Cover Page
Cover Page - shares | 6 Months Ended | |
Jun. 29, 2024 | Jul. 31, 2024 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 29, 2024 | |
Document Transition Report | false | |
Entity File Number | 001-08174 | |
Entity Registrant Name | DUCOMMUN INCORPORATED | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 95-0693330 | |
Entity Address, Address Line One | 600 Anton Boulevard, Suite 1100 | |
Entity Address, City or Town | Costa Mesa | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 92626-7100 | |
City Area Code | 657 | |
Local Phone Number | 335-3665 | |
Title of 12(b) Security | Common Stock, $.01 par value per share | |
Trading Symbol | DCO | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 14,748,194 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q2 | |
Current Fiscal Year End Date | --12-31 | |
Entity Central Index Key | 0000030305 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 29, 2024 | Dec. 31, 2023 |
Current Assets | ||
Cash and cash equivalents | $ 29,405 | $ 42,863 |
Accounts receivable, net of allowance for credit losses of $2,363 and $2,006 at June 29, 2024 and December 31, 2023, respectively | 106,585 | 104,692 |
Contract assets | 210,314 | 177,686 |
Inventories | 201,831 | 199,201 |
Production cost of contracts | 6,181 | 7,778 |
Other current assets | 14,398 | 17,349 |
Total Current Assets | 568,714 | 549,569 |
Property and Equipment, Net of Accumulated Depreciation of $188,260 and $181,412 at June 29, 2024 and December 31, 2023, respectively | 111,299 | 111,379 |
Operating Lease Right-of-Use Assets | 27,128 | 29,513 |
Goodwill | 244,600 | 244,600 |
Intangibles, Net | 157,967 | 166,343 |
Deferred Income Taxes | 641 | 641 |
Other Assets | 21,151 | 18,874 |
Total Assets | 1,131,500 | 1,120,919 |
Current Liabilities | ||
Accounts payable | 76,810 | 72,265 |
Contract liabilities | 50,034 | 53,492 |
Accrued and other liabilities | 40,293 | 42,260 |
Operating lease liabilities | 7,943 | 7,873 |
Current portion of long-term debt | 10,938 | 7,813 |
Total Current Liabilities | 186,018 | 183,703 |
Long-Term Debt, Less Current Portion | 250,896 | 256,961 |
Non-Current Operating Lease Liabilities | 20,414 | 22,947 |
Deferred Income Taxes | 2,945 | 4,766 |
Other Long-Term Liabilities | 15,328 | 16,448 |
Total Liabilities | 475,601 | 484,825 |
Commitments and Contingencies (Notes 10, 12) | ||
Shareholders’ Equity | ||
Common Stock - $0.01 par value; 35,000,000 shares authorized; 14,746,921 and 14,600,766 shares issued and outstanding at June 29, 2024 and December 31, 2023, respectively | 147 | 146 |
Additional Paid-In Capital | 208,930 | 206,197 |
Retained Earnings | 436,553 | 421,980 |
Accumulated Other Comprehensive Income | 10,269 | 7,771 |
Total Shareholders’ Equity | 655,899 | 636,094 |
Total Liabilities and Shareholders’ Equity | $ 1,131,500 | $ 1,120,919 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jun. 29, 2024 | Dec. 31, 2023 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for credit loss | $ 2,363 | $ 2,006 |
Property and equipment, accumulated depreciation | $ 188,260 | $ 181,412 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 35,000,000 | 35,000,000 |
Common stock, shares issued (in shares) | 14,746,921 | 14,600,766 |
Common stock, shares outstanding (in shares) | 14,746,921 | 14,600,766 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 29, 2024 | Jul. 01, 2023 | Jun. 29, 2024 | Jul. 01, 2023 | |
Income Statement [Abstract] | ||||
Net Revenues | $ 197,000 | $ 187,320 | $ 387,847 | $ 368,511 |
Cost of Sales | 145,761 | 147,198 | 289,665 | 291,622 |
Gross Profit | 51,239 | 40,122 | 98,182 | 76,889 |
Selling, General and Administrative Expenses | 36,061 | 30,348 | 69,012 | 56,573 |
Restructuring Charges | 1,254 | 4,769 | 2,624 | 8,939 |
Operating Income | 13,924 | 5,005 | 26,546 | 11,377 |
Interest Expense | (3,975) | (5,735) | (7,858) | (9,954) |
Other Income | 0 | 4,059 | 0 | 7,945 |
Income Before Taxes | 9,949 | 3,329 | 18,688 | 9,368 |
Income Tax Expense | 2,225 | 955 | 4,115 | 1,763 |
Net Income | $ 7,724 | $ 2,374 | $ 14,573 | $ 7,605 |
Earnings Per Share | ||||
Basic earnings per share (in dollars per share) | $ 0.52 | $ 0.18 | $ 0.99 | $ 0.59 |
Diluted earnings per share (in dollars per share) | $ 0.52 | $ 0.17 | $ 0.97 | $ 0.58 |
Weighted-Average Number of Common Shares Outstanding | ||||
Basic (in shares) | 14,775 | 13,403 | 14,735 | 12,799 |
Diluted (in shares) | 14,961 | 13,599 | 14,954 | 13,075 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 29, 2024 | Jul. 01, 2023 | Jun. 29, 2024 | Jul. 01, 2023 | |
Statement of Comprehensive Income [Abstract] | ||||
Net Income | $ 7,724 | $ 2,374 | $ 14,573 | $ 7,605 |
Other Comprehensive Income, Net of Tax: | ||||
Amortization of actuarial losses and prior service costs, net of tax of $14 and $14 for the three months ended June 29, 2024 and July 1, 2023, respectively, and $28 and $27 for the six months ended June 29, 2024 and July 1, 2023, respectively | 44 | 41 | 86 | 83 |
Change in net unrealized gains on cash flow hedges, net of tax of $65 and $968 for the three months ended June 29, 2024 and July 1, 2023, respectively, and $737 and $306 for the six months ended June 29, 2024 and July 1, 2023, respectively | 211 | 3,116 | 2,412 | 986 |
Other Comprehensive Income, Net of Tax | 255 | 3,157 | 2,498 | 1,069 |
Comprehensive Income | $ 7,979 | $ 5,531 | $ 17,071 | $ 8,674 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 29, 2024 | Jul. 01, 2023 | Jun. 29, 2024 | Jul. 01, 2023 | |
Statement of Comprehensive Income [Abstract] | ||||
Amortization of actuarial losses, net of tax | $ (14) | $ (14) | $ (28) | $ (27) |
Unrealized gain on cash flow hedge, tax expense (benefit) | $ 65 | $ 968 | $ 737 | $ 306 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Changes in Shareholders' Equity - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) |
Beginning balance (in shares) at Dec. 31, 2022 | 12,106,285 | ||||
Beginning balance at Dec. 31, 2022 | $ 525,960 | $ 121 | $ 112,042 | $ 406,052 | $ 7,745 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net Income | 5,231 | 5,231 | |||
Other comprehensive income, net of tax | (2,088) | (2,088) | |||
Employee stock purchase plan (in shares) | 26,833 | ||||
Employee stock purchase plan | 1,307 | 1,307 | |||
Stock options exercised (in shares) | 25,561 | ||||
Stock options exercised | 737 | 737 | |||
Stock awards vested (in shares) | 173,249 | ||||
Stock awards vested | 0 | $ 2 | (2) | ||
Stock repurchased related to the exercise of stock options and stock awards vested (in shares) | (100,224) | ||||
Stock repurchased related to the exercise of stock options and stock awards vested | (5,480) | $ (1) | (5,479) | ||
Stock-based compensation | 2,717 | 2,717 | |||
Ending balance (in shares) at Apr. 01, 2023 | 12,231,704 | ||||
Ending balance at Apr. 01, 2023 | 528,384 | $ 122 | 111,322 | 411,283 | 5,657 |
Beginning balance (in shares) at Dec. 31, 2022 | 12,106,285 | ||||
Beginning balance at Dec. 31, 2022 | 525,960 | $ 121 | 112,042 | 406,052 | 7,745 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net Income | 7,605 | ||||
Other comprehensive income, net of tax | 1,069 | ||||
Ending balance (in shares) at Jul. 01, 2023 | 14,569,589 | ||||
Ending balance at Jul. 01, 2023 | 622,143 | $ 146 | 199,526 | 413,657 | 8,814 |
Beginning balance (in shares) at Apr. 01, 2023 | 12,231,704 | ||||
Beginning balance at Apr. 01, 2023 | 528,384 | $ 122 | 111,322 | 411,283 | 5,657 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net Income | 2,374 | 2,374 | |||
Other comprehensive income, net of tax | 3,157 | 3,157 | |||
Issuance of common stock in public offering, net of issuance costs (in shares) | 2,300,000 | ||||
Issuance of common stock in public offering, net of issuance costs | 85,107 | $ 23 | 85,084 | ||
Stock options exercised (in shares) | 1,771 | ||||
Stock options exercised | 70 | 70 | |||
Stock awards vested (in shares) | 54,814 | ||||
Stock awards vested | 0 | $ 1 | (1) | ||
Stock repurchased related to the exercise of stock options and stock awards vested (in shares) | (18,700) | ||||
Stock repurchased related to the exercise of stock options and stock awards vested | (1,142) | (1,142) | |||
Stock-based compensation | 4,193 | 4,193 | |||
Ending balance (in shares) at Jul. 01, 2023 | 14,569,589 | ||||
Ending balance at Jul. 01, 2023 | $ 622,143 | $ 146 | 199,526 | 413,657 | 8,814 |
Beginning balance (in shares) at Dec. 31, 2023 | 14,600,766 | 14,600,766 | |||
Beginning balance at Dec. 31, 2023 | $ 636,094 | $ 146 | 206,197 | 421,980 | 7,771 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net Income | 6,849 | 6,849 | |||
Other comprehensive income, net of tax | 2,243 | 2,243 | |||
Employee stock purchase plan (in shares) | 28,773 | ||||
Employee stock purchase plan | 1,190 | 1,190 | |||
Stock options exercised (in shares) | 1,625 | ||||
Stock options exercised | 47 | 47 | |||
Stock awards vested (in shares) | 152,569 | ||||
Stock awards vested | 0 | $ 2 | (2) | ||
Stock repurchased related to the exercise of stock options and stock awards vested (in shares) | (77,107) | ||||
Stock repurchased related to the exercise of stock options and stock awards vested | (3,765) | $ (1) | (3,764) | ||
Stock-based compensation | 2,889 | 2,889 | |||
Ending balance (in shares) at Mar. 30, 2024 | 14,706,626 | ||||
Ending balance at Mar. 30, 2024 | $ 645,547 | $ 147 | 206,557 | 428,829 | 10,014 |
Beginning balance (in shares) at Dec. 31, 2023 | 14,600,766 | 14,600,766 | |||
Beginning balance at Dec. 31, 2023 | $ 636,094 | $ 146 | 206,197 | 421,980 | 7,771 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net Income | 14,573 | ||||
Other comprehensive income, net of tax | $ 2,498 | ||||
Ending balance (in shares) at Jun. 29, 2024 | 14,746,921 | 14,746,921 | |||
Ending balance at Jun. 29, 2024 | $ 655,899 | $ 147 | 208,930 | 436,553 | 10,269 |
Beginning balance (in shares) at Mar. 30, 2024 | 14,706,626 | ||||
Beginning balance at Mar. 30, 2024 | 645,547 | $ 147 | 206,557 | 428,829 | 10,014 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net Income | 7,724 | 7,724 | |||
Other comprehensive income, net of tax | 255 | 255 | |||
Stock options exercised (in shares) | 10,322 | ||||
Stock options exercised | 368 | 368 | |||
Stock awards vested (in shares) | 57,590 | ||||
Stock repurchased related to the exercise of stock options and stock awards vested (in shares) | (27,617) | ||||
Stock repurchased related to the exercise of stock options and stock awards vested | (1,524) | (1,524) | |||
Stock-based compensation | $ 3,529 | 3,529 | |||
Ending balance (in shares) at Jun. 29, 2024 | 14,746,921 | 14,746,921 | |||
Ending balance at Jun. 29, 2024 | $ 655,899 | $ 147 | $ 208,930 | $ 436,553 | $ 10,269 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 29, 2024 | Jul. 01, 2023 | |
Cash Flows from Operating Activities | ||
Net Income | $ 14,573 | $ 7,605 |
Adjustments to Reconcile Net Income to Net Cash Used in Operating Activities: | ||
Depreciation and amortization | 16,598 | 15,943 |
Non-cash operating lease cost | 4,164 | 2,953 |
Inventory write down and property and equipment impairment due to restructuring | 0 | 843 |
Stock-based compensation expense | 8,286 | 8,117 |
Deferred income taxes | (2,586) | (2,056) |
Provision for credit losses | 357 | 473 |
Recognition of insurance recoveries | 0 | (3,886) |
Other | 428 | 444 |
Changes in Assets and Liabilities: | ||
Accounts receivable | (2,250) | 12,252 |
Contract assets | (32,628) | 1,454 |
Inventories | (2,630) | (21,243) |
Production cost of contracts | 1,429 | (401) |
Other assets | 3,669 | 343 |
Accounts payable | 4,873 | (8,177) |
Contract liabilities | (3,458) | (15,349) |
Operating lease liabilities | (4,060) | (2,471) |
Accrued and other liabilities | (4,951) | (6,591) |
Net Cash Provided by (Used in) Operating Activities | 1,814 | (9,747) |
Cash Flows from Investing Activities | ||
Purchases of property and equipment | (8,292) | (10,919) |
Payments for acquisition of BLR Aerospace L.L.C., net of cash acquired | 0 | (114,353) |
Net Cash Used in Investing Activities | (8,292) | (125,272) |
Cash Flows from Financing Activities | ||
Borrowings from senior secured revolving credit facility | 20,000 | 133,500 |
Repayments of senior secured revolving credit facility | (20,000) | (99,700) |
Repayments of term loans | (3,125) | (3,125) |
Repayments of other debt | (172) | (165) |
Proceeds from issuance of common stock in public offering, net of issuance costs | 0 | 85,107 |
Net cash paid upon issuance of common stock under stock plans | (3,683) | (4,038) |
Net Cash (Used in) Provided by Financing Activities | (6,980) | 111,579 |
Net Decrease in Cash and Cash Equivalents | (13,458) | (23,440) |
Cash and Cash Equivalents at Beginning of Period | 42,863 | 46,246 |
Cash and Cash Equivalents at End of Period | $ 29,405 | $ 22,806 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 29, 2024 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Description of Business We are a leading global provider of innovative, value-added proprietary products and manufacturing solutions for high-performance products and high-cost-of failure applications used primarily in the aerospace and defense (“A&D”), industrial, medical and other industries (collectively, “Industrial”). Our operations are organized into two primary businesses: the Electronic Systems segment (“Electronic Systems”) and the Structural Systems segment (“Structural Systems”), each of which is a reportable operating segment. Electronic Systems designs, engineers and manufactures high-reliability electronic and electromechanical products used in worldwide technology-driven markets including A&D and Industrial end-use markets. Electronic Systems’ product offerings primarily range from prototype development to complex assemblies. Structural Systems designs, engineers and manufactures large, complex contoured aerostructure components and assemblies and supplies composite and metal bonded structures and assemblies. Structural Systems’ products are primarily used on commercial aircraft, military fixed-wing aircraft, and military and commercial rotary-wing aircraft. Both reportable operating segments follow the same accounting principles. Basis of Presentation The unaudited condensed consolidated financial statements include the accounts of Ducommun Incorporated and its subsidiaries (“Ducommun,” the “Company,” “we,” “us” or “our”), after eliminating intercompany balances and transactions. The December 31, 2023 condensed consolidated balance sheet data was derived from audited financial statements, but does not contain all disclosures required by accounting principles generally accepted in the United States of America (“GAAP”). Our significant accounting policies were described in Part IV, Item 15(a)(1), “Note 1. Summary of Significant Accounting Policies” in our Annual Report on Form 10-K for the year ended December 31, 2023 (“2023 Form 10-K”). The financial information included in this Quarterly Report on Form 10-Q (“Form 10-Q”) should be read in conjunction with the 2023 Form 10-K. In the opinion of management, all adjustments, including recurring accruals, have been made that are necessary to fairly state our condensed consolidated financial position, statements of income, comprehensive income, changes in shareholders’ equity, and cash flows in accordance with GAAP for the periods covered by this Form 10-Q. The results of operations for the three and six months ended June 29, 2024 are not necessarily indicative of the results to be expected for the full year ending December 31, 2024. Our fiscal quarters typically end on the Saturday closest to the end of March, June and September for the first three fiscal quarters of each year, and on December 31 for our fourth fiscal quarter. As a result of using fiscal quarters for the first three quarters combined with leap years, our first and fourth fiscal quarters can range between 12 1/2 weeks to 13 1/2 weeks while the second and third fiscal quarters remain at a constant 13 weeks per fiscal quarter. Certain reclassifications have been made to prior period amounts to conform to the current year’s presentation. Use of Estimates Certain amounts and disclosures included in the unaudited condensed consolidated financial statements require management to make estimates and judgments that affect the amounts of assets, liabilities (including contract liabilities), revenues and expenses, and related disclosures of contingent assets and liabilities. These estimates are based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. Unsolicited Non-Binding Indication of Interest On April 8, 2024, our Board of Directors (“BOD”) confirmed receipt