depreciation and Amortization
64  73  136  326  
Stock-Based Compensation Expense2,250  1,807  4,529  3,271  
(4,313) (6,201) (8,848) (11,366) 
Adjusted EBITDA
$20,263  $22,415  13.8 %12.4 %$43,504  $43,482  13.6 %12.3 %
Capital Expenditures
Electronic Systems$2,117  $2,216  $2,932  $3,052  
Structural Systems467  3,672  2,604  7,361  
Corporate Administration—  —  —  —  
Total Capital Expenditures$2,584  $5,888  $5,536  $10,413  
(1)Includes costs not allocated to either the Electronic Systems or Structural Systems operating segments.


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DUCOMMUN INCORPORATED AND SUBSIDIARIES
GAAP TO NON-GAAP OPERATING INCOME RECONCILIATION
(Unaudited)
(Dollars in thousands)

Three Months EndedSix Months Ended
GAAP To Non-GAAP Operating IncomeJune 27, 2020June 29, 2019%
of Net  Revenues
2020
%
of Net  Revenues
2019
June 27, 2020June 29, 2019%
of Net  Revenues
2020
%
of Net  Revenues
2019
GAAP Operating income$10,025  $13,604  $23,651  $26,452  
GAAP Operating income - Electronic Systems$10,438  $9,912  $25,560  $19,093  
Adjustments:
Restructuring charges28  —  28  —  
Adjusted operating income - Electronic Systems10,466  9,912  11.4 %11.1 %25,588  19,093  13.5 %11.0 %
GAAP Operating income - Structural Systems6,214  11,773  11,604  22,322  
Adjustments:
Restructuring charges633  —  633  —  
Adjusted operating income - Structural Systems6,847  11,773  12.4 %12.9 %12,237  22,322  9.4 %12.4 %
GAAP Operating loss - Corporate(6,627) (8,081) (13,513) (14,963) 
Adjustment:
Restructuring charges—  —  —  —  
Adjusted operating loss - Corporate(6,627) (8,081) (13,513) (14,963) 
Total adjustments661  —  661  —  
Adjusted operating income$10,686  $13,604  7.3 %7.5 %$24,312  $26,452  7.6 %7.5 %

8


DUCOMMUN INCORPORATED AND SUBSIDIARIES
GAAP TO NON-GAAP EARNINGS AND EARNINGS PER SHARE RECONCILIATION
(Unaudited)
(Dollars in thousands, except per share amounts)

Three Months EndedSix Months Ended
GAAP To Non-GAAP EarningsJune 27,
2020
June 29,
2019
June 27,
2020
June 29,
2019
GAAP Net income$5,090  $7,815  $13,020  $15,287  
Adjustments:
Restructuring charges (1)535  —  535  —  
Total adjustments535  —  535  —  
Adjusted net income$5,625  $7,815  $13,555  $15,287  


Three Months EndedSix Months Ended
GAAP Earnings Per Share To Non-GAAP Earnings Per ShareJune 27,
2020
June 29,
2019
June 27,
2020
June 29,
2019
GAAP Diluted earnings per share (“EPS”)$0.43  $0.66  $1.10  $1.30  
Adjustments:
Restructuring charges (1)0.05  —  0.05  —  
Total adjustments0.05  —  0.05  —  
Adjusted diluted EPS$0.48  $0.66  $1.15  $1.30  
Shares used for adjusted diluted EPS11,82811,75811,84511,754
(1) Includes effective tax rate of 19.0% for 2020 adjustments.

9


DUCOMMUN INCORPORATED AND SUBSIDIARIES
NON-GAAP BACKLOG* BY REPORTING SEGMENT
(Unaudited)
(Dollars in thousands)
 
(In thousands)
June 27,
2020
December 31,
2019
Consolidated Ducommun
Military and space$505,189  $451,293  
Commercial aerospace306,874  430,642  
Industrial18,597  28,286  
Total$830,660  $910,221  
Electronic Systems
Military and space$356,046  $311,027  
Commercial aerospace68,336  75,719  
Industrial18,597  28,286  
Total$442,979  $415,032  
Structural Systems
Military and space$149,143  $140,266  
Commercial aerospace238,538  354,923  
Total$387,681  $495,189  
* The Company defines backlog as potential revenue and is based on customer placed purchase orders and long-term agreements (“LTAs”) with firm fixed price and expected delivery dates of 24 months or less. Backlog as of as of June 27, 2020 was $830.7 million compared to $910.2 million as of December 31, 2019. Under ASC 606, the Company defines remaining performance obligations as customer placed purchase orders with firm fixed price and firm delivery dates. The remaining performance obligations disclosed under ASC 606 were $732.2 million.

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