EX-99.1 2 dex991.htm DUCOMMUN INC. PRESS RELEASE ISSUED ON JULY 28, 2008 Ducommun Inc. press release issued on July 28, 2008
LOGO   EXHIBIT 99.1

 

CONTACT:

   Joseph C. Berenato
   Chairman and Chief Executive Officer
   (310) 513-7209

FOR IMMEDIATE RELEASE

DUCOMMUN INCORPORATED REPORTS RESULTS

FOR THE SECOND QUARTER ENDED JUNE 28, 2008

LOS ANGELES, California (July 28, 2008) – Ducommun Incorporated (NYSE: DCO) today reported results for its second quarter ended June 28, 2008.

Sales for the second quarter of 2008 were $102.9 million, compared to $91.1 million for the second quarter of 2007. Net income for the second quarter of 2008 was $5.8 million, or $0.55 per diluted share, compared to net income of $4.6 million, or $0.44 per diluted share, for the same period last year.

Sales for the second quarter of 2008 increased 13% from the same period last year primarily due to an increase in both military and commercial sales. The Company’s mix of business in the second quarter of 2008 was approximately 58% military, 40% commercial and 2% space, compared to 61% military, 37% commercial and 2% space in the second quarter of 2007.

Gross profit, as a percentage of sales, was 21.1% in the second quarter of 2008 and 21.7% in the second quarter of 2007. The gross profit margin decrease was primarily attributable to lower operating performance at Ducommun Technologies, Inc. (DTI), partially offset by an improvement in operating performance at Ducommun AeroStructures, Inc. (DAS). Selling, general and administrative (SG&A) expenses were $12.1 million, or 11.7% as a percentage of sales, in the second quarter of 2008 and $12.1 million, or 13.3% as a percentage of sales, in the second quarter of 2007.

Net income for the second quarter of 2008 increased 28% from the second quarter of 2007 primarily due to the reasons stated above and lower interest expense, partially offset by a higher effective tax rate in the second quarter of 2008. The Company’s effective tax rate for the second quarter of 2008 was 36.8%, compared to 33.7% in the second quarter of 2007.

Sales for the first six months of 2008 were $201.5 million, compared to $179.2 million for the first six months of 2007. Net income for the first six months of 2008 was $11.1 million, or $1.04 per diluted share, compared to net income of $8.4 million, or $0.80 per diluted share, for the comparable period last year.

Sales for the first six months of 2008 increased 12% from the same period last year primarily due to an increase in both military and commercial sales. The Company’s mix of business in the first six months of 2008 was approximately 58% military, 40% commercial and 2% space, compared to 61% military, 37% commercial and 2% space in the first six months of 2007.

Gross profit, as a percentage of sales, was 21.1% in the first six months of 2008 and 21.4% in the first six months of 2007. The gross profit margin decrease was primarily attributable to lower operating performance at DTI, partially offset by an improvement in operating performance at DAS. SG&A expenses were $24.5 million, or 12.1% as a percentage of sales, in the first six months of 2008 and $24.4 million, or 13.6% as a percentage of sales, in the first six months of 2007.

Net income for the first six months of 2008 increased 32% from the first six months of 2007 primarily due to the reasons stated above and lower interest expense, partially offset by a higher effective tax rate in the first six months of 2008. The Company’s effective tax rate for the first six months of 2008 was 36.8%, compared to 33.0% in the first six months of 2007.

Joseph C. Berenato, chairman and chief executive officer, stated, “Our strong financial performance is a reflection of our drive for continuous improvement to increase our efficiency and quality through the use of Lean and Six Sigma. In January, we announced a major reorganization aimed at creating a “One Ducommun” mindset and organizational structure to spur creativity and common processes across the Company. This effort has been well received by our Team Members and has helped to propel the Company forward.”


Mr. Berenato continued, “We are striving to make Ducommun more capable and more important to our key customers through adherence to our fundamental goals of Operational Excellence, Organizational Development and Profitable Growth.”

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 and chief executive officer will be held today at 7:30 AM PT (10:30 AM ET). To participate in the teleconference, please call 866-770-7146 (international 617-213-8068) approximately ten minutes prior to the conference time stated above. The participant passcode is 41614201. Mr. Berenato will be speaking on behalf of the company and anticipates 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, 2007 and Form 10-Q for the quarter ended June 28, 2008 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

(In thousands, except per share amounts)

 

     Three Months Ended     Six Months Ended  
     June 28,
2008
    June 30,
2007
    June 28,
2008
    June 30,
2007
 

Sales and Service Revenues:

        

Product sales

   $ 88,592     $ 76,374     $ 172,901     $ 150,870  

Service revenues

     14,273       14,730       28,622       28,286  
                                

Total

     102,865       91,104       201,523       179,156  
                                

Operating Costs and Expenses:

        

Cost of product sales

     69,739       59,874       135,973       118,644  

Cost of service revenues

     11,433       11,436       22,966       22,241  

Selling, general & administrative expenses

     12,079       12,134       24,458       24,360  
                                

Total

     93,251       83,444       183,397       165,245  
                                

Operating Income

     9,614       7,660       18,126       13,911  

Interest Expense

     (390 )     (765 )     (593 )     (1,417 )

Income Tax Expense

     (3,393 )     (2,324 )     (6,450 )     (4,123 )
                                

Net Income

   $ 5,831     $ 4,571     $ 11,083     $ 8,371  
                                

Earnings Per Share:

        

Basic earnings per share

   $ 0.55     $ 0.44     $ 1.05     $ 0.81  

Diluted earnings per share

     0.55       0.44       1.04       0.80  

Weighted Averaged Number of Common Shares Outstanding:

        

Basic

     10,572       10,361       10,562       10,331  

Diluted

     10,684       10,474       10,671       10,436  

 


DUCOMMUN INCORPORATED AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

 

     June 28,
2008
    December 31,
2007
 

Assets

    

Current Assets:

    

Cash and cash equivalents

     6,984       31,571  

Accounts receivable, less allowance for doubtful accounts

     57,846       39,226  

Unbilled receivables

     3,757       5,615  

Inventories

     77,974       67,769  

Deferred income taxes

     7,947       7,727  

Other current assets

     5,914       5,328  
                

Total Current Assets

     160,422       157,236  

Property and Equipment, Net

     57,775       56,294  

Goodwill, Net

     106,632       106,632  

Other Assets

     11,263       12,314  
                
   $ 336,092     $ 332,476  
                

Liabilities and Shareholders’ Equity

    

Current Liabilities:

    

Current portion of long-term debt

   $ 2,856     $ 1,859  

Accounts payable

     27,662       33,845  

Accrued liabilities

     40,579       43,829  
                

Total Current Liabilities

     71,097       79,533  

Long-Term Debt, Less Current Portion

     21,773       23,892  

Deferred Income Taxes

     6,147       5,584  

Other Long-Term Liabilities

     10,264       9,416  
                

Total Liabilities

     109,281       118,425  
                

Commitments and Contingencies

    

Shareholders’ Equity:

    

Common Stock

     106       105  

Additional paid-in-capital

     55,139       53,444  

Retained earnings

     173,275       162,192  

Accumulated other comprehensive loss

     (1,709 )     (1,690 )
                

Total Shareholders’ Equity

     226,811       214,051  
                
   $ 336,092     $ 332,476