Ducommun (DCO) 8-K/A Financial statements and exhibits

Exhibit 99.3.

Unaudited Financial Statements for Composite Structures, LLC as of March 31, 2001 and for the Three Month Periods Ended March 31, 2001 and 2000.

Composite Structures, LLC

Unaudited Financial Statements as of March 31, 2001 and for the
Three Month Periods Ended March 31, 2001 and March 31, 2000

Composite Structures, LLC
Condensed Balance Sheet
(In thousands)
(Unaudited)

		March 31,
		2001
ASSETS
CURRENT ASSETS:
	Cash and cash equivalents	$	251
	Receivables, net		8,873
	Inventories, net		7,633
	Prepaid expenses and other current assets		533
	Total current assets		17,290
PROPERTY, PLANT AND EQUIPMENT, NET			5,339
PREPAID PENSION COSTS			1,501
OTHER ASSETS, NET			35
TOTAL		$	24,165
LIABILITIES AND MEMBERS’ CAPITAL
CURRENT LIABILITIES:
	Accounts payable	$	4,034
	Accrued liabilities		2,076
	Total current liabilities		6,110
REVOLVING CREDIT FACILITY			2,674
	Total liabilities		8,784
MEMBERS’ CAPITAL
	Contributed capital		6,258
	Retained earnings		9,123
	Total members’ capital		15,381
TOTAL		$	24,165

See the accompanying notes to unaudited condensed financial statements.

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Composite Structures, LLC
Condensed Statements of Operations
(In thousands)
(Unaudited)

	For Three Months Ended
	March 31,		March 31,
	2001		2000
SALES AND SERVICES REVENUE	$	15,400	$	13,749
COST OF GOODS SOLD		12,043		11,417
GROSS PROFIT		3,357		2,332
SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES		1,720		1,286
OPERATING INCOME		1,637		1,046
INTEREST EXPENSE, NET		12		127
NET INCOME	$	1,625	$	919

See the accompanying notes to unaudited condensed financial statements.

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Composite Structures, LLC
Condensed Statements of Cash Flows
(In thousands)
(Unaudited)

			For Three Months Ended
			March 31,			March 31,
			2001			2000
Cash Flows from Operating Activities:
Net Income			$	1,625		$	919
Adjustments to reconcile net income to net cash used in operating activities:
	Depreciation and amortization			310			262
	Amortization of deferred compensation expense			150			—
	Pension income			(36	)		(18	)
Changes in operating assets and liabilities, net
	Receivables			(1,900	)		438
	Inventories			(506	)		397
	Prepaid expenses and other current assets			(388	)		(269	)
	Accounts payable			455			(199	)
	Accrued liabilities			(2,764	)		(1,617	)
		Net cash used in operating activities:		(3,054	)		(87	)
Cash Flows from Investing Activities:
	Purchase of property, plant and equipment			(455	)		(128	)
		Net cash used in investing activities:		(455	)		(128	)
Cash Flows from Financing Activities:
	Net borrowings from revolving credit facility			2,674			400
	Distribution to members			—			(187	)
		Net cash provided by financing activities:		2,674			213
Net decrease in cash and cash equivalents				(835	)		(2	)
Cash and cash equivalents, beginning of period				1,086			85
Cash and cash equivalents, end of period			$	251		$	83

See accompanying notes to unaudited condensed financial statements.

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Composite Structures, LLC

Notes to Financial Statements (Unaudited)

1. Organization and Basis of Presentation

Composite Structures, LLC (the “Company”) designs and manufactures metal, fiberglass and carbon composite structures. Additionally, the Company produces helicopter main and tail rotor blades, and adhesive bonded assemblies, including spoilers, and fuselage structural panels for aircraft, jet engine fan containment rings, and helicopters.

On January 8, 1997, the Company commenced operations pursuant to the purchase of certain assets and assumptions of certain liabilities of Composite Structures, a division of Aluminum Company of America (“Alcoa”), accounted for using the purchase method of accounting.

The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information. In the opinion of Company management, the unaudited financial statements contained herein include all adjustments (of a normal recurring nature) necessary to present fairly the financial position of the Company as of March 31, 2001, and the results of its operations and cash flows for the three months ended March 31, 2001 and 2000. The interim results of operations are not necessarily indicative of results for future periods.

2. Inventories

Raw materials are stated at lower of cost or market. The Company utilizes the moving average method of determining cost (in thousands).

Raw materials	$	435
Work in process		7,532
Inventory obsolescence reserve		(334	)
	$	7,633

3. Income Taxes

Pursuant to its limited liability company status, the income or losses of the Company are includible in the income tax returns of its members. Consequently, no provision or federal income taxes is recorded in the accompanying financial statements. However, the Company is subject to a minimum state corporation tax and franchise fees based on income, which have been provided for in the accompanying financial statements.

4. New Accounting Standards

In June 1998, the Financial Accounting Standard Board (“FASB”) issued SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities.” SFAS No. 133 requires that all derivatives be recognized as either assets or liabilities in the balance sheet at fair value. SFAS No. 133, as amended by SFAS No. 137, “Accounting for Derivative Instruments and

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Hedging Activities — deferral of the effective date of FASB No. 133,” and SFAS No. 138, “Accounting for Certain Derivative Instruments and Certain Hedging Activities — an amendment of FASB Statement No. 133,” was adopted by the Company on January 1, 2001. The adoption of this Standard did not have a material impact on the financial statements.

5. Bank Borrowing

At December 31, 2000, the Company had no outstanding bank borrowings. At March 30, 2001, Composite Structures, LLC had net bank borrowings of $2,674,000 which were used to provide short-term liquidity.

6. Members’ Capital and Party-in-Interest Activity

The Company maintains an agreement with two of its members to provide management services. During the first quarter of 2001 and 2000, the Company’s statements of operations included management fees of $50,000 and $50,000, respectively, related to management services and performance-based awards earned by the members.

7. Subsequent Events

On June 6, 2001, all of the units of the Company were acquired, directly and indirectly, by Ducommun Incorporated (“Ducommun”) pursuant to a Unit and Stock Purchase Agreement dated May 16, 2001. The assets acquired by Ducommun through the purchase of the units included the Company’s fixed assets, accounts receivable, inventory, and other assets.

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