of the first unsolicited non-binding indication of interest dated April 1, 2024 (“First IOI”) from Albion River LLC (“Albion”), a private direct investment firm. Albion expressed interest in acquiring all the outstanding shares of Ducommun for $60.00 per share in cash. On April 16, 2024, we issued a press release responding to the First IOI that the BOD had unanimously determined it was not in the best interests of Ducommun and Ducommun shareholders to pursue further discussions regarding the proposal. Subsequent to our quarter ended June 29, 2024, on July 15, 2024, our BOD received an unsolicited revised non-binding indication of interest from Albion (“Second IOI”), to acquire all outstanding shares of Ducommun for $65.00 per share in cash. On July 25, 2024, we issued a press release responding to the Second IOI that the BOD had unanimously determined it was not in the best interests of Ducommun and Ducommun shareholders to pursue further discussions regarding the revised proposal. Supplemental Cash Flow Information (Dollars in thousands) Six Months Ended June 29, July 1, Interest paid, net $ 7,372 $ 9,529 Taxes paid, net $ 4,001 $ 10,038 Non-cash activities: Purchases of property and equipment not paid $ 479 $ 1,291 Earnings Per Share Basic earnings per share are computed by dividing income available to common shareholders by the weighted-average number of common shares outstanding in each period. Diluted earnings per share is computed by dividing income available to common shareholders by the weighted-average number of common shares outstanding, plus any potentially dilutive shares that could be issued if exercised or converted into common stock in each period. The net income and weighted-average common shares outstanding used to compute earnings per share were as follows: (Dollars in thousands, (Dollars in thousands, Three Months Ended Six Months Ended June 29, July 1, June 29, July 1, Net income $ 7,724 $ 2,374 $ 14,573 $ 7,605 Weighted-average number of common shares outstanding Basic weighted-average common shares outstanding 14,775 13,403 14,735 12,799 Dilutive potential common shares 186 196 219 276 Diluted weighted-average common shares outstanding 14,961 13,599 14,954 13,075 Earnings per share Basic $ 0.52 $ 0.18 $ 0.99 $ 0.59 Diluted $ 0.52 $ 0.17 $ 0.97 $ 0.58 Potentially dilutive stock awards, as shown below, were excluded from the computation of diluted earnings per share because their inclusion would have been anti-dilutive. However, these awards may be potentially dilutive common shares in the future. (In thousands) (In thousands) Three Months Ended Six Months Ended June 29, July 1, June 29, July 1, Stock options and stock units 51 111 56 56 Fair Value Assets and liabilities that are measured, recorded or disclosed at fair value on a recurring basis are categorized using the fair value hierarchy. The fair value hierarchy has three levels based on the reliability of the inputs used to determine the fair value. Level 1, the highest level, refers to the values determined based on quoted prices in active markets for identical assets. Level 2 refers to fair values estimated using significant observable inputs. Level 3, the lowest level, includes fair values estimated using significant unobservable inputs. We have money market funds which are included as cash and cash equivalents. We also have forward interest rate swap agreements and the fair value of the forward interest rate swap agreements was determined using pricing models that use observable market inputs as of the balance sheet date, a Level 2 measurement. There were no transfers between Level 1, Level 2, or Level 3 financial instruments in the three months ended June 29, 2024. Cash and Cash Equivalents Cash equivalents consist of highly liquid instruments purchased with original maturities of three months or less. These assets are valued at cost, which approximates fair value, and we classify as Level 1. See Fair Value above. Derivative Instruments We recognize derivative instruments on our condensed consolidated balance sheets at their fair value. On the date that we enter into a derivative contract, we designate the derivative instrument as a fair value hedge, a cash flow hedge, or a derivative instrument that will not be accounted for using hedge accounting methods. In November 2021, we entered into forward interest rate swap agreements with an aggregate notional amount of $150.0 million, all with an effective date of January 1, 2024 (“Forward Interest Rate Swaps”), to manage our exposure to interest rate movements on a portion of our debt. At the time we entered into the Forward Interest Rate Swaps, there was a high probability of forecasted interest payments on our debts occurring and the swaps were highly effective in offsetting those interest payments; therefore, we elected to apply cash flow hedge accounting. In July 2022, as a result of refinancing all our existing debt, which allowed borrowing based on a Secured Overnight Financing Rate (“SOFR”), we were required to complete an amendment of the Forward Interest Rate Swaps from One Month London Interbank Offered Rate (“LIBOR”) to One Month Term SOFR (“Amended Forward Interest Rate Swaps”), which occurred on the same day. After the transition of the Forward Interest Rate Swaps and debt to SOFR was completed, we determined the hedging relationships were still highly effective as of the amendment date. See Note 4 and Note 8. As of June 29, 2024, all of our derivative instruments were designated as cash flow hedges. We record changes in the fair value of a derivative instrument that is highly effective and that is designated and qualifies as a cash flow hedge in other comprehensive income (loss), net of tax until our earnings are affected by the variability of cash flows of the underlying hedged item. We report changes in the fair values of derivative instruments that are not designated or do not qualify for hedge accounting in current period earnings. We classify cash flows from derivative instruments in the condensed consolidated statements of cash flows in the same category as the item being hedged or on a basis consistent with the nature of the instrument. Prior to the Amended Forward Interest Rate Swaps being effective on January 1, 2024, we only recorded the changes in fair value of the derivative instruments that were highly effective and that were designated and qualified as cash flow hedges prior to the effective date. See Note 4. When we determine that a derivative instrument is not highly effective as a hedge, we discontinue hedge accounting prospectively. In all situations in which we discontinue hedge accounting and the derivative instrument remains outstanding, we will carry the derivative instrument at its fair value on our condensed consolidated balance sheets and recognize subsequent changes in its fair value in our current period earnings. Inventories Inventories are stated at the lower of cost or net realizable value with cost being determined using a moving average cost basis for raw materials and actual cost for work-in-process and finished goods. The majority of our inventory is charged to cost of sales as raw materials are placed into production. Inventoried costs include raw materials, outside processing, direct labor and allocated overhead, adjusted for any abnormal amounts of idle performance center expense, freight, handling costs, and wasted materials (spoilage) incurred. We assess the inventory carrying value and reduce it, if necessary, to its net realizable value based on customer orders on hand, and internal demand forecasts using management’s best estimates given information currently available. The majority of our revenues are recognized over time, however, for revenue contracts where revenue is recognized using the point in time method, inventory is not reduced until it is shipped or transfer of control to the customer has occurred. Our ending inventory consists of raw materials, work-in-process, and finished goods. Accumulated Other Comprehensive Income Accumulated other comprehensive income, as reflected on the condensed consolidated balance sheets under the equity section, was comprised of cumulative pension and retirement liability adjustments, net of tax, and change in net unrealized gains and losses on cash flow hedges, net of tax. Revenue Recognition Our customers typically engage us to manufacture products based on designs and specifications provided by the end-use customer. This requires the building of tooling and manufacturing first article inspection products (prototypes) before volume manufacturing. Contracts with our customers generally include a termination for convenience clause. We have a significant number of contracts that are started and completed within the same year, as well as contracts derived from long-term agreements and programs that can span several years. We recognize revenue under ASC 606, “Revenue from Contracts with Customers” (“ASC 606”), which utilizes a five-step model. The definition of a contract for us is typically defined as a customer purchase order as this is when we achieve an enforceable right to payment. The majority of our contracts are firm fixed-price contracts. The deliverables within a customer purchase order are analyzed to determine the number of performance obligations. In addition, at times, in order to achieve economies of scale and based on our customer’s forecasted demand, we may build in advance of receiving a purchase order from our customer. When that occurs, we would not recognize revenue until we have received the customer purchase order. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account under ASC 606. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, control is transferred and the performance obligation is satisfied. The majority of our contracts have a single performance obligation as the promise to transfer the individual goods or services are highly interrelated or met the series guidance. For contracts with multiple performance obligations, we allocate the contract transaction price to each performance obligation using our best estimate of the standalone selling price of each distinct good or service in the contract. The primary method used to estimate the standalone selling price is the expected cost plus a margin approach, under which we forecast our expected costs of satisfying a performance obligation and then add an appropriate margin for that distinct good or service. We manufacture most products to customer specifications, and the product cannot be easily modified for another customer. As such, these products are deemed to have no alternative use once the manufacturing process begins. In the event the customer invokes a termination for convenience clause, we would be entitled to costs incurred to date plus a reasonable profit. Contract costs typically include labor, materials, overhead, and when applicable, subcontractor costs. For most of our products, we are building assets with no alternative use and have enforceable right to payment, and thus, we recognize revenue using the over time method. The majority of our performance obligations are satisfied over time as work progresses. Typically, revenue is recognized over time using an input measure (i.e., costs incurred to date relative to total estimated costs at completion, also known as cost-to-cost plus reasonable profit) to measure progress. Our typical revenue contract is a firm fixed price contract, and the cost of raw materials could make up a significant amount of the total costs incurred. As such, we believe using the total costs incurred input method would be the most appropriate method. While the cost of raw materials could make up a significant amount of the total costs incurred, there is a direct relationship between our inputs and the transfer of control of goods or services to the customer. Contract estimates, known as estimates at completion, are based on various assumptions to project the outcome of future events that can span multiple months or years. These assumptions include among others, labor productivity and availability; the complexity of the work to be performed; the cost and availability of materials; overhead cost rates; and the performance of subcontractors. As a significant change in one or more of these estimates could affect the progress completed (and related profitability) on our contracts, we review and update our contract-related estimates on a regular basis. We recognize such adjustments under the cumulative catch-up method. Under this method, the impact of the adjustment is recognized in the period the adjustment is identified. In any given reporting period, we have a large number of active contracts, which we have defined as a customer purchase order, and changes in estimates may occur on a significant number of these contracts. Given the significant number of contracts that we may have at any given point in time, the varied nature of products produced under such contracts, and the different assumptions, facts and circumstances associated with each individual contract, and the fact that such changes at the contract level are typically not material, we disclose cumulative catch-up adjustments on a net basis. Net cumulative favorable and unfavorable catch-up adjustments to contracts had the following impact on our operating results: (Dollars in thousands) (Dollars in thousands) Three Months Ended Six Months Ended June 29, July 1, June 29, July 1, Total net revenues $ 387 $ (4,184) $ (1,548) $ (7,440) Operating income $ 387 $ (4,184) $ (1,548) $ (7,440) Payments under long-term contracts may be received before or after revenue is recognized. When revenue is recognized before we bill our customer, a contract asset is created for the work performed but not yet billed. Similarly, when we receive payment before we ship our products to our customer and have met the shipping terms, a contract liability is created for the advance or progress payment. When a contract liability and a contract asset exist on the same contract, we report it on a net basis. We record provisions for the total anticipated losses on contracts, considering total estimated costs to complete the contract compared to total anticipated revenues, in the period in which such losses are identified. The provisions for estimated losses on contracts require us to make certain estimates and assumptions, including those with respect to the future revenue under a contract and the future cost to complete the contract. Our estimate of the future cost to complete a contract may include assumptions as to changes in manufacturing efficiency, operating and material costs, and our ability to resolve claims and assertions with our customers. If any of these or other assumptions and estimates do not materialize in the future, we may be required to adjust the provisions for estimated losses on contracts. The provision for estimated losses on contracts is included as part of contract liabilities on the condensed consolidated balance sheets. As of June 29, 2024 and December 31, 2023, provision for estimated losses on contracts were $5.2 million and $5.4 million, respectively. It is reasonably possible we may incur additional losses in the future. Production cost of contracts includes non-recurring production costs, such as design and engineering costs, and tooling and other special-purpose machinery necessary to build parts as specified in a contract. Production costs of contracts are recorded to cost of sales using the over time revenue recognition model. We review the value of the production cost of contracts on a quarterly basis to ensure when added to the estimated cost to complete, the value is not greater than the estimated realizable value of the related contracts. As of June 29, 2024 and December 31, 2023, production cost of contracts were $6.2 million and $7.8 million, respectively. Contract Assets and Contract Liabilities Contract assets consist of our right to payment for work performed but not yet billed. Contract assets are transferred to accounts receivable when we bill our customers. We bill our customers when we ship the products and meet the shipping terms within the revenue contract. Contract liabilities consist of advance or progress payments received from our customers prior to the time transfer of control occurs plus the estimated losses on contracts. When a contract liability and a contract asset exist on the same contract, we report it on a net basis. Contract assets and contract liabilities from revenue contracts with customers are as follows: (Dollars in thousands) June 29, December 31, Contract assets $ 210,314 $ 177,686 