EXHIBIT 99.1
| | |
| 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 theThomson Reuters website. Conference call replay will be available after that time at the same link or at the Company’s web site atwww.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 | |
| | | | | | | | |
