Ducommun Incorporated Reports Fourth Quarter 2023 Results
- Record revenue and adjusted EBITDA in 2023 at $757 million and $102 million, respectively.
- Fourth-quarter revenue of $192.2 million with GAAP net income of $5.1 million.
- Adjusted net income for the quarter was $10.4 million, driven by strong commercial aerospace market performance.
- Gross margins increased year-over-year to 21.7% for the quarter and 21.6% for the full year.
- Solid backlog of approximately $994 million at the end of 2023, indicating growth opportunities.
- Optimism for 2024 with record order bookings and expected production rate growth at Boeing and Airbus.
- Decrease in net income year-over-year due to higher SG&A expenses, lower other income, and higher interest expense.
- Adjusted EBITDA was impacted by manufacturing volume loss and inefficiencies at certain performance centers.
- Lower net cash provided by operations year-over-year primarily due to lower accounts payable and lower inventories.
Insights
The reported increase in revenue to $757 million and adjusted EBITDA to $102 million for Ducommun Incorporated indicates a robust financial performance, especially noting the achievement of an all-time revenue high in 2023. The substantial growth in the commercial aerospace market, which has led this revenue increase, reflects a post-pandemic recovery in the sector. The company's strategic pricing initiatives and productivity improvements, such as a 16% increase in revenue per employee, have contributed to an enhanced gross margin of 130 basis points for the full year. Investors should note the solid backlog of approximately $994 million, which is indicative of future revenue potential and stability.
The increase in SG&A expenses, primarily due to the acquisition of BLR Aerospace and higher interest expenses due to increased rates and debt balances, are areas of concern that could impact profit margins. However, the company's ability to offset these with higher gross profit is a positive sign. The backlog growth in the military and space sector suggests a diversification of revenue streams, which is beneficial for risk management. The anticipated production rate increases from Boeing and Airbus may further bolster the commercial aerospace business in 2024, suggesting a positive outlook for investors in the short to medium term.
Examining Ducommun's performance within the context of the aerospace and defense industry, the company's focus on strategic pricing and productivity is noteworthy. The industry is characterized by long-term contracts and a high barrier to entry, which is reflected in Ducommun's significant backlog. The reported 2.1% year-over-year increase in Q4 revenue, despite lower revenue within the military and space markets, demonstrates resilience and adaptability in market demand shifts. The increase in gross margins suggests effective cost management and an advantageous product mix.
The structural systems segment showed a remarkable revenue increase, driven by higher build rates on large aircraft platforms, which is aligned with industry trends towards next-generation aircraft. The electronic systems segment, however, experienced a decrease, which may raise questions about market position and competitiveness in this area. The company's ability to navigate the winding down of operations at certain performance centers without significant impact on overall profitability is also a testament to strong operational management.
The reported financials of Ducommun Incorporated provide insights into the broader economic recovery post-pandemic, particularly in the aerospace sector. The increase in revenue is a microcosm of the sector's rebound as travel demand surges and defense spending remains robust. The backlog serves as a forward-looking indicator, suggesting sustained demand for aerospace and defense products. This is congruent with the broader economic trends of increased military spending and a recovery in the travel industry.
However, the increase in interest expenses reflects the rising interest rate environment, which could affect future borrowing costs and investment decisions within the sector. The company's ability to manage these expenses will be crucial in maintaining profitability. Ducommun's financial performance, particularly the growth in backlog and revenue, could be seen as a bellwether for the aerospace industry's trajectory, signaling a positive economic outlook for the sector.
