dco-20240215
0000030305FALSE00000303052024-02-152024-02-15

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): February 15, 2024
____________________________
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 February 15, 2024 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: February 15, 2024
 By:/s/ Suman B. Mookerji
 Suman B. Mookerji
 Senior Vice President, Chief Financial Officer


Document

EXHIBIT 99.1
https://cdn.kscope.io/c1ef15883b5a4d8382b1da10f67d1e7d-dcoaddressonly2618a01.jpg
https://cdn.kscope.io/c1ef15883b5a4d8382b1da10f67d1e7d-dcologoonly2618a01.jpg
NEWS RELEASE
Ducommun Incorporated Reports
Fourth Quarter 2023 Results
New All Time Highs for Revenue and Adjusted EBITDA in 2023 of
$757 Million and $102 Million, Respectively
SANTA ANA, CALIFORNIA (February 15, 2024) – Ducommun Incorporated (NYSE: DCO) (“Ducommun” or the “Company”) today reported results for its fourth quarter and year ended December 31, 2023.
Fourth Quarter 2023 Recap

Revenue of $192.2 million
GAAP net income of $5.1 million, or $0.34 per diluted share
Adjusted net income for the quarter of $10.4 million, or $0.70 per diluted share
Cash flow from operating activities of $26.5 million
“I am very happy to report that the Company reached an all time revenue record in 2023 with the previous high-level mark set in 2012. Q4 numbers were also very good as we continue the top-line growth story for Ducommun, led once again by a strong commercial aerospace market recovery,” said Stephen G. Oswald, chairman, president and chief executive officer. “Quarterly revenue exceeded $190 million for the second consecutive quarter and increased to approximately $192 million, driving record full year revenue of $757 million. Gross margins for the quarter grew 120 bps year-over-year to 21.7% and 130 bps for the full year to 21.6%, as we began realizing some of the benefits from our strategic pricing initiatives and productivity improvements including revenue per employee increasing 16% for the full year 2023 compared to 2022.
“Ducommun also ended the year with a solid backlog* of approximately $994 million, with military and space backlog being a bright spot, up $70 million to $527 million from 2022. Looking ahead to 2024, the record order bookings and the anticipated growth in production rates at both Boeing and Airbus should provide continued tailwind to our commercial aerospace business. The significant growth in backlog in our military and space business and our continued success with off-loading initiatives should be a catalyst for growth in our defense business. The Company had a record year in 2023 and 2024 is shaping up to be another strong year as Ducommun also celebrates its 175th continuous year in business since being founded in 1849.”
Fourth Quarter Results
Net revenue for the fourth quarter of 2023 was $192.2 million, compared to $188.3 million for the fourth quarter of 2022. The 2.1% increase year-over-year was primarily due to the following:
$12.1 million higher revenue within the Company’s commercial aerospace end-use markets due to higher build rates on large aircraft platforms and rotary-wing aircraft platforms, partially offset by lower build rates on other commercial aerospace platforms; partially offset by
$5.6 million lower revenue within the Company’s military and space end-use markets due to lower build rates on various missile platforms and military fixed-wing aircraft platforms, partially offset by higher build rates on military rotary-wing aircraft platforms and other military and space platforms.
Net income for the fourth quarter of 2023 was $5.1 million, or $0.34 per diluted share, compared to $8.1 million, or $0.65 per diluted share, for the fourth quarter of 2022. The decrease in net income year-over-year was primarily due to higher selling, general and administrative (“SG&A”) expenses of $5.0 million, lower other income, net of $2.1