Contract liabilities $ 50,034 $ 53,492 The increase in our contract assets as of June 29, 2024 compared to December 31, 2023 was primarily due to a net increase of products in work in process in the current period. The decrease in our contract liabilities as of June 29, 2024 compared to December 31, 2023 was primarily due to a net decrease of advance or progress payments received from our customers in the current period. We recognized $21.0 million of the contract liabilities as of December 31, 2023 as revenues during the six months ended June 29, 2024. Performance obligations are defined as customer placed purchase orders (“POs”) with firm fixed price and firm delivery dates. Our remaining performance obligations as of June 29, 2024 totaled $840.0 million. Of the remaining performance obligations as of June 29, 2024, we anticipate recognizing an estimated 65% of our remaining performance obligations as revenue during the next 12 months with the remaining performance obligations being recognized in the remainder of 2025 and beyond. Revenue by Category In addition to the revenue categories disclosed above, the following table reflects our revenue disaggregated by major end-use market: (Dollars in thousands) (Dollars in thousands) Three Months Ended Six Months Ended June 29, July 1, June 29, July 1, Consolidated Ducommun Military and space $ 100,538 $ 97,370 $ 199,467 $ 195,040 Commercial aerospace 86,643 76,764 166,560 148,584 Industrial 9,819 13,186 21,820 24,887 Total $ 197,000 $ 187,320 $ 387,847 $ 368,511 Electronic Systems Military and space $ 69,987 $ 71,772 $ 142,492 $ 145,099 Commercial aerospace 21,634 22,166 44,667 42,764 Industrial 9,819 13,186 21,820 24,887 Total $ 101,440 $ 107,124 $ 208,979 $ 212,750 Structural Systems Military and space $ 30,551 $ 25,598 $ 56,975 $ 49,941 Commercial aerospace 65,009 54,598 121,893 105,820 Total $ 95,560 $ 80,196 $ 178,868 $ 155,761 Recent Accounting Pronouncements Recently Issued Accounting Standards In March 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024-02, “Codification Improvements - Amendments to Remove References to the Concepts Statements” (“ASU 2024-02”), which removed references to various FASB Concepts Statements and updates technical corrections such as conforming amendments, clarification to guidance, simplifications to wording or the structure of guidance, and other minor improvements. The new guidance is effective for fiscal years beginning after December 15, 2024, which is our annual period beginning January 1, 2025. Early adoption is permitted. We are evaluating the impact of this standard. In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (“ASU 2023-09”), which provides more transparency about tax information primarily related to the rate reconciliation and the income taxes paid. The new guidance is effective for fiscal years beginning after December 15, 2024, which will be our annual period beginning January 1, 2025. Early adoption is permitted. We are evaluating the impact of this standard. In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280), Improvements to Reportable Segment Disclosures” (“ASU 2023-07”), which expands reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The new guidance is effective for fiscal years beginning after December 15, 2023, which is our annual period beginning January 1, 2024, and interim periods within fiscal years beginning after December 15, 2024, which will be our interim period beginning January 1, 2025. Early adoption is permitted. We are evaluating the impact of this standard. |
Business Combinations
Business Combinations | 6 Months Ended |
Jun. 29, 2024 | |
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract] | |
Business Combinations | Business Combinations BLR Aerospace, L.L.C. Acquisition In April 2023, we acquired 100.0% of the outstanding equity interests of BLR Aerospace, L.L.C. (“BLR”), a privately-held leading provider of aerodynamic systems that enhance the productivity, performance, and safety of rotary and fixed-wing aircraft on commercial and military platforms. BLR is located in Everett, Washington. The acquisition of BLR added to our strategy to diversify and offer more customized, value-driven engineered products with aftermarket opportunities. The initial purchase price for BLR was $115.0 million, net of cash acquired, all payable in cash, subject to adjustments for working capital. We paid a gross aggregate of $117.0 million in cash upon the closing of the transaction. Subsequent to the closing of the transaction, during the three months ended September 30, 2023, the working capital was finalized, resulting in an immaterial adjustment for a final purchase price of $114.4 million, net of cash acquired. We allocated the gross purchase price of $117.0 million to the assets acquired and liabilities assumed at their estimated fair values. The excess of the purchase price over the aggregate fair values of the net assets was recorded as goodwill. The following table summarizes the estimated fair value of the assets acquired and liabilities assumed at the date of acquisition (in thousands): Estimated Cash $ 2,656 Accounts receivable 4,149 Inventories 12,011 Other current assets 891 Property and equipment 2,632 Operating lease right-of-use assets 874 Intangible assets 55,500 Goodwill 41,193 Total assets acquired 119,906 Current liabilities (2,145) Other non-current liabilities (727) Total liabilities assumed (2,872) Total purchase price allocation $ 117,034 Useful Life Estimated Intangible assets: Technology 23 $ 35,600 Customer relationships 10-22 15,000 Trade name 18 4,900 $ 55,500 The intangible assets acquired of $55.5 million were determined based on the estimated fair values using valuation techniques consistent with the income approach to measure fair value, which represented Level 3 fair value measurements. The useful lives were estimated based on the underlying agreements or the future economic benefit expected to be received from the assets. The values for technology and trade name were assessed using the relief from royalty methodology, while the value for customer relationships was estimated based on a multi-period excess earnings approach. Inputs to the income approach models and other aspects of the allocation of the purchase price require judgment. The more significant inputs used in the technology intangible asset valuation included (i) future revenues, (ii) the technology decay rate, (iii) the royalty rate, and (iv) the discount rate. The more significant inputs used in the customer relationships intangible asset valuation included (i) future revenues, (ii) the projected earnings before interest, taxes, and amortization (“EBITA”) margins, (iii) the customer attrition rates, and (iv) the discount rate. The goodwill of $41.2 million arising from the acquisition is attributable to the benefits we expect to derive from expected synergies from the transaction, including complementary products that will enhance our overall product portfolio, opportunities within new markets, and an acquired assembled workforce. All the goodwill was assigned to the Structural Systems segment. The BLR acquisition, for tax purposes, is deemed an asset acquisition and thus, the goodwill recognized is deductible for income tax purposes. Acquisition related transaction costs were not included as components of consideration transferred but have been expensed as incurred. Total acquisition-related transaction costs incurred by us were zero and $0.5 million during the three months ended June 29, 2024 and July 1, 2023, respectively, and zero and $1.3 million during the six months ended June 29, 2024 and July 1, 2023, respectively, and charged to selling, general and administrative expenses. BLR’s results of operations have been included in our condensed consolidated statements of income since the date of acquisition as part of the Structural Systems segment, and its revenues were less than three percent of total company revenues since the date of acquisition. Pro forma results of operations of the BLR acquisition have not been presented as the effect of the BLR acquisition was not material to our financial results. |
Restructuring Activities
Restructuring Activities | 6 Months Ended |
Jun. 29, 2024 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Activities | Restructuring Activities Summary of 2022 Restructuring Plan In April 2022, management approved and commenced a restructuring plan that will better position us for stronger performance. The restructuring plan will mainly reduce headcount and consolidate facilities. As a result of this restructuring plan, we analyzed the need to write-down inventory and impair long-lived assets, including operating lease right-of-use assets. During the three and six months ended June 29, 2024, we recorded total charges of $2.1 million ($0.9 million of which was recorded as cost of sales In the Electronics Systems segment, we recorded no restructuring charges during the three months ended June 29, 2024. We recorded charges of $0.3 million and $0.2 million during the six months ended June 29, 2024, for severance and benefits that were classified as restructuring charges, and other restructuring charges, respectively. Cumulative through the six months ended June 29, 2024, we recorded total charges for severance and benefits that were classified as restructuring charges, accelerated depreciation of property and equipment that was classified as restructuring charges, charges for inventory write down that was classified as cost of sales, and other restructuring of $9.9 million, $0.3 million, $0.3 million, and $0.3 million, respectively. In the Structural Systems segment, we recorded $0.8 million and $0.4 million during the three months ended June 29, 2024 for severance and benefits that were classified as restructuring charges and other restructuring charges, respectively. We recorded charges of $1.0 million and $1.1 million during the six months ended June 29, 2024, for severance and benefits that were classified as restructuring charges, and other restructuring charges, respectively. Cumulative through the six months ended June 29, 2024, we recorded total charges for severance and benefits that were classified as restructuring charges, accelerated depreciation of property and equipment/impairment of property and equipment that was classified as restructuring charges, charges for inventory write down that was classified as cost of sales, and other restructuring of $6.9 million, $2.0 million, $1.4 million, and $3.9 million, respectively. Our restructuring activities during the six months ended June 29, 2024 were as follows (in thousands): December 31, 2023 Six Months Ended June 29, 2024 June 29, 2024 Balance Charges Cash Payments Non-Cash Payments Change in Estimates Balance Severance and benefits $ 5,389 $ 1,342 $ (2,244) $ — $ — $ 4,487 Property and equipment accelerated depreciation due to restructuring — — — — — — Inventory write down — 857 — (857) — Other — 1,282 (1,282) — — — Ending balance $ 5,389 $ 3,481 $ (3,526) $ (857) $ — $ 4,487 The restructuring activities accrual for severance and benefits of $4.5 million as of June 29, 2024 was included as part of accrued and other liabilities and is expected to be paid out through 2024. |
Derivative Financial Instrument
Derivative Financial Instruments | 6 Months Ended |
Jun. 29, 2024 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | Derivative Financial Instruments Cash Flow Hedges Our cash flow hedges consists of forward interest rate swaps to manage our exposure to interest rate movements on a portion of our debt through January 1, 2031. Our forward interest rate swaps hedge forecasted transactions through January 1, 2031. The notional amounts of derivative instruments are as follows: (Dollars in thousands) June 29, December 31, Derivative instruments designated as hedging instruments: Interest rate contracts $ 150,000 $ 150,000 The following table summarizes the fair value and presentation on the condensed consolidated balance sheets for derivative instruments: (Dollars in thousands) Balance Sheet Location June 29, December 31, Derivative instruments designated as hedging instruments: Interest rate contracts Other assets, current $ 4,794 $ 4,046 Other assets 14,400 11,595 Unrealized gains (losses) associated with our hedging transactions recognized in other comprehensive income are presented in the following table: (Dollars in thousands) (Dollars in thousands) June 29, July 1, June 29, July 1, Recognized in other comprehensive income, net of tax: Interest rate contracts $ 211 $ 3,116 $ 2,412 $ 986 We reclassified gains associated with our cash flow hedges from accumulated other comprehensive income to the condensed income statements when the Forward Interest Rate Swaps became effective as of January 1, 2024 and are presented in the following table: (Dollars in thousands) (Dollars in thousands) June 29, July 1, June 29, July 1, Interest rate contracts: Interest expense $ 1,358 $ — $ 2,698 $ — The pre-tax deferred gains recorded in other comprehensive income that will mature in the next 12 months total $4.7 million. |
Inventories
Inventories | 6 Months Ended |
Jun. 29, 2024 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories consisted of the following: (Dollars in thousands) June 29, December 31, Raw materials and supplies $ 169,652 $ 174,624 Work in process 28,189 22,060 Finished goods 3,990 2,517 Total $ 201,831 $ 199,201 |
Goodwill
Goodwill | 6 Months Ended |
Jun. 29, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Goodwill We perform our annual goodwill impairment test as of the first day of the fourth quarter. If certain factors occur, including significant underperformance of our business relative to expected operating results, significant adverse economic and industry trends, a significant decline in our market capitalization for an extended period of time relative to net book value, a decision to divest individual businesses within a reporting unit, or a decision to group individual businesses differently, we may be required to perform an interim impairment test prior to the fourth quarter. We may use either a qualitative or quantitative approach when testing a reporting unit’s goodwill for impairment. The qualitative approach for potential impairment analysis to determine whether it is more likely than not that the fair value of a reporting unit was less than its carrying amount. The quantitative approach for potential impairment analysis is performed by comparing the fair value of a reporting unit to its carrying value, including goodwill. Fair value is estimated by management using a combination of the income approach (which is based on a discounted cash flow model) and market approach. Management’s cash flow projections include significant judgments and assumptions, including the amount and timing of expected cash flows, long-term growth rates, and discount rates. The cash flows used in the discounted cash flow model are based on our best estimate of future revenues, gross margins, and adjusted after-tax earnings. If any of these assumptions are incorrect, it will impact the estimated fair value of a reporting unit. The market approach also requires management judgment in selecting comparable business acquisitions and the transaction values observed and its related control premiums. No material adverse factors/changes have occurred since the fourth quarter of 2023 that would require us to perform another qualitative or quantitative assessment. As such, for the second quarter of 2024, it was also not more likely than not that the fair values of the reporting units were less than their carrying amounts and thus, the respective goodwill amounts were not deemed to be impaired. In April 2023, we completed the acquisition of BLR. The excess of the purchase price over the aggregate fair values of the net assets was recorded as goodwill. See Note 2 for further information. The carrying amounts of our goodwill were as follows: (Dollars in thousands) Electronic Structural Consolidated Gross goodwill $ 199,157 $ 127,165 $ 326,322 Accumulated goodwill impairment (81,722) — (81,722) Balance at December 31, 2023 $ 117,435 $ 127,165 $ 244,600 Balance at June 29, 2024 $ 117,435 $ 127,165 $ 244,600 |
Accrued and Other Liabilities
Accrued and Other Liabilities | 6 Months Ended |
Jun. 29, 2024 | |
Payables and Accruals [Abstract] | |
Accrued and Other Liabilities | Accrued and Other Liabilities The components of accrued and other liabilities were as follows: (Dollars in thousands) June 29, December 31, Accrued compensation $ 31,318 $ 35,574 Accrued income tax and sales tax 1,100 177 Other 7,875 6,509 Total $ 40,293 $ 42,260 |