New All Time Highs for Revenue and Adjusted EBITDA in 2023 of
SANTA ANA, Calif., Feb. 15, 2024 (GLOBE NEWSWIRE) -- 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
“Ducommun also ended the year with a solid backlog* of approximately
Fourth Quarter Results
Net revenue for the fourth quarter of 2023 was
$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
Gross profit for the fourth quarter of 2023 was
Operating income for the fourth quarter of 2023 was
Interest expense for the fourth quarter of 2023 was
Adjusted EBITDA for the fourth quarter of 2023 was
During the fourth quarter of 2023, the net cash provided by operations was
* 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
Business Segment Information
Electronic Systems
Electronic Systems reported net revenue for the current quarter of
$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
Structural Systems
Structural Systems reported net revenue for the current quarter of
$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
Corporate General and Administrative (“CG&A”) Expense
CG&A expense for the fourth quarter of 2023 was
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 |
| 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, net | 104,692 | 103,958 | ||||
| Contract assets | 177,686 | 191,290 | ||||
| Inventories | 199,201 | 171,211 | ||||
| Production cost of contracts | 7,778 | 5,693 | ||||
| Other current assets | 17,349 | 8,938 | ||||
| Total Current Assets | 549,569 | 527,336 | ||||
| Property and Equipment, Net | 111,379 | 106,225 | ||||
| Operating lease right-of-use assets | 29,513 | 34,632 | ||||
| Goodwill | 244,600 | 203,407 | ||||
| Intangibles, Net | 166,343 | 127,201 | ||||
| Deferred Income Taxes | 641 | — | ||||
| Other Assets | 18,874 | 22,705 | ||||
| Total Assets | $ | 1,120,919 | $ | 1,021,506 | ||
| Liabilities and Shareholders’ Equity | ||||||
| Current Liabilities | ||||||
| Accounts payable | $ | 72,265 | $ | 90,143 | ||
| Contract liabilities | 53,492 | 47,068 | ||||
| Accrued and other liabilities | 42,260 | 48,820 | ||||
| Operating lease liabilities | 7,873 | 7,155 | ||||
| Current portion of long-term debt | 7,813 | 6,250 | ||||
| Total Current Liabilities | 183,703 | 199,436 | ||||
| Long-Term Debt, Less Current Portion | 256,961 | 240,595 | ||||
| Non-Current Operating Lease Liabilities | 22,947 | 28,841 | ||||
| Deferred Income Taxes | 4,766 | 13,953 | ||||
| Other Long-Term Liabilities | 16,448 | 12,721 | ||||
| Total Liabilities | 484,825 | 495,546 | ||||
| Commitments and Contingencies | ||||||
| Shareholders’ Equity | ||||||
| Common stock | 146 | 121 | ||||
| Additional paid-in capital | 206,197 | 112,042 | ||||
| Retained earnings | 421,980 | 406,052 | ||||
| Accumulated other comprehensive income | 7,771 | 7,745 | ||||
| Total Shareholders’ Equity | 636,094 | 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 Ended | Years 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 Sales | 150,535 | 149,675 | 593,805 | 568,240 | ||||||||||||
| Gross Profit | 41,696 | 38,593 | 163,187 | 144,297 | ||||||||||||
| Selling, General and Administrative Expenses | 30,973 | 26,011 | 119,728 | 98,351 | ||||||||||||
| Restructuring Charges | 1,792 | 2,888 | 14,542 | 6,158 | ||||||||||||
| Operating Income | 8,931 | 9,694 | 28,917 | 39,788 | ||||||||||||
| Interest Expense | (5,449 | ) | (3,515 | ) | (20,773 | ) | (11,571 | ) | ||||||||
| Loss on Extinguishment of Debt | — | — | — | (295 | ) | |||||||||||
| Other Income, Net | 290 | 2,400 | 8,235 | 5,400 | ||||||||||||
| Income Before Taxes | 3,772 | 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 | ||||||||||||||||
| Basic | 14,636 | 12,124 | 13,717 | 12,074 | ||||||||||||
| Diluted | 14,890 | 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 Ended | Years Ended | |||||||||||||||||||||||||||||||||
| % Change | December 31, 2023 | December 31, 2022 | % of Net Revenues 2023 | % of Net Revenues 2022 | % Change | December 31, 2023 | December 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 Systems | 25.4 | % | 85,552 | 68,232 | 44.5 | % | 36.2 | % | 20.2 | % | 326,856 | 271,899 | 43.2 | % | 38.2 | % | ||||||||||||||||||