million, and higher interest expense of $1.9 million, partially offset by higher gross profit of $3.1 million, and lower income tax expense of $1.8 million. The higher SG&A expenses were due to BLR Aerospace L.L.C. (“BLR”) expenses of $4.7 million (96% of the total increase in SG&A expenses) which did not exist in the prior year period as the acquisition of BLR was completed during Q2 2023. Adjusted net income was $10.4 million, or $0.70 per diluted share, for the fourth quarter of 2023, compared to $10.6 million, or $0.85 per diluted share, for the fourth quarter of 2022.
Gross profit for the fourth quarter of 2023 was $41.7 million, or 21.7% of revenue, compared to gross profit of $38.6 million, or 20.5% of revenue, for the fourth quarter of 2022. The increase in gross margin percentage year-over-year was primarily due to favorable product mix and favorable manufacturing volume, partially offset by higher other manufacturing costs.
Operating income for the fourth quarter of 2023 was $8.9 million, or 4.6% of revenue, compared to $9.7 million, or 5.1% of revenue, in the comparable period last year. The year-over-year decrease was primarily due to higher SG&A expenses, partially offset by higher gross profit, both of which were noted above. Adjusted operating income for the fourth quarter of 2023 was $15.9 million, or 8.3% of revenue, compared to $15.2 million, or 8.1% of revenue, in the comparable period last year.
Interest expense for the fourth quarter of 2023 was $5.4 million compared to $3.5 million in the comparable period of 2022. The year-over-year increase was primarily due to higher interest rates and a higher outstanding debt balance.
Adjusted EBITDA for the fourth quarter of 2023 was $23.0 million, or 12.0% of revenue, compared to $24.5 million, or 13.0% of revenue, for the comparable period in 2022. The Adjusted EBITDA was impacted by the loss of manufacturing volume and inefficiencies at our Monrovia, California and Berryville, Arkansas performance centers as we wind down their operations.
During the fourth quarter of 2023, the net cash provided by operations was $26.5 million compared to $32.1 million during the fourth quarter of 2022. The lower net cash provided by operations year-over-year was primarily due to lower accounts payable, lower accrued and other liabilities mainly due to tax payments made, and lower net income, partially offset by lower inventories and lower contract assets.
* 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 December 31, 2023 was $993.6 million compared to $960.8 million as of December 31, 2022. Under ASC 606, the Company defines performance obligations as customer placed purchase orders with firm fixed price and firm delivery dates. The remaining performance obligations under ASC 606 as of December 31, 2023 were $963.5 million compared to $853.0 million as of December 31, 2022.
Business Segment Information
Electronic Systems
Electronic Systems reported net revenue for the current quarter of $106.7 million, compared to $120.0 million for the fourth quarter of 2022. The year-over-year decrease was primarily due to the following:
$10.6 million lower revenue within the Company’s military and space end-use markets due to lower build rates on various missile platforms and military fixed-wing aircraft platforms; and
$0.3 million lower revenue within the Company’s commercial aerospace end-use markets.
Electronic Systems operating income for the current year fourth quarter was $9.8 million, or 9.2% of revenue, compared to $13.0 million, or 10.8% of revenue, for the comparable quarter in 2022. The year-over-year decrease was primarily due to unfavorable product mix and the loss of manufacturing volume and inefficiencies at our Berryville performance center as we wind down their operations, partially offset by lower restructuring charges. Adjusted operating income for the fourth quarter of 2023 was $10.9 million, or 10.2% of revenue, compared to $15.5 million, or 12.9% of revenue, in the comparable period last year.
Structural Systems
Structural Systems reported net revenue for the current quarter of $85.6 million, compared to $68.2 million for the fourth quarter of 2022. The year-over-year increase was primarily due to the following:



