EX-99.1 2 dex991.htm DUCOMMUN INCORPORATED PRESS RELEASE ISSUED ON MAY 4, 2009 Ducommun Incorporated press release issued on May 4, 2009

EXHIBIT 99.1

LOGO

 

CONTACT:    Joseph P. Bellino
   Vice President and Chief Financial Officer
   (310) 513-7211

FOR IMMEDIATE RELEASE

DUCOMMUN INCORPORATED REPORTS RESULTS FOR THE

FIRST QUARTER ENDED APRIL 4, 2009

LOS ANGELES, California (May 4, 2009) — Ducommun Incorporated (NYSE:DCO) today reported results for its first quarter ended April 4, 2009.

Sales for the first quarter of 2009 increased 13% to $111.4 million from $98.7 million for the first quarter of 2008. Net income for the first quarter of 2009 was $2.6 million, or $0.25 per diluted share, compared to net income of $5.3 million, or $0.49 per diluted share, for the comparable period last year. The first quarter 2009 results were impacted by an after-tax charge of $2.9 million, or $0.27 per diluted share, for an inventory reserve related to the Eclipse Aviation Corporation Chapter 7 bankruptcy filing in March 2009.

The 13% increase in sales for the first quarter of 2009 from the same period last year was primarily due to sales from the December 2008 acquisition of DynaBil Industries, Inc. (DAS-NY). Net sales from DAS-NY were $11.3 million. The Company’s mix of business in the first quarter of 2009 was approximately 61% military, 37% commercial and 2% space, compared to 59% military, 39% commercial and 2% space in the first quarter of 2008.

Gross profit, as a percentage of sales, was 15.5% in the first quarter of 2009 compared to 21.2% in the first quarter of 2008. Gross profit in first quarter of 2009 was negatively impacted by the pretax inventory reserve of $4.4 million discussed above.

Selling, general and administration (SG&A) expenses increased to $12.8 million, or 11.5% of sales in the first quarter of 2009, compared to $12.4 million, or 12.5% of sales, in the first quarter of 2008. The increase in SG&A expenses resulted principally from the addition of the DAS-NY SG&A expense.

Net income for the first quarter of 2009 decreased 51% from the first quarter of 2008 primarily due to the Eclipse inventory reserve and higher interest expense due to higher debt levels, partially offset by the benefit of a lower effective tax rate in the first quarter of 2009. The Company’s effective tax rate for the first quarter of 2009 was 33.0%, compared to 36.8% for the first quarter of 2008. The Company’s effective tax rate in 2009 included the benefit of research development tax credits which were not available in the first quarter of 2008.

Joseph C. Berenato, chairman and chief executive officer, stated “While we were disappointed by the Eclipse inventory reserve, Ducommun turned in solid operating performance for the quarter. Our operating income for the quarter grew year over year, absent the reserve. In addition, despite a tough environment, we grew “same store” sales. Finally, we are pleased by the operating performance of our recent acquisition of DAS-NY, which is integrating nicely into our business.”

Mr. Berenato continued, “While future build rates of commercial aircraft and the final direction of the U.S. Defense budget remain uncertain, we continue to make Ducommun a stronger and more capable company which is becoming more important to our expanding list of key customers.”

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, Anthony J. Reardon, the Company’s president and chief operating officer, and Joseph P. Bellino, the Company’s vice president and chief financial officer, will be held today at 7:30 AM PT (10:30 AM ET). To participate in the teleconference, please call 866.362.4832 (international 617.597.5364) approximately ten minutes prior to the conference time stated above. The participant passcode is 50061145. Mr. Berenato, Mr. Reardon, and Mr. Bellino 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 directly at the Thomson Reuters website. Conference call replay will be available after that time at the same link or at 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, 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  
     April 4,
2009
    March 29,
2008
 

Sales and Service Revenues

    

Product sales

   $ 93,977     $ 84,309  

Service revenues

     17,378       14,349  
                

Total

     111,355       98,658  
                

Operating Costs and Expenses:

    

Cost of product sales

     79,972       66,234  

Cost of service revenues

     14,077       11,533  

Selling, general & administrative expenses

     12,809       12,379  
                

Total

     106,858       90,146  
                

Operating Income

     4,497       8,512  

Interest Expense

     (639 )     (203 )

Income Tax Expense

     (1,273 )     (3,057 )
                

Net Income

   $ 2,585     $ 5,252  
                

Earnings Per Share

    

Basic earnings per share

   $ 0.25     $ 0.50  

Diluted earnings per share

     0.25       0.49  

Weighted Averaged Number of Common Shares Outstanding:

    

Basic

     10,495       10,551  

Diluted

     10,502       10,635  


DUCOMMUN INCORPORATED AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

(in thousands, except share data)

 

     April 4,
2009
    December 31,
2008
 

Assets

    

Current Assets:

    

Cash and cash equivalents

   $ 1,130     $ 3,508  

Accounts receivable, less allowance for doubtful accounts

     66,369       50,090  

Unbilled receivables

     5,119       7,074  

Inventories

     88,130       83,157  

Deferred income taxes

     10,217       9,172  

Other current assets

     5,306       6,172  
                

Total Current Assets

     176,271       159,173  

Property and Equipment, Net

     61,438       61,954  

Goodwill, Net

     113,314       114,002  

Other Assets

     29,932       31,057  
                
   $ 380,955     $ 366,186  
                

Liabilities and Shareholders’ Equity

    

Current Liabilities:

    

Current portion of long-term debt

   $ 1,932     $ 2,420  

Accounts payable

     35,296       35,358  

Accrued liabilities

     40,321       51,723  
                

Total Current Liabilities

     77,549       89,501  

Long-Term Debt, Less Current Portion

     53,374       28,299  

Deferred Income Taxes

     10,009       9,902  

Other Long-Term Liabilities

     14,101       14,038  
                

Total Liabilities

     155,033       141,740  
                

Commitments and Contingencies

    

Shareholders’ Equity:

    

Common Stock

     106       106  

Treasury Stock

     (1,924 )     (986 )

Additional paid-in-capital

     56,574       56,040  

Retained earnings

     175,513       173,718  

Accumulated other comprehensive loss

     (4,347 )     (4,432 )
                

Total Shareholders’ Equity

     225,922       224,446  
                
   $ 380,955     $ 366,186