| Total Net Revenues | 2.1 | % | $ | 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 Systems | 6,587 | 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 Amortization | 3,650 | 3,474 | 14,276 | 13,974 | ||||||||||||||||||||||||||||||
| Stock-Based Compensation Expense | 141 | 165 | 462 | 186 | ||||||||||||||||||||||||||||||
| Restructuring Charges | 673 | 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 Income | 6,587 | 4,386 | 23,460 | 17,225 | ||||||||||||||||||||||||||||||
| Depreciation and Amortization | 4,441 | 4,553 | 18,060 | 17,212 | ||||||||||||||||||||||||||||||
| Stock-Based Compensation Expense | 128 | 89 | 387 | 163 | ||||||||||||||||||||||||||||||
| Restructuring Charges | 1,221 | 726 | 8,334 | 2,900 | ||||||||||||||||||||||||||||||
| Inventory Purchase Accounting Adjustments | 2,724 | — | 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 Amortization | 59 | 59 | 235 | 235 | ||||||||||||||||||||||||||||||
| Stock-Based Compensation Expense | 1,007 | 2,586 | 14,196 | 10,395 | ||||||||||||||||||||||||||||||
| Restructuring Charges | 23 | — | 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 Systems | 2,084 | 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 Ended | Years Ended | |||||||||||||||||||||||||||
| GAAP To Non-GAAP Operating Income | December 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 charges | 673 | 2,162 | 6,412 | 3,786 | ||||||||||||||||||||||||
| Amortization of acquisition-related intangible assets | 373 | 373 | 1,493 | 1,493 | ||||||||||||||||||||||||
| Adjusted operating income - Electronic Systems | 10,883 | 15,509 | 10.2 | % | 12.9 | % | 50,213 | 55,155 | 11.7 | % | 12.5 | % | ||||||||||||||||
| GAAP Operating income - Structural Systems | 6,587 | 4,386 | 23,460 | 17,225 | ||||||||||||||||||||||||
| Adjustments: | ||||||||||||||||||||||||||||
| Restructuring charges | 1,221 | 726 | 8,334 | 2,900 | ||||||||||||||||||||||||
| Inventory purchase accounting adjustments | 2,724 | — | 5,531 | 1,381 | ||||||||||||||||||||||||
| Guaymas fire related expenses | — | 1,015 | 3,896 | 4,466 | ||||||||||||||||||||||||
| Other fire related expenses | — | — | 477 | — | ||||||||||||||||||||||||
| Amortization of acquisition-related intangible assets | 1,922 | 1,237 | 6,795 | 4,956 | ||||||||||||||||||||||||
| Adjusted operating income - Structural Systems | 12,454 | 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 charges | 23 | — | 109 | — | ||||||||||||||||||||||||
| Other debt refinancing costs | — | — | — | 224 | ||||||||||||||||||||||||
| Adjusted operating loss - Corporate | (7,470 | ) | (7,666 | ) | (36,520 | ) | (27,089 | ) | ||||||||||||||||||||
| Total adjustments | 6,936 | 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 Ended | Years Ended | |||||||||||||||
| GAAP To Non-GAAP Earnings | December 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 adjustments | 5,317 | 2,490 | 20,028 | 11,281 | ||||||||||||
| Adjusted net income | $ | 10,427 | $ | 10,571 | $ | 35,956 | $ | 40,070 | ||||||||
| Three Months Ended | Years Ended | |||||||||||||||
| GAAP Earnings Per Share To Non-GAAP Earnings Per Share | December 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 adjustments | 0.36 | 0.20 | 1.43 | 0.91 | ||||||||||||
| Adjusted Diluted EPS | $ | 0.70 | $ | 0.85 | $ | 2.57 | $ | 3.24 | ||||||||
| Shares used for adjusted diluted EPS | 14,890 | 12,423 | 13,972 | 12,366 | ||||||||||||
(1) Includes effective tax rate of
| 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 aerospace | 429,494 | 450,092 | ||||
| Industrial | 36,931 | 53,374 | ||||
| Total | $ | 993,568 | $ | 960,820 | ||
| Electronic Systems | ||||||
| Military and space | $ | 397,681 | $ | 361,582 | ||
| Commercial aerospace | 87,994 | 125,590 | ||||
| Industrial | 36,931 | 53,374 | ||||
| Total | $ | 522,606 | $ | 540,546 | ||
| Structural Systems | ||||||
| Military and space | $ | 129,462 | $ | 95,772 | ||
| Commercial aerospace | 341,500 | 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
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