$12.3 million higher revenue within the Company’s commercial aerospace end-use markets due to higher build rates on large aircraft platforms and regional and business aircraft platforms, partially offset by lower build rates on other commercial aerospace platforms; and
$5.0 million higher revenue within the Company’s military and space end-use markets due to higher build rates on military rotary-wing aircraft platforms, a portion of which was related to BLR, partially offset by lower build rates on various missile platforms.
Structural Systems operating income for the current-year fourth quarter was $6.6 million, or 7.7% of revenue, compared to $4.4 million, or 6.4% of revenue, for the fourth quarter of 2022. The year-over-year increase was primarily due to favorable product mix and favorable manufacturing volume, partially offset by higher other manufacturing costs. Adjusted operating income for the fourth quarter of 2023 was $12.5 million, or 14.6% of revenue, compared to $7.4 million, or 10.8% of revenue, in the comparable period last year.
Corporate General and Administrative (“CG&A”) Expense
CG&A expense for the fourth quarter of 2023 was $7.5 million, or 3.9% of total Company revenue, compared to $7.7 million, or 4.1% of total Company revenue, in the comparable quarter in the prior year.
Conference Call
A teleconference hosted by Stephen G. Oswald, the Company’s chairman, president and chief executive officer, and Suman B. Mookerji, the Company’s senior vice president, chief financial officer will be held today, February 15, 2024, at 10:00 a.m. PT (1:00 p.m. ET) to review these financial results. To access the conference call, please pre-register using the following registration link:
https://register.vevent.com/register/BI4ed1636063724d6f83ac25f5e5aae26d
Registrants will receive a confirmation with dial-in details. Mr. Oswald and Mr. Mookerji will be speaking on behalf of the Company and anticipate the call (including Q&A) to last approximately 45 minutes. A live webcast of the event can be accessed using the link above. A replay of the webcast will be available on the Ducommun website at Ducommun.com.
Additional information regarding Ducommun's results can be found in the Q4 2023 Earnings Presentation available at Ducommun.com.
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, any statements about the anticipated growth in commercial aerospace build rates and expected continued success with offloading initiatives to grow our defense business. The Company generally uses the words “may,” “will,” “could,” “should,” “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: the impact of the Company’s debt service obligations and restrictive debt covenants; the cyclicality of the Company’s end-use markets; the Company's ability to generate sufficient amounts of cash to run the business; the Company's dependence upon a selected base of industries and customers; a significant portion of the Company’s business being dependent upon U.S. Government defense spending; the Company's ability to obtain necessary export approvals and licenses for proposed sales to foreign customers; the Company being subject to extensive regulation and audit by the Defense Contract Audit Agency; some of the Company’s contracts with customers containing provisions which give the its customers a variety of rights that are unfavorable to the Company; further consolidation in the aerospace industry adversely affecting 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's reliance on its suppliers to meet the quality and delivery expectations of its customers; the Company's use of 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 such as the Cybersecurity Maturity Model Certification applicable to government contracts and sub-contracts, and environmental, social and governance requirements; the Company's ability to attract and retain key personnel and avoid labor disruptions; the impact of existing and future accounting standards and tax rules and regulations; the potential for environmental liabilities and litigation matters being resolved adversely against the Company may negatively affect the Company’s financial results; cyber security attacks, internal system or service failures, which may adversely impact the Company’s business and operations; the Company's ability to adequately protect and enforce its intellectual property rights; 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 facilitate commercial aerospace end-use markets' recovery from those impacts, 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, February 15, 2024, or 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, restructuring charges, Guaymas fire related expenses, other fire related expenses, insurance recoveries related to loss on operating assets, insurance recoveries related to business interruption, inventory purchase accounting adjustments, loss on extinguishment of debt, and other debt refinancing costs), non-GAAP operating income and as a percentage of net revenues, non-GAAP earnings, non-GAAP earnings per share, and backlog. In addition, certain other prior period amounts have been reclassified to conform to current year’s presentation.
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.
CONTACT:
Suman Mookerji, Senior Vice President, Chief Financial Officer, 657.335.3665
[Financial Tables Follow]




DUCOMMUN INCORPORATED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars In thousands)
 