Long-Term Debt
Long-Term Debt | 6 Months Ended |
Jun. 29, 2024 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt Long-term debt and the current period interest rates were as follows: (Dollars in thousands) June 29, December 31, Term loans $ 239,063 $ 242,188 Revolving credit facility 23,800 23,800 Total debt 262,863 265,988 Less current portion (10,938) (7,813) Total long-term debt, less current portion 251,925 258,175 Less debt issuance costs - term loans (1,029) (1,214) Total long-term debt, net of debt issuance costs - term loans $ 250,896 $ 256,961 Debt issuance costs - revolving credit facility (1) $ 1,510 $ 1,761 Weighted-average interest rate 7.36 % 7.53 % (1) Included as part of other assets. In July 2022, we completed a refinancing of all our existing debt by entering into a new term loan (“2022 Term Loan”) and a new revolving credit facility (“2022 Revolving Credit Facility”). The 2022 Term Loan is a $250.0 million senior secured loan that matures on July 14, 2027. The 2022 Revolving Credit Facility is a $200.0 million senior secured revolving credit facility that matures on July 14, 2027. The 2022 Term Loan and 2022 Revolving Credit Facility, collectively, represent our credit facilities (“2022 Credit Facilities”). The 2022 Term Loan bears interest, at our option, at a rate equal to either (i) Term Secured Overnight Financing Rate (“Term SOFR”) plus an applicable margin ranging from 1.375% to 2.375% per year or (ii) Base Rate (defined as the highest of [a] Federal Funds Rate plus 0.50%, [b] Bank of America’s prime rate, and [c] Term SOFR plus 1.00%, and if the Base Rate is less than zero percent, it will be deemed zero percent) plus an applicable margin ranging from 0.375% to 1.375% per year, in each case based upon the consolidated total net adjusted leverage ratio. Interest payments are typically paid either on a monthly or quarterly basis, depending on the interest rate selected, on the last business day each month or quarter. In addition, the 2022 Term Loan requires quarterly amortization payments of 0.625% during year one and year two, 1.250% during year three and year four, and 1.875% during year five of the original outstanding principal balance of the 2022 Term Loan amount, on the last business day each quarter. The required quarterly amortization payments began in the fourth quarter of 2022. The 2022 Revolving Credit Facility bears interest, at our option, at a rate equal to either (i) Term SOFR plus an applicable margin ranging from 1.375% to 2.375% per year or (ii) Base Rate (defined as the highest of [a] Federal Funds Rate plus 0.50%, [b] Bank of America’s prime rate, and [c] Term SOFR plus 1.00%, and if the Base Rate is less than zero percent, it will be deemed zero percent) plus an applicable margin ranging from 0.375% to 1.375% per year, in each case based upon the consolidated total net adjusted leverage ratio. Interest payments are typically paid on a monthly or quarterly basis, depending on the interest rate selected, on the last business day each month or quarter. The undrawn portion of the commitment of the 2022 Revolving Credit Facility is subject to a commitment fee ranging from 0.175% to 0.275%, based upon the consolidated total net adjusted leverage ratio, typically paid on a quarterly basis, on the last business day each quarter. However, the 2022 Revolving Credit Facility does not require any principal installment payments. In conjunction with the closing of the 2022 Credit Facilities, we utilized the entire $250.0 million of proceeds from the 2022 Term Loan plus our existing cash on hand to pay off our entire debt balance outstanding of $254.2 million under our prior credit facilities. For each of the three months ended June 29, 2024 and July 1, 2023, we made the required quarterly amortization payments on the 2022 Term Loan of $1.6 million. For each of the six months ended June 29, 2024 and July 1, 2023, we made the required amortization payments on the 2022 Term Loan totaling $3.1 million. As of June 29, 2024, we had $176.0 million of unused borrowing capacity under the 2022 Revolving Credit Facility, after deducting $0.2 million for standby letters of credit. As of June 29, 2024, we were in compliance with all covenants required under the 2022 Credit Facilities. The 2022 Term Loan was considered a modification of debt for some lenders and an extinguishment of debt for other lenders, and thus, a loss of $0.2 million was recorded related to the extinguishment. In addition, the new fees incurred of $0.8 million were capitalized and will be amortized over the life of the 2022 Term Loan. Further, the remaining debt issuance costs related to the prior term loans of $1.0 million as of the modification date will be amortized over the life of the 2022 Term Loan, using the effective interest method. The 2022 Revolving Credit Facility that replaced the prior revolving credit facility was considered a modification of debt except for the portion related to the creditor that is no longer a part of the 2022 Revolving Credit Facility and, in which case, it was considered an extinguishment of debt. As a result, we expensed the portion of the unamortized debt issuance costs related to the prior revolving credit facility that was considered an extinguishment of debt of $0.1 million. In addition, the new fees incurred of $1.7 million as part of the 2022 Revolving Credit Facility were capitalized and will be amortized over the life of the 2022 Revolving Credit Facility. Further, the remaining debt issuance costs related to the prior revolving credit facility of $0.8 million as of the modification date will also be amortized over the life of the 2022 Revolving Credit Facility. The 2022 Credit Facilities were entered into by us (“Parent Company”) and guaranteed by all of our domestic subsidiaries, other than two subsidiaries that were considered minor (“Subsidiary Guarantors”). The Subsidiary Guarantors jointly and severally guarantee the 2022 Credit Facilities. The Parent Company has no independent assets or operations, and therefore, no consolidating financial information for the Parent Company and its subsidiaries is presented. In April 2023, we completed the acquisition of BLR. The initial purchase price for BLR was $115.0 million, net of cash acquired, all payable in cash. We paid a gross aggregate of $117.0 million in cash upon the closing of the transaction. We utilized the 2022 Revolving Credit Facility to complete the acquisition. See Note 2 for further information. In May 2023, we completed a public offering of our common stock resulting in net proceeds of $85.1 million. We utilized the net proceeds plus cash on hand to pay down $85.2 million on the 2022 Revolving Credit Facility. See Note 9 for further information. In November 2021, we entered into derivative contracts, U.S. dollar-one month LIBOR forward interest rate swaps designated as cash flow hedges, all with an effective date of January 1, 2024, for an aggregate total notional amount of $150.0 million, weighted average fixed rate of 1.8%, and all terminating on January 1, 2031 (“Forward Interest Rate Swaps”). The Forward Interest Rate Swaps mature on a monthly basis, with fixed amount payer payment dates on the first day of each calendar month, commencing on February 1, 2024 through January 1, 2031. The Forward Interest Rate Swaps were deemed to be highly effective upon entering into the derivative contracts, and thus, hedge accounting treatment was utilized. Since the Amended Forward Interest Rate Swaps (as defined below) were not effective until January 1, 2024, we only recorded the changes in fair value of the derivative instruments that were highly effective and that were designated and qualified as cash flow hedges in other comprehensive income through December 31, 2023. See Note 1 and Note 4 for further information. In July 2022, as a result of completing a refinancing of our existing debt, we were required to complete an amendment of the Forward Interest Rate Swaps (“Amended Forward Interest Rate Swaps”). The Forward Interest Rate Swaps were based on U.S. dollar-one month LIBOR and were amended to be based on one month Term SOFR as borrowings using LIBOR were no longer available under the 2022 Credit Facilities. Since this was an amendment of just the reference rate as a result of the cessation of LIBOR, utilizing the guidance under ASU 2020-04, we determined the Amended Forward Interest Rate Swaps as of the amendment date to continue to be highly effective. The Amended Forward Interest Rate Swaps weighted average fixed rate is 1.7%, as a result of the difference between U.S. dollar-one month LIBOR and one month Term SOFR. |
Shareholders_ Equity
Shareholders’ Equity | 6 Months Ended |
Jun. 29, 2024 | |
Equity [Abstract] | |
Shareholders’ Equity | Shareholders’ Equity In May 2023, we completed a public offering of 2.3 million shares of our common stock at $40.00 per share, for gross proceeds of $92.0 million. The common stock offering was made under our effective shelf registration statement. We incurred aggregate total out of pocket stock offering related fees of $6.9 million, resulting in net proceeds of $85.1 million. As such, we recorded an increase to common stock at par value of less than $0.1 million with the remaining amount as an increase to additional paid-in capital of $85.1 million. The net proceeds of the public stock offering along with cash on hand were used to pay down $85.2 million on the 2022 Revolving Credit Facility that was drawn on and utilized to complete the acquisition of BLR. See Note 2 and Note 8 for further information. |
Indemnifications
Indemnifications | 6 Months Ended |
Jun. 29, 2024 | |
Disclosure of Guarantees and Indemnifications [Abstract] | |
Indemnifications | Indemnifications We have made guarantees and indemnities under which we may be required to make payments to a guaranteed or indemnified party, in relation to certain transactions, including revenue transactions in the ordinary course of business. Additionally, we indemnify our directors and officers to the maximum extent permitted under the laws of the State of Delaware and have a directors and officers insurance policy that may reduce our exposure in certain circumstances and may enable us to recover a portion of future amounts that may be payable, if any. Moreover, in connection with certain performance center leases, we have indemnified our lessors for certain claims arising from the performance center or the lease. The duration of the guarantees and indemnities varies and, in many cases, is indefinite but subject to applicable statutes of limitations. The majority of guarantees and indemnities do not provide any limitations on the maximum potential future payments we could be obligated to make. Historically, payments related to these guarantees and indemnities have been immaterial. We estimate the fair value of our indemnification obligations as insignificant based on this history and insurance coverage and have, therefore, not recorded any liability for these guarantees and indemnities in the accompanying condensed consolidated balance sheets. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 29, 2024 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The provision for income taxes is determined using an estimated annual effective tax rate, which is generally less than the U.S. Federal statutory rate, primarily due to research and development (“R&D”) tax credits. Our effective tax rate may be subject to fluctuations during the year as new information is obtained, which may affect the assumptions used to estimate the annual effective tax rate, including factors such as expected utilization of R&D tax credits, valuation allowances against deferred tax assets, recognition or derecognition of tax benefits related to uncertain tax positions, and changes in or the interpretation of tax laws in jurisdictions where we conduct business. Also, excess tax benefits and tax detriments related to our equity compensation recognized in the condensed consolidated income statement could result in fluctuations in our effective tax rate period-over-period depending on the volatility of our stock price, number of restricted or performance stock units that vests, and stock options exercised during the period. We recognize deferred tax assets and liabilities, using enacted tax rates, for temporary differences between the financial reporting basis and the tax basis of our assets and liabilities along with net operating loss and tax credit carryovers. We record a valuation allowance against our deferred tax assets to reduce the net carrying value to an amount that we believe is more likely than not to be realized. When we establish or reduce our valuation allowances against our deferred tax assets, the provision for income taxes will increase or decrease, respectively, in the period when that determination is made. We recorded income tax expense of $2.2 million for the three months ended June 29, 2024 compared to $1.0 million for the three months ended July 1, 2023. The increase in income tax expense for the second quarter of 2024 compared to the second quarter of 2023 was primarily due to higher pre-tax income and higher income tax expense related to non-deductible book compensation expenses in the second quarter of 2024 compared to the second quarter of 2023. The increase in income tax expense was partially offset by higher income tax benefits related to the U.S. Federal research and development credit recognized in the second quarter of 2024 compared to the second quarter of 2023. We recorded income tax expense of $4.1 million for the six months ended June 29, 2024 compared to $1.8 million for the six months ended July 1, 2023. The increase in income tax expense for the six months ended June 29, 2024 compared to the six months ended July 1, 2023 was primarily due to higher pre-tax income and higher income tax expense related to non-deductible book compensation expenses in the six months ended June 29, 2024 compared to the six months ended July 1, 2023. The increase in income tax expense was partially offset by higher income tax benefits related to the U.S. Federal research and development credit recognized in the six months ended June 29, 2024 compared to the six months ended July 1, 2023. Our total amount of unrecognized tax benefits was $4.8 million and $4.5 million as of June 29, 2024 and December 31, 2023, respectively. If recognized, $3.0 million would affect the effective tax rate. We record interest and penalty charges, if any, related to uncertain tax positions as a component of tax expense and unrecognized tax benefits. The amounts accrued for interest and penalty charges as of June 29, 2024 and December 31, 2023 were not significant. As a result of statute of limitations set to expire in the fourth quarter of 2024, we expect decreases to our unrecognized tax benefits of approximately $1.0 million in the next twelve months. We file U.S. Federal and state income tax returns. We are subject to examination by the Internal Revenue Service (“IRS”) for tax years after 2019 and by state taxing authorities for tax years after 2018. While we are no longer subject to examination prior to those periods, carryforwards generated prior to those periods may still be adjusted upon examination by the IRS or state taxing authorities if they either have been or will be used in a subsequent period. We believe we have adequately accrued for tax deficiencies or reductions in tax benefits, if any, that could result from the examination and all open audit years. