EX-99.1 2 dex991.htm PRESS RELEASE Press Release

EXHIBIT 99.1

 

LOGO   

 

CONTACT:    Joseph C. Berenato
   Chairman, President and Chief Executive Officer
   (310) 513-7209

FOR IMMEDIATE RELEASE

DUCOMMUN INCORPORATED REPORTS RESULTS

FOR THE SECOND QUARTER ENDED JUNE 30, 2007

LOS ANGELES, California (July 30, 2007) - Ducommun Incorporated (NYSE: DCO) today reported results for its second quarter ended June 30, 2007.

Sales for the second quarter of 2007 were $91.1 million, compared to $77.5 million for the second quarter of 2006. Net income for the second quarter of 2007 was $4.6 million, or $0.44 per diluted share, compared to net income of $3.2 million, or $0.31 per diluted share, for the same period last year.

Sales for the second quarter of 2007 increased 18% from the same period last year primarily due to a strong increase in commercial sales. The Company’s mix of business in the second quarter of 2007 was approximately 61% military, 37% commercial and 2% space, compared to 67% military, 32% commercial and 1% space in the second quarter of 2006.

Gross profit, as a percentage of sales, increased to 21.7% in the second quarter of 2007 from 19.7% in the second quarter of 2006. Selling, general and administrative (SG&A) expenses, as a percentage of sales, increased to 13.3% in the second quarter of 2007 from 12.4% in the second quarter of 2006. The increase in SG&A expenses, as a percentage of sales, was primarily the result of higher bonus accruals in 2007 and the expenses of the CMP business which was acquired in the third quarter of 2006.

Net income for the second quarter of 2007 increased 44% from the second quarter of 2006 primarily due to the reasons stated above and a lower effective tax rate, partially offset by higher interest expense in the second quarter of 2007. The Company’s effective tax rate for the second quarter of 2007 was 33.7% compared to 36.3% in the second quarter of 2006.


Sales for the first six months of 2007 were $179.2 million, compared to $149.6 million for the first six months of 2006. Net income for the first six months of 2007 was $8.4 million, or $0.80 per diluted share, compared to net income of $5.9 million, or $0.58 per diluted share, for the comparable period last year.

Sales for the first six months of 2007 increased 20% from the same period last year primarily due to a strong increase in commercial sales. The Company’s mix of business in the first six months of 2007 was approximately 61% military, 37% commercial and 2% space, compared to 67% military, 32% commercial and 1% space in the first six months of 2006.

Gross profit, as a percentage of sales, increased to 21.4% in the first six months of 2007 from 19.9% in the first six months of 2006. SG&A expenses, as a percentage of sales, increased to 13.6% in the first six months of 2007 from 12.9% in the first six months of 2006. The increase in SG&A expenses, as a percentage of sales, was primarily the result of higher bonus accruals in 2007 and the expenses of the WiseWave and CMP businesses which were acquired in the second and third quarters of 2006, respectively.

Net income for the first six months of 2007 increased 41% from the first six months of 2006 primarily due to the reasons stated above and a lower effective tax rate, partially offset by higher interest expense in the first six months of 2007. The Company’s effective tax rate for the first six months of 2007 was 33.0% compared to 36.5% in the first six months of 2006.

Joseph C. Berenato, chairman, president and chief executive officer, stated, “We continue to benefit from healthy aerospace markets and the success of our Lean and Six Sigma initiatives. As a result, we are enjoying growth in new business opportunities and a broadening of our customer base. We expect to complement this internal growth with continuing acquisitions which will help us enhance our product offering and increase our design and manufacturing engineering capabilities. We are driving Ducommun forward through our key initiatives of One Company, Operational Excellence and Profitable Growth in order to become a global partner to our key customers. Our recently announced manufacturing facility in Guaymas, Mexico will complement our Thailand facility and is a further indication of our efforts to support our customer base.”


Founded in 1849, Ducommun Incorporated provides engineering and manufacturing services to the aerospace and defense industry.

A teleconference with Joseph C. Berenato, the Company’s chairman, president and chief executive officer, and Gregory A. Hann, the Company’s vice president, chief financial officer and treasurer, will be held today at 7:30 AM PT (10:30 AM ET). To participate in the teleconference, please call 866-202-3048 (international 617-213-8843) approximately ten minutes prior to the conference time stated above. The participant passcode is 68596280. Mr. Berenato and Mr. Hann will be speaking on behalf of the company and anticipate the meeting and Q&A period to last approximately 40 minutes.