December 31,
2023
December 31,
2022
Assets
Current Assets
Cash and cash equivalents$42,863 $46,246 
Accounts receivable, net104,692 103,958 
Contract assets177,686 191,290 
Inventories199,201 171,211 
Production cost of contracts7,778 5,693 
Other current assets17,349 8,938 
Total Current Assets549,569 527,336 
Property and Equipment, Net111,379 106,225 
Operating lease right-of-use assets29,513 34,632 
Goodwill244,600 203,407 
Intangibles, Net166,343 127,201 
Deferred Income Taxes641 — 
Other Assets18,874 22,705 
Total Assets$1,120,919 $1,021,506 
Liabilities and Shareholders’ Equity
Current Liabilities
Accounts payable$72,265 $90,143 
Contract liabilities53,492 47,068 
Accrued and other liabilities42,260 48,820 
Operating lease liabilities7,873 7,155 
Current portion of long-term debt7,813 6,250 
Total Current Liabilities183,703 199,436 
Long-Term Debt, Less Current Portion256,961 240,595 
Non-Current Operating Lease Liabilities22,947 28,841 
Deferred Income Taxes4,766 13,953 
Other Long-Term Liabilities16,448 12,721 
Total Liabilities484,825 495,546 
Commitments and Contingencies
Shareholders’ Equity
Common stock146 121 
Additional paid-in capital206,197 112,042 
Retained earnings421,980 406,052 
Accumulated other comprehensive income7,771 7,745 
Total Shareholders’ Equity636,094 525,960 
Total Liabilities and Shareholders’ Equity$1,120,919 $1,021,506 




DUCOMMUN INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Quarterly Information Unaudited)
(Dollars in thousands, except per share amounts)
 
 Three Months EndedYears Ended
 December 31,
2023
December 31,
2022
December 31,
2023
December 31,
2022
Net Revenues$192,231 $188,268 $756,992 $712,537 
Cost of Sales150,535 149,675 593,805 568,240 
Gross Profit41,696 38,593 163,187 144,297 
Selling, General and Administrative Expenses30,973 26,011 119,728 98,351 
Restructuring Charges1,792 2,888 14,542 6,158 
Operating Income8,931 9,694 28,917 39,788 
Interest Expense(5,449)(3,515)(20,773)(11,571)
Loss on Extinguishment of Debt— — — (295)
Other Income, Net290 2,400 8,235 5,400 
Income Before Taxes3,772 8,579 16,379 33,322 
Income Tax (Benefit) Expense(1,338)498 451 4,533 
Net Income$5,110 $8,081 $15,928 $28,789 
Earnings Per Share
Basic earnings per share$0.35 $0.67 $1.16 $2.38 
Diluted earnings per share$0.34 $0.65 $1.14 $2.33 
Weighted-Average Number of Common Shares Outstanding
Basic14,636 12,124 13,717 12,074 
Diluted14,890 12,423 13,972 12,366 
Gross Profit %21.7 %20.5 %21.6 %20.3 %
SG&A %16.1 %13.8 %15.8 %13.8 %
Operating Income %4.6 %5.1 %3.8 %5.6 %
Net Income %2.7 %4.3 %2.1 %4.0 %
Effective Tax (Benefit) Rate(35.5)%5.8 %2.8 %13.6 %