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 29, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies California’s Wage and Hour Laws Complaint In December 2020, a representative action under California’s Private Attorneys General Act was filed against us in the Superior Court for the State of California, County of San Bernardino. We received service of process of this complaint in January 2021. The complaint alleged violations of California’s wage and hour laws relating to our current and former employees and sought attorney’s fees and penalties. We vigorously refuted and defended against these claims and reached a tentative settlement of $0.8 million during the fourth quarter 2021, which was subject to court approval. Thus, we recorded accrued liabilities of $0.8 million as of December 31, 2021. During the second quarter of 2022, additional factual information was identified resulting in an increase in the amount of the tentative settlement to $0.9 million. Therefore, we recorded an additional accrued liabilities of $0.1 million for a total accrued liabilities amount of $0.9 million as of the end of the second quarter of 2022 which remained unchanged as of December 31, 2022 as we were awaiting final court approval of this settlement. Subsequent to final court approval and paying of the $0.9 million in January 2023, during the third quarter of 2023 and upon plaintiff's motion, the court re-opened the settlement agreement to determine whether the class list captured all affected employees. We are appealing this decision and intend to defend our position vigorously. Any amount of additional liability is still undetermined pending the appeal and as such, there is no amount of loss that is probable and reasonably estimable at this time. Thus, no additional accrual was recorded during the three and six months ended June 29, 2024. Groundwater Structural Systems has been directed by California environmental agencies to investigate and take corrective action for groundwater contamination at our facilities located in El Mirage and Monrovia, California. Based on currently available information, we have established an accrual for its estimated liability for such investigation and corrective action of $1.5 million at both June 29, 2024 and December 31, 2023, which is reflected in other long-term liabilities on our condensed consolidated balance sheets. Waste Disposal Structural Systems also faces liability as a potentially responsible party for hazardous waste disposed at landfills located in Casmalia and West Covina, California. Structural Systems and other companies and government entities have entered into consent decrees with respect to these landfills with the United States Environmental Protection Agency and/or California environmental agencies under which certain investigation, remediation and maintenance activities are being performed. Based on currently available information, we preliminarily estimate that the range of our future liabilities in connection with the landfill located in West Covina, California is between $0.4 million and $3.1 million. We have established an accrual for the estimated liability in connection with the West Covina landfill of $0.4 million as of both June 29, 2024 and December 31, 2023, which is reflected in other long-term liabilities on our condensed consolidated balance sheets. Our ultimate liability in connection with these matters will depend upon a number of factors, including changes in existing laws and regulations, the design and cost of construction, operation and maintenance activities, and the allocation of liability among potentially responsible parties. Guaymas Performance Center Fire In June 2020, a fire severely damaged our performance center in Guaymas, Mexico, which is part of our Structural Systems segment. There were no injuries; however, property and equipment, inventories, and tooling in this leased facility were damaged. Our Guaymas performance center, comprised of two buildings with an aggregate total of 62,000 square feet, was severely damaged. The loss of production from the Guaymas performance center was absorbed by our other existing performance centers; however, we have reestablished our operations and are in the process of certification with various customers and ramping up our manufacturing capabilities in a different leased facility with 117,000 square feet in Guaymas. A neighboring, non-related manufacturing facility, also suffered fire damage during the same time as the fire that severely damaged our Guaymas performance center, and in November 2023, the occupant of the neighboring facility filed suit against us in U.S. District Court for the Central District of California seeking unspecified amounts for damages relating to the fire. In addition, subsequent to the quarter end, we received a subrogation demand from our landlord’s insurer, which we are currently evaluating. We intend to defend these matters vigorously and believe we have substantial defenses in relation to these claims. As responsibility for the fire is still undetermined, there is no amount of loss that is probable and reasonably estimable at this time. If we are ultimately deemed to be responsible or party responsible, it is possible we could incur a loss in excess of our insurance coverage limits, which could be material to our cash flow, liquidity, or financial results. Our insurance covers damage, up to a capped amount, to the facility, equipment, unfinished inventory, and other assets at replacement cost, finished goods inventory at selling price, as well as business interruption, third party property damage, and recovery related expenses caused by the fire, less our per claim deductible. The anticipated insurance recoveries related to losses and incremental costs incurred are recognized when receipt is probable. The anticipated insurance recoveries in excess of net book value of the damaged operating assets and business interruption are not recorded until all contingencies related to our claim have been resolved. The insurance claim for damages to our operating assets and business interruption was deemed final and closed by our insurance company during the three months ended July 1, 2023. Thus, the final $3.8 million of insurance recoveries were also received and recorded as other income during the three months ended July 1, 2023. In addition, the remaining general insurance recoveries that were received in 2020 of $3.9 million, but recognition was deferred until all the gain contingencies were resolved, such gain contingencies were deemed resolved and thus, recorded as other income during the three months ended July 1, 2023. Cumulatively, as of July 1, 2023, we received insurance recoveries in aggregate total of $23.7 million, with $7.5 million for business interruption and $16.2 million for damages to property and equipment, inventories, and tooling. Further, all insurance recovery amounts received related to this claim have been recognized up to the amount of net book value loss and presented within the same financial statement line item in the condensed consolidated statements of income resulting in no net impact, with the remaining amounts recognized as other income in our condensed consolidated statements of income when the contingencies were deemed resolved. Other Structural Systems Performance Center Fire In April 2023, a fire damaged a relatively small portion of one of our performance centers in our Structural Systems reporting segment. There were no injuries; however, subsequent to the fire, we determined that some property and equipment in this company-owned facility were damaged. Our insurance covers damage, up to a capped amount, to the property and equipment at replacement cost, as well as business interruption and recovery related expenses caused by the fire, less our per claim deductible. There was a loss of production in this damaged portion of the performance center for a short period of time, but the incident did not otherwise result in significant disruption to customer delivery schedules. Production in this damaged portion resumed later that same quarter. As such, during the three months ended July 1, 2023, we wrote off property and equipment with an aggregate total net book value of $0.2 million. Also during the three months ended July 1, 2023, we received insurance recoveries of $0.3 million (which was net of our deductible of $0.1 million) and thus, such insurance recoveries were also presented within the same financial statement line item in the condensed consolidated statements of income resulting in no net impact. The amount of the insurance recoveries received in excess of the loss on operating assets was deemed a contingent gain, and since the gain contingencies were deemed resolved, the $0.1 million was also recorded as other income during the three months ended July 1, 2023. Finally, during the three months ended December 31, 2023, the insurance claim was deemed final and closed by our insurance company and we received a final payment of $0.3 million, which was recorded as other income. Real Estate Obligations Real estate obligations, which include legally binding minimum lease payments for an executed lease that had not yet commenced, were $5.8 million as of June 29, 2024, and will be paid over the lease term of 10 years. In the normal course of business, Ducommun and its subsidiaries are defendants in certain other litigation, claims and inquiries, including matters relating to environmental laws. In addition, Ducommun makes various commitments and incurs contingent liabilities in the ordinary course of business. While it is not feasible to predict the outcome of these matters, Ducommun does not presently expect that any sum it may be required to pay in connection with these matters would have a material adverse effect on its condensed consolidated financial position, results of operations or cash flows. |
Business Segment Information
Business Segment Information | 6 Months Ended |
Jun. 29, 2024 | |
Segment Reporting [Abstract] | |
Business Segment Information | Business Segment Information We supply products and services primarily to the aerospace and defense industries. Our subsidiaries are organized into two strategic businesses, Electronic Systems and Structural Systems, each of which is a reportable operating segment. Financial information by reportable operating segment was as follows: (Dollars in thousands) (Dollars in thousands) June 29, July 1, June 29, July 1, Net Revenues Electronic Systems $ 101,440 $ 107,124 $ 208,979 $ 212,750 Structural Systems 95,560 80,196 178,868 155,761 Total Net Revenues $ 197,000 $ 187,320 $ 387,847 $ 368,511 Segment Operating Income (1) Electronic Systems $ 16,806 $ 9,528 $ 35,775 $ 19,539 Structural Systems 10,559 5,385 13,427 10,130 27,365 14,913 49,202 29,669 Corporate General and Administrative Expenses (2) (13,441) (9,908) (22,656) (18,292) Total Operating Income $ 13,924 $ 5,005 $ 26,546 $ 11,377 Depreciation and Amortization Expenses Electronic Systems $ 3,662 $ 3,561 $ 7,294 $ 7,059 Structural Systems 4,547 4,335 9,209 8,767 Corporate Administration 36 58 95 117 Total Depreciation and Amortization Expenses $ 8,245 $ 7,954 $ 16,598 $ 15,943 Capital Expenditures Electronic Systems $ 1,143 $ 1,923 $ 1,939 $ 3,774 Structural Systems 1,353 4,111 2,877 7,241 Corporate Administration 723 — 3,148 — Total Capital Expenditures $ 3,219 $ 6,034 $ 7,964 $ 11,015 (1) The results for the three months and six months ended June 29, 2024 include BLR’s results of operations, which have been included in our condensed consolidated statements of income since the date of acquisition as part of the Structural Systems segment. See Note 2. (2) Includes costs not allocated to either the Electronic Systems or Structural Systems operating segments. Segment assets include assets directly identifiable to or allocated to each segment. Our segment assets are as follows: (Dollars in thousands) June 29, December 31, Total Assets Electronic Systems $ 522,378 $ 505,371 Structural Systems (1) 553,049 552,641 Corporate Administration (2) 56,073 62,907 Total Assets $ 1,131,500 $ 1,120,919 Goodwill and Intangibles Electronic Systems $ 168,569 $ 173,214 Structural Systems (1) 233,998 237,729 Total Goodwill and Intangibles $ 402,567 $ 410,943 (1) In April 2023, we acquired 100.0% of the outstanding equity interests of BLR for an initial purchase price of $115.0 million, net of cash acquired. We allocated the gross purchase price of $117.0 million to the assets acquired and liabilities assumed at their estimated fair values. The excess of the purchase price over the aggregate fair values of the net assets was recorded as goodwill. See Note 2. (2) Includes assets not specifically identified to or allocated to either the Electronic Systems or Structural Systems operating segments, including cash and cash equivalents. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 29, 2024 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The unaudited condensed consolidated financial statements include the accounts of Ducommun Incorporated and its subsidiaries (“Ducommun,” the “Company,” “we,” “us” or “our”), after eliminating intercompany balances and transactions. The December 31, 2023 condensed consolidated balance sheet data was derived from audited financial statements, but does not contain all disclosures required by accounting principles generally accepted in the United States of America (“GAAP”). Our significant accounting policies were described in Part IV, Item 15(a)(1), “Note 1. Summary of Significant Accounting Policies” in our Annual Report on Form 10-K for the year ended December 31, 2023 (“2023 Form 10-K”). The financial information included in this Quarterly Report on Form 10-Q (“Form 10-Q”) should be read in conjunction with the 2023 Form 10-K. In the opinion of management, all adjustments, including recurring accruals, have been made that are necessary to fairly state our condensed consolidated financial position, statements of income, comprehensive income, changes in shareholders’ equity, and cash flows in accordance with GAAP for the periods covered by this Form 10-Q. The results of operations for the three and six months ended June 29, 2024 are not necessarily indicative of the results to be expected for the full year ending December 31, 2024. Our fiscal quarters typically end on the Saturday closest to the end of March, June and September for the first three fiscal quarters of each year, and on December 31 for our fourth fiscal quarter. As a result of using fiscal quarters for the first three quarters combined with leap years, our first and fourth fiscal quarters can range between 12 1/2 weeks to 13 1/2 weeks while the second and third fiscal quarters remain at a constant 13 weeks per fiscal quarter. |
Use of Estimates | Use of Estimates |
Earnings Per Share | Earnings Per Share Basic earnings per share are computed by dividing income available to common shareholders by the weighted-average number of common shares outstanding in each period. Diluted earnings per share is computed by dividing income available to common shareholders by the weighted-average number of common shares outstanding, plus any potentially dilutive shares that could be issued if exercised or converted into common stock in each period. |
Fair Value | Fair Value Assets and liabilities that are measured, recorded or disclosed at fair value on a recurring basis are categorized using the fair value hierarchy. The fair value hierarchy has three levels based on the reliability of the inputs used to determine the fair value. Level 1, the highest level, refers to the values determined based on quoted prices in active markets for identical assets. Level 2 refers to fair values estimated using significant observable inputs. Level 3, the lowest level, includes fair values estimated using significant unobservable inputs. We have money market funds which are included as cash and cash equivalents. We also have forward interest rate swap agreements and the fair value of the forward interest rate swap agreements was determined using pricing models that use observable market inputs as of the balance sheet date, a Level 2 measurement. |
Cash and Cash Equivalents | Cash and Cash Equivalents |