This call is being webcast by Thomson/CCBN and can be accessed at Ducommun’s web site at www.ducommun.com. Conference call replay will be available from the Company’s web site at www.ducommun.com.

The statements made in this press release include forward-looking statements that involve risks and uncertainties. The Company’s future financial results could differ materially from those anticipated due to the Company’s dependence on conditions in the airline industry, the level of new commercial aircraft orders, production rates for Boeing commercial aircraft, the C-17 and Apache helicopter rotor blade programs, the level of defense spending, competitive pricing pressures, manufacturing inefficiencies, start-up costs and possible overruns on new contracts, technology and product development risks and uncertainties, product performance, risks associated with acquisitions and dispositions of businesses by the Company, increasing consolidation of customers and suppliers in the aerospace industry, possible goodwill impairment, availability of raw materials and components from suppliers, and other factors beyond the Company’s control. See the Company’s Form 10-K for the year ended December 31, 2006 and Form 10-Q for the quarter ended June 30, 2007 for a more detailed discussion of these and other risk factors and contingencies.

[Financial Table Follows]


DUCOMMUN INCORPORATED AND SUBSIDIARIES

COMPARATIVE DATA

CONSOLIDATED INCOME STATEMENT

 

     Three Months Ended     Six Months Ended  
     June 30, 2007     July 1, 2006     June 30, 2007     July 1, 2006  

Net Sales

   $ 91,104,000     $ 77,480,000     $ 179,156,000     $ 149,638,000  
                                

Operating Costs and Expenses:

        

Cost of Goods Sold

     71,310,000       62,255,000       140,885,000       119,896,000  

Selling, General &

Administrative Expenses

     12,134,000       9,599,000       24,360,000       19,235,000  
                                

Total

     83,444,000       71,854,000       165,245,000       139,131,000  
                                

Operating Income

     7,660,000       5,626,000       13,911,000       10,507,000  

Interest Expense

     (765,000 )     (649,000 )     (1,417,000 )     (1,164,000 )

Income Tax Expense

     (2,324,000 )     (1,809,000 )     (4,123,000 )     (3,413,000 )
                                

Net Income

   $ 4,571,000     $ 3,168,000     $ 8,371,000     $ 5,930,000  
                                

Earnings Per Share:

        

Basic Earnings Per Share

   $ 0.44     $ 0.31     $ 0.81     $ 0.58  

Diluted Earnings Per Share

     0.44       0.31       0.80       0.58  

Weighted Averaged Number of

        

Common Shares Outstanding:

        

Basic

     10,361,000       10,222,000       10,331,000       10,178,000  

Diluted

     10,474,000       10,312,000       10,436,000       10,266,000  

- more -


DUCOMMUN INCORPORATED AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

 

    

(Unaudited)

June 30, 2007

    December 31, 2006  

Assets

    

Current Assets:

    

Cash and cash equivalents

     559       378  

Accounts receivable, less allowance for doubtful accounts

     45,504       42,658  

Unbilled receivables

     3,883       3,482  

Inventories

     74,877       64,587  

Deferred income taxes

     6,099       6,116  

Other current assets

     4,889       5,521  
                

Total Current Assets

     135,811       122,742  

Property and Equipment, Net

     54,030       52,987  

Goodwill, Net

     106,632       106,628  

Other Assets

     13,431       14,676  
                
   $ 309,904     $ 297,033  
                

Liabilities and Shareholders’ Equity

    

Current Liabilities:

    

Current portion of long-term debt

   $ 1,851     $ 1,196  

Accounts payable

     22,040       32,948  

Accrued liabilities

     32,207       33,243  
                

Total Current Liabilities

     56,098       67,387  

Long-Term Debt, Less Current Portion

     39,918       29,240  

Deferred Income Taxes

     5,477       6,670  

Other Long-Term Liabilities

     9,900       6,711  
                

Total Liabilities

     111,393       110,008  
                

Commitments and Contingencies

    

Shareholders’ Equity:

    

Common Stock

     104       103  

Additional paid-in-capital

     49,107       46,320  

Retained earnings

     150,941       142,760  

Accumulated other comprehensive loss

     (1,641 )     (2,158 )
                

Total Shareholders’ Equity

     198,511       187,025  
                
   $ 309,904     $ 297,033  
                

###