DUCOMMUN INCORPORATED AND SUBSIDIARIES
BUSINESS SEGMENT PERFORMANCE
(Unaudited)
(Dollars in thousands)
 Three Months EndedYears Ended
 %
Change
December 31, 2023December 31, 2022% of Net  Revenues
2023
% of Net  Revenues
2022
%
Change
December 31, 2023December 31, 2022% of Net  Revenues
2023
% of Net  Revenues
2022
Net Revenues
Electronic Systems(11.1)%$106,679 $120,036 55.5 %63.8 %(2.4)%$430,136 $440,638 56.8 %61.8 %
Structural Systems25.4 %85,552 68,232 44.5 %36.2 %20.2 %326,856 271,899 43.2 %38.2 %
Total Net Revenues2.1 %$192,231 $188,268 100.0 %100.0 %6.2 %$756,992 $712,537 100.0 %100.0 %
Segment Operating Income
Electronic Systems$9,837 $12,974 9.2 %10.8 %$42,086 $49,876 9.8 %11.3 %
Structural Systems6,587 4,386 7.7 %6.4 %23,460 17,225 7.2 %6.3 %
16,424 17,360 65,546 67,101 
Corporate General and Administrative Expenses (1)
(7,493)(7,666)(3.9)%(4.1)%(36,629)(27,313)(4.8)%(3.8)%
Total Operating Income$8,931 $9,694 4.6 %5.1 %$28,917 $39,788 3.8 %5.6 %
Adjusted EBITDA
Electronic Systems
Operating Income$9,837 $12,974 $42,086 $49,876 
Other Income— — 222 — 
Depreciation and Amortization3,650 3,474 14,276 13,974 
Stock-Based Compensation Expense141 165 462 186 
Restructuring Charges673 2,162 6,412 3,786 
14,301 18,775 13.4 %15.6 %63,458 67,822 14.8 %15.4 %
Structural Systems
Operating Income6,587 4,386 23,460 17,225 
Depreciation and Amortization4,441 4,553 18,060 17,212 
Stock-Based Compensation Expense128 89 387 163 
Restructuring Charges1,221 726 8,334 2,900 
Inventory Purchase Accounting Adjustments2,724 — 5,531 1,381 
Guaymas Fire Related Expenses— 1,015 3,896 4,466 
Other Fire Related Expenses— — 477 — 
15,101 10,769 17.7 %15.8 %60,145 43,347 18.4 %15.9 %
Corporate General and Administrative Expenses (1)
Operating loss (7,493)(7,666)(36,629)(27,313)
Depreciation and Amortization59 59 235 235 
Stock-Based Compensation Expense1,007 2,586 14,196 10,395 
Restructuring Charges23 — 109 — 
Other Debt Refinancing Costs— — — 224 
(6,404)(5,021)(22,089)(16,459)
Adjusted EBITDA$22,998 $24,523 12.0 %13.0 %$101,514 $94,710 13.4 %13.3 %
Capital Expenditures
Electronic Systems$1,255 $2,886 $6,007 $10,717 
Structural Systems2,084 1,801 13,127 8,834 
Corporate Administration— — — — 
Total Capital Expenditures$3,339 $4,687 $19,134 $19,551 
(1)Includes costs not allocated to either the Electronic Systems or Structural Systems operating segments.



DUCOMMUN INCORPORATED AND SUBSIDIARIES
GAAP TO NON-GAAP OPERATING INCOME AND AS A PERCENTAGE OF NET REVENUES RECONCILIATION
(Unaudited)
(Dollars in thousands)
 
 Three Months EndedYears Ended
GAAP To Non-GAAP Operating IncomeDecember 31,
2023
December 31,
2022
%
of Net  Revenues
2023
%
of Net  Revenues
2022
December 31,
2023
December 31,
2022
%
of Net  Revenues
2023
%
of Net  Revenues
2022
GAAP Operating income$8,931 $9,694 $28,917 $39,788 
GAAP Operating income - Electronic Systems$9,837 $12,974 $42,086 $49,876 
Adjustments:
Other income— — 222 — 
Restructuring charges673 2,162 6,412 3,786 
Amortization of acquisition-related intangible assets373 373 1,493 1,493 
Adjusted operating income - Electronic Systems10,883 15,509 10.2 %12.9 %50,213 55,155 11.7 %12.5 %
GAAP Operating income - Structural Systems6,587 4,386 23,460 17,225 
Adjustments:
Restructuring charges1,221 726 8,334 2,900 
Inventory purchase accounting adjustments2,724 — 5,531 1,381 
Guaymas fire related expenses— 1,015 3,896 4,466 
Other fire related expenses— — 477 — 
Amortization of acquisition-related intangible assets1,922 1,237 6,795 4,956 
Adjusted operating income - Structural Systems12,454 7,364 14.6 %10.8 %48,493 30,928 14.8 %11.4 %
GAAP Operating loss - Corporate(7,493)(7,666)(36,629)(27,313)
Adjustment:
Restructuring charges23 — 109 — 
Other debt refinancing costs— — — 224 
Adjusted operating loss - Corporate(7,470)(7,666)(36,520)(27,089)
Total adjustments6,936 5,513 33,269 19,206 
Adjusted operating income$15,867 $15,207 8.3 %8.1 %$62,186 $58,994 8.2 %8.3 %