Derivative Instruments | Derivative Instruments We recognize derivative instruments on our condensed consolidated balance sheets at their fair value. On the date that we enter into a derivative contract, we designate the derivative instrument as a fair value hedge, a cash flow hedge, or a derivative instrument that will not be accounted for using hedge accounting methods. In November 2021, we entered into forward interest rate swap agreements with an aggregate notional amount of $150.0 million, all with an effective date of January 1, 2024 (“Forward Interest Rate Swaps”), to manage our exposure to interest rate movements on a portion of our debt. At the time we entered into the Forward Interest Rate Swaps, there was a high probability of forecasted interest payments on our debts occurring and the swaps were highly effective in offsetting those interest payments; therefore, we elected to apply cash flow hedge accounting. In July 2022, as a result of refinancing all our existing debt, which allowed borrowing based on a Secured Overnight Financing Rate (“SOFR”), we were required to complete an amendment of the Forward Interest Rate Swaps from One Month London Interbank Offered Rate (“LIBOR”) to One Month Term SOFR (“Amended Forward Interest Rate Swaps”), which occurred on the same day. After the transition of the Forward Interest Rate Swaps and debt to SOFR was completed, we determined the hedging relationships were still highly effective as of the amendment date. See Note 4 and Note 8. As of June 29, 2024, all of our derivative instruments were designated as cash flow hedges. We record changes in the fair value of a derivative instrument that is highly effective and that is designated and qualifies as a cash flow hedge in other comprehensive income (loss), net of tax until our earnings are affected by the variability of cash flows of the underlying hedged item. We report changes in the fair values of derivative instruments that are not designated or do not qualify for hedge accounting in current period earnings. We classify cash flows from derivative instruments in the condensed consolidated statements of cash flows in the same category as the item being hedged or on a basis consistent with the nature of the instrument. Prior to the Amended Forward Interest Rate Swaps being effective on January 1, 2024, we only recorded the changes in fair value of the derivative instruments that were highly effective and that were designated and qualified as cash flow hedges prior to the effective date. See Note 4. When we determine that a derivative instrument is not highly effective as a hedge, we discontinue hedge accounting prospectively. In all situations in which we discontinue hedge accounting and the derivative instrument remains outstanding, we will carry the derivative instrument at its fair value on our condensed consolidated balance sheets and recognize subsequent changes in its fair value in our current period earnings. |
Inventories | Inventories Inventories are stated at the lower of cost or net realizable value with cost being determined using a moving average cost basis for raw materials and actual cost for work-in-process and finished goods. The majority of our inventory is charged to cost of sales as raw materials are placed into production. Inventoried costs include raw materials, outside processing, direct labor and allocated overhead, adjusted for any abnormal amounts of idle performance center expense, freight, handling costs, and wasted materials (spoilage) incurred. We assess the inventory carrying value and reduce it, if necessary, to its net realizable value based on customer orders on hand, and internal demand forecasts using management’s best estimates given information currently available. The majority of our revenues are recognized over time, however, for revenue contracts where revenue is recognized using the point in time method, inventory is not reduced until it is shipped or transfer of control to the customer has occurred. Our ending inventory consists of raw materials, work-in-process, and finished goods. |
Accumulated Other Comprehensive Income | Accumulated Other Comprehensive Income Accumulated other comprehensive income, as reflected on the condensed consolidated balance sheets under the equity section, was comprised of cumulative pension and retirement liability adjustments, net of tax, and change in net unrealized gains and losses on cash flow hedges, net of tax. |
Revenue Recognition | Revenue Recognition Our customers typically engage us to manufacture products based on designs and specifications provided by the end-use customer. This requires the building of tooling and manufacturing first article inspection products (prototypes) before volume manufacturing. Contracts with our customers generally include a termination for convenience clause. We have a significant number of contracts that are started and completed within the same year, as well as contracts derived from long-term agreements and programs that can span several years. We recognize revenue under ASC 606, “Revenue from Contracts with Customers” (“ASC 606”), which utilizes a five-step model. The definition of a contract for us is typically defined as a customer purchase order as this is when we achieve an enforceable right to payment. The majority of our contracts are firm fixed-price contracts. The deliverables within a customer purchase order are analyzed to determine the number of performance obligations. In addition, at times, in order to achieve economies of scale and based on our customer’s forecasted demand, we may build in advance of receiving a purchase order from our customer. When that occurs, we would not recognize revenue until we have received the customer purchase order. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account under ASC 606. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, control is transferred and the performance obligation is satisfied. The majority of our contracts have a single performance obligation as the promise to transfer the individual goods or services are highly interrelated or met the series guidance. For contracts with multiple performance obligations, we allocate the contract transaction price to each performance obligation using our best estimate of the standalone selling price of each distinct good or service in the contract. The primary method used to estimate the standalone selling price is the expected cost plus a margin approach, under which we forecast our expected costs of satisfying a performance obligation and then add an appropriate margin for that distinct good or service. We manufacture most products to customer specifications, and the product cannot be easily modified for another customer. As such, these products are deemed to have no alternative use once the manufacturing process begins. In the event the customer invokes a termination for convenience clause, we would be entitled to costs incurred to date plus a reasonable profit. Contract costs typically include labor, materials, overhead, and when applicable, subcontractor costs. For most of our products, we are building assets with no alternative use and have enforceable right to payment, and thus, we recognize revenue using the over time method. The majority of our performance obligations are satisfied over time as work progresses. Typically, revenue is recognized over time using an input measure (i.e., costs incurred to date relative to total estimated costs at completion, also known as cost-to-cost plus reasonable profit) to measure progress. Our typical revenue contract is a firm fixed price contract, and the cost of raw materials could make up a significant amount of the total costs incurred. As such, we believe using the total costs incurred input method would be the most appropriate method. While the cost of raw materials could make up a significant amount of the total costs incurred, there is a direct relationship between our inputs and the transfer of control of goods or services to the customer. |
Recent Accounting Pronouncements and Recently Issued Accounting Standards | Recent Accounting Pronouncements Recently Issued Accounting Standards In March 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024-02, “Codification Improvements - Amendments to Remove References to the Concepts Statements” (“ASU 2024-02”), which removed references to various FASB Concepts Statements and updates technical corrections such as conforming amendments, clarification to guidance, simplifications to wording or the structure of guidance, and other minor improvements. The new guidance is effective for fiscal years beginning after December 15, 2024, which is our annual period beginning January 1, 2025. Early adoption is permitted. We are evaluating the impact of this standard. In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (“ASU 2023-09”), which provides more transparency about tax information primarily related to the rate reconciliation and the income taxes paid. The new guidance is effective for fiscal years beginning after December 15, 2024, which will be our annual period beginning January 1, 2025. Early adoption is permitted. We are evaluating the impact of this standard. In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280), Improvements to Reportable Segment Disclosures” (“ASU 2023-07”), which expands reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The new guidance is effective for fiscal years beginning after December 15, 2023, which is our annual period beginning January 1, 2024, and interim periods within fiscal years beginning after December 15, 2024, which will be our interim period beginning January 1, 2025. Early adoption is permitted. We are evaluating the impact of this standard. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 29, 2024 | |
Accounting Policies [Abstract] | |
Schedule of Cash Flow, Supplemental Disclosures | Supplemental Cash Flow Information (Dollars in thousands) Six Months Ended June 29, July 1, Interest paid, net $ 7,372 $ 9,529 Taxes paid, net $ 4,001 $ 10,038 Non-cash activities: Purchases of property and equipment not paid $ 479 $ 1,291 |
Schedule of Weighted Average Number of Shares Outstanding Used to Compute Earnings Per Share | The net income and weighted-average common shares outstanding used to compute earnings per share were as follows: (Dollars in thousands, (Dollars in thousands, Three Months Ended Six Months Ended June 29, July 1, June 29, July 1, Net income $ 7,724 $ 2,374 $ 14,573 $ 7,605 Weighted-average number of common shares outstanding Basic weighted-average common shares outstanding 14,775 13,403 14,735 12,799 Dilutive potential common shares 186 196 219 276 Diluted weighted-average common shares outstanding 14,961 13,599 14,954 13,075 Earnings per share Basic $ 0.52 $ 0.18 $ 0.99 $ 0.59 Diluted $ 0.52 $ 0.17 $ 0.97 $ 0.58 |
Schedule of Weighted Average Number of Shares Outstanding Excluded from Computation of Diluted Earnings | Potentially dilutive stock awards, as shown below, were excluded from the computation of diluted earnings per share because their inclusion would have been anti-dilutive. However, these awards may be potentially dilutive common shares in the future. (In thousands) (In thousands) Three Months Ended Six Months Ended June 29, July 1, June 29, July 1, Stock options and stock units 51 111 56 56 |
Schedule of Estimates at Completion | Net cumulative favorable and unfavorable catch-up adjustments to contracts had the following impact on our operating results: (Dollars in thousands) (Dollars in thousands) Three Months Ended Six Months Ended June 29, July 1, June 29, July 1, Total net revenues $ 387 $ (4,184) $ (1,548) $ (7,440) Operating income $ 387 $ (4,184) $ (1,548) $ (7,440) |
Schedule of Contract with Customer, Asset and Liability | Contract assets and contract liabilities from revenue contracts with customers are as follows: (Dollars in thousands) June 29, December 31, Contract assets $ 210,314 $ 177,686 Contract liabilities $ 50,034 $ 53,492 |
Schedule of Disaggregation of Revenue | In addition to the revenue categories disclosed above, the following table reflects our revenue disaggregated by major end-use market: (Dollars in thousands) (Dollars in thousands) Three Months Ended Six Months Ended June 29, July 1, June 29, July 1, Consolidated Ducommun Military and space $ 100,538 $ 97,370 $ 199,467 $ 195,040 Commercial aerospace 86,643 76,764 166,560 148,584 Industrial 9,819 13,186 21,820 24,887 Total $ 197,000 $ 187,320 $ 387,847 $ 368,511 Electronic Systems Military and space $ 69,987 $ 71,772 $ 142,492 $ 145,099 Commercial aerospace 21,634 22,166 44,667 42,764 Industrial 9,819 13,186 21,820 24,887 Total $ 101,440 $ 107,124 $ 208,979 $ 212,750 Structural Systems Military and space $ 30,551 $ 25,598 $ 56,975 $ 49,941 Commercial aerospace 65,009 54,598 121,893 105,820 Total $ 95,560 $ 80,196 $ 178,868 $ 155,761 |
Business Combinations (Tables)
Business Combinations (Tables) | 6 Months Ended |
Jun. 29, 2024 | |
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract] | |
Schedule of Business Acquisitions, by Acquisition | The following table summarizes the estimated fair value of the assets acquired and liabilities assumed at the date of acquisition (in thousands): Estimated Cash $ 2,656 Accounts receivable 4,149 Inventories 12,011 Other current assets 891 Property and equipment 2,632 Operating lease right-of-use assets 874 Intangible assets 55,500 Goodwill 41,193 Total assets acquired 119,906 Current liabilities (2,145) Other non-current liabilities (727) Total liabilities assumed (2,872) Total purchase price allocation $ 117,034 |
Schedule of Finite-Lived and Indefinite-Lived Intangible Assets Acquired as Part of Business Combination | Useful Life Estimated Intangible assets: Technology 23 $ 35,600 Customer relationships 10-22 15,000 Trade name 18 4,900 $ 55,500 |
Restructuring Activities (Table
Restructuring Activities (Tables) | 6 Months Ended |
Jun. 29, 2024 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring Activities | Our restructuring activities during the six months ended June 29, 2024 were as follows (in thousands): December 31, 2023 Six Months Ended June 29, 2024 June 29, 2024 Balance Charges Cash Payments Non-Cash Payments Change in Estimates Balance Severance and benefits $ 5,389 $ 1,342 $ (2,244) $ — $ — $ 4,487 Property and equipment accelerated depreciation due to restructuring — — — — — — Inventory write down — 857 — (857) — Other — 1,282 (1,282) — — — Ending balance $ 5,389 $ 3,481 $ (3,526) $ (857) $ — $ 4,487 |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 6 Months Ended |
Jun. 29, 2024 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Notional Amounts and Fair Values | The notional amounts of derivative instruments are as follows: (Dollars in thousands) June 29, December 31, Derivative instruments designated as hedging instruments: Interest rate contracts $ 150,000 $ 150,000 The following table summarizes the fair value and presentation on the condensed consolidated balance sheets for derivative instruments: (Dollars in thousands) Balance Sheet Location June 29, December 31, Derivative instruments designated as hedging instruments: Interest rate contracts Other assets, current $ 4,794 $ 4,046 Other assets 14,400 11,595 |
Schedule of Unrealized Gains (Losses) on Hedging Transactions | Unrealized gains (losses) associated with our hedging transactions recognized in other comprehensive income are presented in the following table: (Dollars in thousands) (Dollars in thousands) June 29, July 1, June 29, July 1, Recognized in other comprehensive income, net of tax: Interest rate contracts $ 211 $ 3,116 $ 2,412 $ 986 |
Schedule of Cash Flow Hedges included in Accumulated Other Comprehensive Income (Loss) | We reclassified gains associated with our cash flow hedges from accumulated other comprehensive income to the condensed income statements when the Forward Interest Rate Swaps became effective as of January 1, 2024 and are presented in the following table: (Dollars in thousands) (Dollars in thousands) June 29, July 1, June 29, July 1, Interest rate contracts: Interest expense $ 1,358 $ — $ 2,698 $ — |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Jun. 29, 2024 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories consisted of the following: (Dollars in thousands) June 29, December 31, Raw materials and supplies $ 169,652 $ 174,624 Work in process 28,189 22,060 Finished goods 3,990 2,517 Total $ 201,831 $ 199,201 |
Goodwill (Tables)
Goodwill (Tables) | 6 Months Ended |
Jun. 29, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The carrying amounts of our goodwill were as follows: (Dollars in thousands) Electronic Structural Consolidated Gross goodwill $ 199,157 $ 127,165 $ 326,322 Accumulated goodwill impairment (81,722) — (81,722) Balance at December 31, 2023 $ 117,435 $ 127,165 $ 244,600 Balance at June 29, 2024 $ 117,435 $ 127,165 $ 244,600 |
Accrued and Other Liabilities (
Accrued and Other Liabilities (Tables) | 6 Months Ended |
Jun. 29, 2024 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Liabilities | The components of accrued and other liabilities were as follows: (Dollars in thousands) June 29, December 31, Accrued compensation $ 31,318 $ 35,574 Accrued income tax and sales tax 1,100 177 Other 7,875 6,509 Total $ 40,293 $ 42,260 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 6 Months Ended |
Jun. 29, 2024 | |
Debt Disclosure [Abstract] | |
Schedule of Long Term Debt | Long-term debt and the current period interest rates were as follows: (Dollars in thousands) June 29, December 31, Term loans $ 239,063 $ 242,188 Revolving credit facility 23,800 23,800 Total debt 262,863 265,988 Less current portion (10,938) (7,813) Total long-term debt, less current portion 251,925 258,175 Less debt issuance costs - term loans (1,029) (1,214) Total long-term debt, net of debt issuance costs - term loans $ 250,896 $ 256,961 Debt issuance costs - revolving credit facility (1) $ 1,510 $ 1,761 Weighted-average interest rate 7.36 % 7.53 % (1) Included as part of other assets. |
Business Segment Information (T