DUCOMMUN INCORPORATED AND SUBSIDIARIES
GAAP TO NON-GAAP EARNINGS AND EARNINGS PER SHARE RECONCILIATION
(Unaudited)
(Dollars in thousands, except per share amounts)
 
 Three Months EndedYears Ended
GAAP To Non-GAAP EarningsDecember 31,
2023
December 31,
2022
December 31,
2023
December 31,
2022
GAAP Net income$5,110 $8,081 $15,928 $28,789 
  Adjustments:
Restructuring charges (1)
1,534 2,310 11,884 5,349 
Guaymas fire related expenses (1)
— 812 3,117 3,573 
Other fire related expenses (1)
— — 382 — 
Insurance recoveries related to loss on operating assets (1)
(129)— (4,579)— 
Insurance recoveries related to business interruption (1)
(103)(1,920)(1,831)(4,320)
Inventory purchase accounting adjustments (1)
2,179 — 4,425 1,105 
Amortization of acquisition-related intangible assets (1)
1,836 1,288 6,630 5,159 
Loss on extinguishment of debt (1)
— — — 236 
Other debt refinancing costs (1)
— — — 179 
      Total adjustments5,317 2,490 20,028 11,281 
Adjusted net income$10,427 $10,571 $35,956 $40,070 
 Three Months EndedYears Ended
GAAP Earnings Per Share To Non-GAAP Earnings Per ShareDecember 31,
2023
December 31,
2022
December 31,
2023
December 31,
2022
GAAP Diluted Earnings Per Share (“EPS”)$0.34 $0.65 $1.14 $2.33 
  Adjustments:
Restructuring charges (1)
0.11 0.19 0.85 0.43 
Guaymas fire related expenses (1)
— 0.06 0.22 0.29 
Other fire related expenses (1)
— — 0.03 — 
Insurance recoveries related to loss on operating assets (1)
(0.01)— (0.33)— 
Insurance recoveries related to business interruption (1)
(0.01)(0.15)(0.13)(0.35)
Inventory purchase accounting adjustments (1)
0.15 — 0.32 0.09 
Amortization of acquisition-related intangible assets (1)
0.12 0.10 0.47 0.42 
Loss on extinguishment of debt (1)
— — — 0.02 
Other debt refinancing costs (1)
— — — 0.01 
      Total adjustments0.36 0.20 1.43 0.91 
Adjusted Diluted EPS$0.70 $0.85 $2.57 $3.24 
Shares used for adjusted diluted EPS14,890 12,423 13,972 12,366 
(1)Includes effective tax rate of 20.0% for both 2023 and 2022 adjustments.



DUCOMMUN INCORPORATED AND SUBSIDIARIES
NON-GAAP BACKLOG* BY REPORTING SEGMENT
(Unaudited)
(Dollars in thousands)
 
(In thousands)
December 31,
2023
December 31,
2022
Consolidated Ducommun
Military and space$527,143 $457,354 
Commercial aerospace429,494 450,092 
Industrial36,931 53,374 
Total$993,568 $960,820 
Electronic Systems
Military and space$397,681 $361,582 
Commercial aerospace87,994 125,590 
Industrial36,931 53,374 
Total$522,606 $540,546 
Structural Systems
Military and space$129,462 $95,772 
Commercial aerospace341,500 324,502 
Total$470,962 $420,274 
* 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 December 31, 2023 was $993.6 million compared to $960.8 million as of December 31, 2022. Under ASC 606, the Company defines performance obligations as customer placed purchase orders with firm fixed price and firm delivery dates. The remaining performance obligations under ASC 606 as of December 31, 2023 were $963.5 million compared to $853.0 million as of December 31, 2022.