Business Segment Information (Tables) | 6 Months Ended |
Jun. 29, 2024 | |
Segment Reporting [Abstract] | |
Schedule of Financial Information by Reportable Segment | Financial information by reportable operating segment was as follows: (Dollars in thousands) (Dollars in thousands) June 29, July 1, June 29, July 1, Net Revenues Electronic Systems $ 101,440 $ 107,124 $ 208,979 $ 212,750 Structural Systems 95,560 80,196 178,868 155,761 Total Net Revenues $ 197,000 $ 187,320 $ 387,847 $ 368,511 Segment Operating Income (1) Electronic Systems $ 16,806 $ 9,528 $ 35,775 $ 19,539 Structural Systems 10,559 5,385 13,427 10,130 27,365 14,913 49,202 29,669 Corporate General and Administrative Expenses (2) (13,441) (9,908) (22,656) (18,292) Total Operating Income $ 13,924 $ 5,005 $ 26,546 $ 11,377 Depreciation and Amortization Expenses Electronic Systems $ 3,662 $ 3,561 $ 7,294 $ 7,059 Structural Systems 4,547 4,335 9,209 8,767 Corporate Administration 36 58 95 117 Total Depreciation and Amortization Expenses $ 8,245 $ 7,954 $ 16,598 $ 15,943 Capital Expenditures Electronic Systems $ 1,143 $ 1,923 $ 1,939 $ 3,774 Structural Systems 1,353 4,111 2,877 7,241 Corporate Administration 723 — 3,148 — Total Capital Expenditures $ 3,219 $ 6,034 $ 7,964 $ 11,015 (1) The results for the three months and six months ended June 29, 2024 include BLR’s results of operations, which have been included in our condensed consolidated statements of income since the date of acquisition as part of the Structural Systems segment. See Note 2. (2) Includes costs not allocated to either the Electronic Systems or Structural Systems operating segments. |
Schedule of Segment Assets | Our segment assets are as follows: (Dollars in thousands) June 29, December 31, Total Assets Electronic Systems $ 522,378 $ 505,371 Structural Systems (1) 553,049 552,641 Corporate Administration (2) 56,073 62,907 Total Assets $ 1,131,500 $ 1,120,919 Goodwill and Intangibles Electronic Systems $ 168,569 $ 173,214 Structural Systems (1) 233,998 237,729 Total Goodwill and Intangibles $ 402,567 $ 410,943 (1) In April 2023, we acquired 100.0% of the outstanding equity interests of BLR for an initial purchase price of $115.0 million, net of cash acquired. We allocated the gross purchase price of $117.0 million to the assets acquired and liabilities assumed at their estimated fair values. The excess of the purchase price over the aggregate fair values of the net assets was recorded as goodwill. See Note 2. (2) Includes assets not specifically identified to or allocated to either the Electronic Systems or Structural Systems operating segments, including cash and cash equivalents. |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Narrative (Details) $ / shares in Units, $ in Thousands | 6 Months Ended | ||||
Jul. 15, 2024 $ / shares | Apr. 08, 2024 $ / shares | Jun. 29, 2024 USD ($) segment | Dec. 31, 2023 USD ($) | Nov. 30, 2021 USD ($) | |
Significant Accounting Policies [Line Items] | |||||
Number of reportable segments | segment | 2 | ||||
Number of operating segments | segment | 2 | ||||
Shares acquired (in dollars per share) | $ / shares | $ 60 | ||||
Provision for loss on contracts | $ 5,200 | $ 5,400 | |||
Production cost of contracts | 6,181 | $ 7,778 | |||
Contract liability revenue | 21,000 | ||||
Remaining performance obligation | $ 840,000 | ||||
Subsequent event | |||||
Significant Accounting Policies [Line Items] | |||||
Shares acquired (in dollars per share) | $ / shares | $ 65 | ||||
Interest rate swap | |||||
Significant Accounting Policies [Line Items] | |||||
Notional amount | $ 150,000 | ||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-07-01 | |||||
Significant Accounting Policies [Line Items] | |||||
Remaining performance obligation, percentage | 65% | ||||
Remaining performance obligation, period | 12 months |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Supplemental Cash Flow Items (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 29, 2024 | Jul. 01, 2023 | |
Supplemental Cash Flow Information [Abstract] | ||
Interest paid, net | $ 7,372 | $ 9,529 |
Taxes paid, net | 4,001 | 10,038 |
Non-cash activities: | ||
Purchases of property and equipment not paid | $ 479 | $ 1,291 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Weighted Average Number of Shares Outstanding Used to Compute Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 29, 2024 | Mar. 30, 2024 | Jul. 01, 2023 | Apr. 01, 2023 | Jun. 29, 2024 | Jul. 01, 2023 | |
Accounting Policies [Abstract] | ||||||
Net income | $ 7,724 | $ 6,849 | $ 2,374 | $ 5,231 | $ 14,573 | $ 7,605 |
Weighted-average number of common shares outstanding | ||||||
Basic weighted-average common shares outstanding (in shares) | 14,775 | 13,403 | 14,735 | 12,799 | ||
Dilutive potential common shares (in shares) | 186 | 196 | 219 | 276 | ||
Diluted weighted-average common shares outstanding (in shares) | 14,961 | 13,599 | 14,954 | 13,075 | ||
Earnings per share | ||||||
Basic (in dollars per share) | $ 0.52 | $ 0.18 | $ 0.99 | $ 0.59 | ||
Diluted (in dollars per share) | $ 0.52 | $ 0.17 | $ 0.97 | $ 0.58 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Weighted Average Number of Shares Outstanding Excluded from Computation of Diluted Earnings (Details) - shares shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 29, 2024 | Jul. 01, 2023 | Jun. 29, 2024 | Jul. 01, 2023 | |
Stock options and stock units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Stock options and stock units (in shares) | 51 | 111 | 56 | 56 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Estimates at Completion (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 29, 2024 | Jul. 01, 2023 | Jun. 29, 2024 | Jul. 01, 2023 | |
Disaggregation of Revenue [Line Items] | ||||
Total net revenues | $ 197,000 | $ 187,320 | $ 387,847 | $ 368,511 |
Operating income | 13,924 | 5,005 | 26,546 | 11,377 |
EAC adjustment | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenues | 387 | (4,184) | (1,548) | (7,440) |
Operating income | $ 387 | $ (4,184) | $ (1,548) | $ (7,440) |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies - Contract Assets and Liabilities (Details) - USD ($) $ in Thousands | Jun. 29, 2024 | Dec. 31, 2023 |
Accounting Policies [Abstract] | ||
Contract assets | $ 210,314 | $ 177,686 |
Contract liabilities | $ 50,034 | $ 53,492 |
Summary of Significant Accou_10
Summary of Significant Accounting Policies - Disaggregated Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 29, 2024 | Jul. 01, 2023 | Jun. 29, 2024 | Jul. 01, 2023 | |
Disaggregation of Revenue [Line Items] | ||||
Total net revenues | $ 197,000 | $ 187,320 | $ 387,847 | $ 368,511 |
Electronic Systems | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenues | 101,440 | 107,124 | 208,979 | 212,750 |
Structural Systems | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenues | 95,560 | 80,196 | 178,868 | 155,761 |
Military and space | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenues | 100,538 | 97,370 | 199,467 | 195,040 |
Military and space | Electronic Systems | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenues | 69,987 | 71,772 | 142,492 | 145,099 |
Military and space | Structural Systems | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenues | 30,551 | 25,598 | 56,975 | 49,941 |
Commercial aerospace | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenues | 86,643 | 76,764 | 166,560 | 148,584 |
Commercial aerospace | Electronic Systems | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenues | 21,634 | 22,166 | 44,667 | 42,764 |
Commercial aerospace | Structural Systems | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenues | 65,009 | 54,598 | 121,893 | 105,820 |
Industrial | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenues | 9,819 | 13,186 | 21,820 | 24,887 |
Industrial | Electronic Systems | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenues | $ 9,819 | $ 13,186 | $ 21,820 | $ 24,887 |
Business Combinations - Narrati
Business Combinations - Narrative (Details) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 11 Months Ended | ||||
Apr. 30, 2023 USD ($) | Jun. 29, 2024 USD ($) | Sep. 30, 2023 USD ($) | Jul. 01, 2023 USD ($) | Jun. 29, 2024 USD ($) | Jul. 01, 2023 USD ($) | Mar. 30, 2024 | Dec. 31, 2023 USD ($) | |
Business Acquisition [Line Items] | ||||||||
Payments to acquisition, net of cash acquired | $ 0 | $ 114,353,000 | ||||||
Goodwill | $ 244,600,000 | 244,600,000 | $ 244,600,000 | |||||
BLR Aerospace, LLLC | ||||||||
Business Acquisition [Line Items] | ||||||||
Percentage of outstanding common stock acquired | 100% | |||||||
Payments for acquisition of BLR Aerospace L.L.C., net of cash acquired | $ 115,000,000 | |||||||
Payments to acquire business | 117,000,000 | |||||||
Working capital adjustment | $ 0 | |||||||
Payments to acquisition, net of cash acquired | $ 114,400,000 | |||||||
Intangible assets | 55,500,000 | |||||||
Goodwill | $ 41,193,000 | |||||||
Acquisition related costs | $ 0 | $ 500,000 | $ 0 | $ 1,300,000 | ||||
Revenue of acquiree since acquisition as a percentage of total revenue | 0.03 |
Business Combinations - Fair Va
Business Combinations - Fair Value of Assets and Liabilities Acquired (Details) - USD ($) $ in Thousands | Jun. 29, 2024 | Dec. 31, 2023 | Apr. 30, 2023 |
Business Acquisition [Line Items] | |||
Goodwill | $ 244,600 | $ 244,600 | |
BLR Aerospace, LLLC | |||
Business Acquisition [Line Items] | |||
Cash | $ 2,656 | ||
Accounts receivable | 4,149 | ||
Inventories | 12,011 | ||
Other current assets | 891 | ||
Property and equipment | 2,632 | ||
Operating lease right-of-use assets | 874 | ||
Intangible assets | 55,500 | ||
Goodwill | 41,193 | ||
Total assets acquired | 119,906 | ||
Current liabilities | (2,145) | ||
Other non-current liabilities | (727) | ||
Total liabilities assumed | (2,872) | ||
Total purchase price allocation | $ 117,034 |
Business Combinations - Estimat
Business Combinations - Estimated Fair Value of Intangible Assets Acquired (Details) - BLR Aerospace, LLLC $ in Thousands | Apr. 30, 2023 USD ($) |
Business Acquisition [Line Items] | |
Intangible assets | $ 55,500 |
Technology | |
Business Acquisition [Line Items] | |
Useful Life (In years) | 23 years |
Finite-lived intangibles | $ 35,600 |
Customer relationships | |
Business Acquisition [Line Items] | |
Finite-lived intangibles | $ 15,000 |
Customer relationships | Minimum | |
Business Acquisition [Line Items] | |
Useful Life (In years) | 10 years |
Customer relationships | Maximum | |
Business Acquisition [Line Items] | |
Useful Life (In years) | 22 years |
Trade name | |
Business Acquisition [Line Items] | |
Useful Life (In years) | 18 years |
Finite-lived intangibles | $ 4,900 |
Restructuring Activities - Narr
Restructuring Activities - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 27 Months Ended | |||
Jun. 29, 2024 | Jul. 01, 2023 | Jun. 29, 2024 | Jul. 01, 2023 | Jun. 29, 2024 | Dec. 31, 2023 | |
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charges | $ 1,254 | $ 4,769 | $ 2,624 | $ 8,939 | ||
Cost of Sales | 145,761 | $ 147,198 | 289,665 | $ 291,622 | ||
Severance and benefits | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charges | $ 9,900 | |||||
Property and equipment accelerated depreciation due to restructuring | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charges | 300 | |||||
Inventory write down | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Cost of Sales | 300 | |||||
Other restructuring | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charges | 300 | |||||
2022 Restructuring Plan | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charges | 2,100 | 3,481 | ||||
Cumulative restructuring charges | 25,000 | |||||
Cost of Sales | 900 | 900 | ||||
Cumulative cost of sales | 1,700 | |||||
Restructuring reserve | $ 4,487 | $ 4,487 | 4,487 | $ 5,389 | ||
Restructuring Charges, Statement of Income or Comprehensive Income [Extensible Enumeration] | Cost of Sales | Cost of Sales | ||||
2022 Restructuring Plan | Severance and benefits | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charges | $ 1,342 | |||||
Restructuring reserve | $ 4,487 | 4,487 | 4,487 | 5,389 | ||
2022 Restructuring Plan | Severance and benefits | Electronic Systems | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charges | 0 | 300 | ||||
2022 Restructuring Plan | Severance and benefits | Structural Systems | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charges | 800 | 1,000 | ||||
Other restructuring charges | 6,900 | |||||
2022 Restructuring Plan | Property and equipment accelerated depreciation due to restructuring | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charges | 0 | |||||
Restructuring reserve | 0 | 0 | 0 | 0 | ||
2022 Restructuring Plan | Property and equipment accelerated depreciation due to restructuring | Structural Systems | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Other restructuring charges | 2,000 | |||||
2022 Restructuring Plan | Inventory write down | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charges | 857 | |||||
Restructuring reserve | 0 | 0 | 0 | 0 | ||
2022 Restructuring Plan | Inventory write down | Structural Systems | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Other restructuring charges | 1,400 | |||||
2022 Restructuring Plan | Other restructuring | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charges | 1,282 | |||||
Restructuring reserve | 0 | 0 | 0 | $ 0 | ||
2022 Restructuring Plan | Other restructuring | Electronic Systems | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Charges | 200 | |||||
2022 Restructuring Plan | Other restructuring | Structural Systems | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charges | 400 | 1,100 | ||||
Other restructuring charges | 3,900 | |||||
2022 Restructuring Plan | Minimum | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Expected restructuring costs | 3,000 | 3,000 | 3,000 | |||
2022 Restructuring Plan | Maximum | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Expected restructuring costs | $ 4,000 | $ 4,000 | $ 4,000 |
Restructuring Activities - Othe
Restructuring Activities - Other Restructuring Activities (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 27 Months Ended | ||
Jun. 29, 2024 | Jul. 01, 2023 | Jun. 29, 2024 | Jul. 01, 2023 | Jun. 29, 2024 | |
Restructuring Reserve [Roll Forward] | |||||
Charges | $ 1,254 | $ 4,769 | $ 2,624 | $ 8,939 | |
2022 Restructuring Plan | |||||
Restructuring Reserve [Roll Forward] | |||||
Beginning balance | 5,389 | ||||
Charges | 2,100 | 3,481 | |||
Cash Payments | (3,526) | ||||
Non-Cash Payments | (857) | ||||
Change in Estimates | 0 | ||||
Ending balance | 4,487 | 4,487 | $ 4,487 | ||
Severance and benefits | |||||
Restructuring Reserve [Roll Forward] | |||||
Charges | 9,900 | ||||
Severance and benefits | 2022 Restructuring Plan | |||||
Restructuring Reserve [Roll Forward] | |||||
Beginning balance | 5,389 | ||||
Charges | 1,342 | ||||
Cash Payments | (2,244) | ||||
Non-Cash Payments | 0 | ||||
Change in Estimates | 0 | ||||
Ending balance | 4,487 | 4,487 | 4,487 | ||
Property and equipment accelerated depreciation due to restructuring | |||||
Restructuring Reserve [Roll Forward] | |||||
Charges | 300 | ||||
Property and equipment accelerated depreciation due to restructuring | 2022 Restructuring Plan | |||||
Restructuring Reserve [Roll Forward] | |||||
Beginning balance | 0 | ||||
Charges | 0 | ||||
Cash Payments | 0 | ||||
Non-Cash Payments | 0 | ||||
Change in Estimates | 0 | ||||
Ending balance | 0 | 0 | 0 | ||
Inventory write down | 2022 Restructuring Plan | |||||
Restructuring Reserve [Roll Forward] | |||||
Beginning balance | 0 | ||||
Charges | 857 | ||||
Cash Payments | 0 | ||||
Non-Cash Payments | (857) | ||||
Change in Estimates | |||||
Ending balance | 0 | 0 | 0 | ||
Other | |||||
Restructuring Reserve [Roll Forward] | |||||
Charges | 300 | ||||
Other | 2022 Restructuring Plan | |||||
Restructuring Reserve [Roll Forward] | |||||
Beginning balance | 0 | ||||
Charges | 1,282 | ||||
Cash Payments | (1,282) | ||||
Non-Cash Payments | 0 | ||||
Change in Estimates | 0 | ||||
Ending balance | $ 0 | $ 0 | $ 0 |
Derivative Financial Instrume_3
Derivative Financial Instruments - Cash Flow Hedges (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 29, 2024 | Jul. 01, 2023 | Jun. 29, 2024 | Jul. 01, 2023 | Dec. 31, 2023 | Nov. 30, 2021 | |
Derivatives, Fair Value [Line Items] | ||||||
Pre-tax deferred gains | $ 4,700 | |||||
Interest rate contract | Cash flow hedging | ||||||
Derivatives, Fair Value [Line Items] | ||||||
Notional amount | $ 150,000 | 150,000 | $ 150,000 | |||
Interest rate contract | Cash flow hedging | Other comprehensive income (loss) | ||||||
Derivatives, Fair Value [Line Items] | ||||||
Gains recognized in other comprehensive income, net of tax: | 211 | $ 3,116 | 2,412 | $ 986 | ||
Interest rate contract | Cash flow hedging | Other current assets | ||||||
Derivatives, Fair Value [Line Items] | ||||||
Fair value | 4,794 | 4,794 | 4,046 | |||
Interest rate contract | Cash flow hedging | Other assets | ||||||
Derivatives, Fair Value [Line Items] | ||||||
Fair value | 14,400 | 14,400 | $ 11,595 | |||
Interest rate swap | ||||||
Derivatives, Fair Value [Line Items] | ||||||
Notional amount | $ 150,000 | |||||
Interest rate swap | Cash flow hedging | ||||||
Derivatives, Fair Value [Line Items] | ||||||
Gains recognized in AOCI | $ 1,358 | $ 0 | $ 2,698 | $ 0 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Jun. 29, 2024 | Dec. 31, 2023 |
Inventory Disclosure [Abstract] | ||
Raw materials and supplies | $ 169,652 | $ 174,624 |
Work in process | 28,189 | 22,060 |
Finished goods | 3,990 | 2,517 |
Total | $ 201,831 | $ 199,201 |
Goodwill (Details)
Goodwill (Details) - USD ($) $ in Thousands | Jun. 29, 2024 | Dec. 31, 2023 |
Goodwill [Line Items] | ||
Gross goodwill | $ 326,322 | |
Accumulated goodwill impairment | (81,722) | |
Balance at December 31, 2023 | $ 244,600 | 244,600 |
Balance at June 29, 2024 | 244,600 | 244,600 |
Electronic Systems | ||
Goodwill [Line Items] | ||
Gross goodwill | 199,157 | |
Accumulated goodwill impairment | (81,722) | |
Balance at December 31, 2023 | 117,435 | 117,435 |
Balance at June 29, 2024 | 117,435 | 117,435 |
Structural Systems | ||
Goodwill [Line Items] | ||
Gross goodwill | 127,165 | |
Accumulated goodwill impairment | 0 | |
Balance at December 31, 2023 | 127,165 | 127,165 |
Balance at June 29, 2024 | $ 127,165 | $ 127,165 |
Accrued and Other Liabilities_2
Accrued and Other Liabilities (Details) - USD ($) $ in Thousands | Jun. 29, 2024 | Dec. 31, 2023 |
Payables and Accruals [Abstract] | ||
Accrued compensation | $ 31,318 | $ 35,574 |
Accrued income tax and sales tax | 1,100 | 177 |
Other | 7,875 | 6,509 |
Total | $ 40,293 | $ 42,260 |
Long-Term Debt - Schedule of Lo
Long-Term Debt - Schedule of Long Term Debt (Details) - USD ($) $ in Thousands | Jun. 29, 2024 | Dec. 31, 2023 |
Debt Instrument [Line Items] | ||
Long-term debt | $ 262,863 | $ 265,988 |
Less current portion | (10,938) | (7,813) |
Total long-term debt, less current portion | 251,925 | 258,175 |
Total long-term debt, net of debt issuance costs - term loans | $ 250,896 | $ 256,961 |
Weighted-average interest rate | 7.36% | 7.53% |
Term loans | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 239,063 | $ 242,188 |
Less debt issuance costs - term loans | (1,029) | (1,214) |
Debt issuance costs - revolving credit facility | 1,029 | 1,214 |
Revolving credit facility | ||
Debt Instrument [Line Items] | ||
Long-term debt | 23,800 | 23,800 |
Less debt issuance costs - term loans | (1,510) | (1,761) |
Debt issuance costs - revolving credit facility | $ 1,510 | $ 1,761 |
Long-Term Debt - Narrative (Det
Long-Term Debt - Narrative (Details) | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||||||
Jul. 14, 2022 USD ($) | May 31, 2023 USD ($) | Apr. 30, 2023 USD ($) | Jul. 31, 2022 USD ($) | Jun. 29, 2024 USD ($) | Jul. 01, 2023 USD ($) | Jun. 29, 2024 USD ($) subsidiary | Jul. 01, 2023 USD ($) | Dec. 31, 2023 USD ($) | Nov. 30, 2021 USD ($) | |
Debt Instrument [Line Items] | ||||||||||
Debt balance outstanding | $ 250,896,000 | $ 250,896,000 | $ 256,961,000 | |||||||
Proceeds from issuance of common stock in public offering, net of issuance costs | $ 0 | $ 85,107,000 | ||||||||
Interest rate swap | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Notional amount | $ 150,000,000 | |||||||||
Average fixed interest rate (as a percent) | 1.70% | 1.80% | ||||||||
BLR Aerospace, LLLC | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Payments for acquisition of BLR Aerospace L.L.C., net of cash acquired | $ 115,000,000 | |||||||||
Payments to acquire business | $ 117,000,000 | |||||||||
New Credit Facilities | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Number of subsidiaries that are not guarantors on debt | subsidiary | 2 | |||||||||
Secured Debt | 2022 Term Loan Maturing July 14, 2027 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt amount | $ 250,000,000 | |||||||||
Spread on base rate (as a percent) | 0% | |||||||||
Proceeds from term loan | $ 250,000,000 | |||||||||
Debt balance outstanding | $ 254,200,000 | |||||||||
Repayments of debt | 1,600,000 | $ 1,600,000 | $ 3,100,000 | $ 3,100,000 | ||||||
Noncash loss on extinguishment of debt | $ 200,000 | |||||||||
Fees paid to lenders to be capitalized | 800,000 | |||||||||
Secured Debt | 2022 Term Loan Maturing July 14, 2027 | Year one and two | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Prepayment amount of principal outstanding (as a percent) | 0.625% | |||||||||
Secured Debt | 2022 Term Loan Maturing July 14, 2027 | Year three and four | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Prepayment amount of principal outstanding (as a percent) | 1.25% | |||||||||
Secured Debt | 2022 Term Loan Maturing July 14, 2027 | Year five | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Prepayment amount of principal outstanding (as a percent) | 1.875% | |||||||||
Secured Debt | 2022 Term Loan Maturing July 14, 2027 | SOFR | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Spread on base rate (as a percent) | 1% | |||||||||
Secured Debt | 2022 Term Loan Maturing July 14, 2027 | Federal Funds Rate | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Spread on variable rate (as a percent) | 0.50% | |||||||||
Secured Debt | 2022 Term Loan Maturing July 14, 2027 | Minimum | SOFR | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Spread on variable rate (as a percent) | 1.375% | |||||||||
Secured Debt | 2022 Term Loan Maturing July 14, 2027 | Minimum | Base Rate | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Spread on variable rate (as a percent) | 0.375% | |||||||||
Secured Debt | 2022 Term Loan Maturing July 14, 2027 | Maximum | SOFR | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Spread on variable rate (as a percent) | 2.375% | |||||||||
Secured Debt | 2022 Term Loan Maturing July 14, 2027 | Maximum | Base Rate | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Spread on variable rate (as a percent) | 1.375% | |||||||||
Revolving Credit Facility | 2022 Term Loan Maturing July 14, 2027 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Outstanding standby letters of credit | 200,000 | 200,000 | ||||||||
Revolving Credit Facility | 2022 Revolving Credit Facility due July 14, 2027 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Line of credit facility, maximum borrowing capacity | $ 85,200,000 | $ 200,000,000 | ||||||||
Remaining borrowing capacity | $ 176,000,000 | $ 176,000,000 | ||||||||
Fees paid to lenders to be capitalized | 1,700,000 | |||||||||
Proceeds from issuance of common stock in public offering, net of issuance costs | $ 85,100,000 | |||||||||
Revolving Credit Facility | 2022 Revolving Credit Facility due July 14, 2027 | SOFR | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Spread on base rate (as a percent) | 1% | |||||||||
Revolving Credit Facility | 2022 Revolving Credit Facility due July 14, 2027 | Federal Funds Rate | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Spread on variable rate (as a percent) | 0.50% | |||||||||
Revolving Credit Facility | 2022 Revolving Credit Facility due July 14, 2027 | Minimum | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Commitment fee (as a precent) | 0.175% | |||||||||
Revolving Credit Facility | 2022 Revolving Credit Facility due July 14, 2027 | Minimum | SOFR | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Spread on variable rate (as a percent) | 1.375% | |||||||||
Revolving Credit Facility | 2022 Revolving Credit Facility due July 14, 2027 | Minimum | Base Rate | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Spread on variable rate (as a percent) | 0.375% | |||||||||
Revolving Credit Facility | 2022 Revolving Credit Facility due July 14, 2027 | Maximum | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Commitment fee (as a precent) | 0.275% | |||||||||
Revolving Credit Facility | 2022 Revolving Credit Facility due July 14, 2027 | Maximum | SOFR | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Spread on variable rate (as a percent) | 2.375% | |||||||||
Revolving Credit Facility | 2022 Revolving Credit Facility due July 14, 2027 | Maximum | Base Rate | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Spread on variable rate (as a percent) | 1.375% | |||||||||
Revolving Credit Facility | 2018 Term Loan | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Fees paid to lenders to be capitalized | 1,000,000 | |||||||||
Revolving Credit Facility | 2019 Revolving Credit Facility Due December 20, 2024 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Amortization of debt issuance costs | 100,000 | |||||||||
Debt issuance costs, line of credit arrangements | $ 800,000 |
Shareholders_ Equity (Details)
Shareholders’ Equity (Details) $ / shares in Units, shares in Millions, $ in Millions | 1 Months Ended |
May 31, 2023 USD ($) $ / shares shares | |
Equity [Abstract] | |
Number of shares issued in transaction (in shares) | shares | 2.3 |
Sale of stock price (in dollars per share) | $ / shares | $ 40 |
Consideration received on transaction | $ 92 |
Payments of stock issuance costs | 6.9 |
Net proceeds from sale of stock | 85.1 |
Increase in common stock, at par value | 0.1 |
Increase in additional paid in capital | 85.1 |
Repayments of lines of credit | $ 85.2 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 29, 2024 | Jul. 01, 2023 | Jun. 29, 2024 | Jul. 01, 2023 | Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |||||
Income tax expense (benefit) | $ 2,225 | $ 955 | $ 4,115 | $ 1,763 | |
Unrecognized tax benefits | 4,800 | 4,800 | $ 4,500 | ||
Expected change in unrecognized tax benefits | 3,000 | 3,000 | |||
Decrease in unrecognized tax benefits in next twelve months | $ 1,000 | $ 1,000 |
Commitments and Contingencies (
Commitments and Contingencies (Details) ft² in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | 36 Months Ended | ||||||
Jan. 31, 2023 USD ($) | Jun. 29, 2024 USD ($) | Jul. 01, 2023 USD ($) | Jul. 02, 2022 USD ($) | Jun. 29, 2024 USD ($) | Jul. 01, 2023 USD ($) | Dec. 31, 2023 USD ($) | Jul. 01, 2023 USD ($) | Jan. 22, 2023 ft² | Dec. 31, 2021 USD ($) | Jun. 30, 2020 ft² building | |
Loss Contingencies [Line Items] | |||||||||||
Estimated litigation liability | $ 900,000 | $ 800,000 | |||||||||
Payment for legal settlement | $ 300,000 | ||||||||||
Total net revenues | $ 197,000,000 | $ 187,320,000 | $ 387,847,000 | $ 368,511,000 | |||||||
Cost of sales | $ 145,761,000 | 147,198,000 | $ 289,665,000 | 291,622,000 | |||||||
Loss contingency, receivable, proceeds | 300,000 | ||||||||||
Gain contingencies related to loss on operating assets | 3,900,000 | ||||||||||
Loss contingency, property and equipment write off | 200,000 | ||||||||||
Loss contingency, deductions from proceeds | 100,000 | ||||||||||
Lease term | 10 years | 10 years | |||||||||
County of San Bernardino | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Payment for legal settlement | $ 900,000 | ||||||||||
Operating lease, lease not yet commenced | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Unrecorded unconditional purchase obligation, including lease not yet commenced | $ 5,800,000 | $ 5,800,000 | |||||||||
Accrued liabilities | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Estimated litigation liability | 900,000 | $ 800,000 | |||||||||
Additional accrued liabilities | 0 | $ 100,000 | |||||||||
Structural Systems | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Total net revenues | 95,560,000 | 80,196,000 | 178,868,000 | $ 155,761,000 | |||||||
El Mirage and Monrovia, California | Structural Systems | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Reserve for estimated liability | 1,500,000 | 1,500,000 | 1,500,000 | ||||||||
West Covina, California | Structural Systems | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Reserve for estimated liability | 400,000 | 400,000 | $ 400,000 | ||||||||
West Covina, California | Structural Systems | Minimum | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Possible loss | 400,000 | 400,000 | |||||||||
West Covina, California | Structural Systems | Maximum | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Possible loss | $ 3,100,000 | $ 3,100,000 | |||||||||
Facility fire in Guaymas, Mexico | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Real estate property (in sqft) | ft² | 117 | ||||||||||
Loss contingency, receivable, proceeds | $ 3,800,000 | ||||||||||
Aggregate loss proceeds | $ 23,700,000 | ||||||||||
Facility fire in Guaymas, Mexico | Damage from facility fire | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Number of buildings | building | 2 | ||||||||||
Real estate property (in sqft) | ft² | 62 | ||||||||||
Facility fire in Guaymas, Mexico | Business interruption | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Aggregate loss proceeds | 7,500,000 | ||||||||||
Facility fire in Guaymas, Mexico | Property, equipment, inventories and tooling | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Aggregate loss proceeds | $ 16,200,000 |
Business Segment Information -
Business Segment Information - Narrative (Details) | 6 Months Ended |
Jun. 29, 2024 segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 2 |
Number of operating segments | 2 |
Business Segment Information _2
Business Segment Information - Financial Information by Reportable Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 29, 2024 | Jul. 01, 2023 | Jun. 29, 2024 | Jul. 01, 2023 | |
Segment Reporting Information [Line Items] | ||||
Net Revenues | $ 197,000 | $ 187,320 | $ 387,847 | $ 368,511 |
Segment Operating Income | 13,924 | 5,005 | 26,546 | 11,377 |
Depreciation and Amortization Expenses | 8,245 | 7,954 | 16,598 | 15,943 |
Capital Expenditures | 3,219 | 6,034 | 7,964 | 11,015 |
Operating segments | ||||
Segment Reporting Information [Line Items] | ||||
Net Revenues | 197,000 | 187,320 | 387,847 | 368,511 |
Segment Operating Income | 27,365 | 14,913 | 49,202 | 29,669 |
Segment reconciling items | ||||
Segment Reporting Information [Line Items] | ||||
Corporate General and Administrative Expenses | (13,441) | (9,908) | (22,656) | (18,292) |
Corporate Administration | ||||
Segment Reporting Information [Line Items] | ||||
Depreciation and Amortization Expenses | 36 | 58 | 95 | 117 |
Capital Expenditures | 723 | 0 | 3,148 | 0 |
Electronic Systems | ||||
Segment Reporting Information [Line Items] | ||||
Net Revenues | 101,440 | 107,124 | 208,979 | 212,750 |
Electronic Systems | Operating segments | ||||
Segment Reporting Information [Line Items] | ||||
Net Revenues | 101,440 | 107,124 | 208,979 | 212,750 |
Segment Operating Income | 16,806 | 9,528 | 35,775 | 19,539 |
Depreciation and Amortization Expenses | 3,662 | 3,561 | 7,294 | 7,059 |
Capital Expenditures | 1,143 | 1,923 | 1,939 | 3,774 |
Structural Systems | ||||
Segment Reporting Information [Line Items] | ||||
Net Revenues | 95,560 | 80,196 | 178,868 | 155,761 |
Structural Systems | Operating segments | ||||
Segment Reporting Information [Line Items] | ||||
Net Revenues | 95,560 | 80,196 | 178,868 | 155,761 |
Segment Operating Income | 10,559 | 5,385 | 13,427 | 10,130 |
Depreciation and Amortization Expenses | 4,547 | 4,335 | 9,209 | 8,767 |
Capital Expenditures | $ 1,353 | $ 4,111 | $ 2,877 | $ 7,241 |
Business Segment Information _3
Business Segment Information - Segment Assets (Details) - USD ($) $ in Thousands | 1 Months Ended | ||
Apr. 30, 2023 | Jun. 29, 2024 | Dec. 31, 2023 | |
Segment Reporting Information [Line Items] | |||
Total Assets | $ 1,131,500 | $ 1,120,919 | |
Goodwill and Intangibles | 402,567 | 410,943 | |
BLR Aerospace, LLLC | |||
Segment Reporting Information [Line Items] | |||
Outstanding equity interests acquired (as a percent) | 100% | ||
Payments for acquisition of BLR Aerospace L.L.C., net of cash acquired | $ 115,000 | ||
Payments to acquire business | $ 117,000 | ||
Operating segments | Electronic Systems | |||
Segment Reporting Information [Line Items] | |||
Total Assets | 522,378 | 505,371 | |
Goodwill and Intangibles | 168,569 | 173,214 | |
Operating segments | Structural Systems | |||
Segment Reporting Information [Line Items] | |||
Total Assets | 553,049 | 552,641 | |
Goodwill and Intangibles | 233,998 | 237,729 | |
Corporate Administration | |||
Segment Reporting Information [Line Items] | |||
Total Assets | $ 56,073 | $ 62,907 |