Gross Margins Rebound; Debt Reduced and Backlog Strong
First Quarter 2016 Highlights
-
First quarter revenue was
$142.1 million -
Net income was
$13.6 million , or$1.21 per diluted share -
Adjusted EBITDA for the quarter was
$11.1 million -
Backlog increased to
$564 million
“Our 2016 first quarter results validate that
“In addition, we successfully completed the divestitures of our
First Quarter Results
Net revenue for the first quarter of 2016 was approximately
-
Approximately
$15.4 million lower revenue in the industrial end-use markets due to the divestiture of thePittsburgh operation inJanuary 2016 and the closure of theHouston operation inDecember 2015 ; and -
Approximately
$13.2 million lower revenue in the military and space end-use markets mainly due to the decrease in U.S. government defense spending and shifting spending priorities, which impacted the Company’s fixed-wing and helicopter platforms and pushed out scheduled deliveries of these products to customers.
Going forward, as a result of the closure of the
Net income for the first quarter of 2016 was approximately
Operating income for the first quarter of 2016 was approximately
Interest expense decreased to approximately
The Company recorded a pretax gain on divestitures of approximately
Adjusted EBITDA for the first quarter of 2016 was approximately
During the first quarter of 2016, the Company generated approximately
The Company’s firm backlog as of
Structural Systems
The Structural Systems segment net revenue for the current-year first
quarter was approximately
-
An approximately
$4.5 million decrease in military and space revenues mainly due to the decrease in U.S. government defense spending and shifting spending priorities which impacted scheduled deliveries on the Company’s fixed-wing and helicopter platforms; and -
An approximately
$3.5 million decrease in commercial aerospace revenue related to the wind down of a regional jet program.
Structural Systems segment operating income for the current-year first
quarter was
Structural Systems segment Adjusted EBITDA was approximately
The
-
An approximately
$15.4 million decrease as a result of the divestiture of thePittsburgh operation inJanuary 2016 and the closure of theHouston operation inDecember 2015 ; and -
An approximately
$8.7 million decrease in military and space revenue mainly due to the decrease in U.S. government defense spending and shifting spending priorities which impacted scheduled deliveries on the Company’s fixed-wing and helicopter platforms; -
Partially offset by an approximately
$3.9 million increase in the Company’s commercial aerospace revenue through added content with existing customers.
Electronic Systems’ operating income for the current-year first quarter
was approximately
Corporate General and Administrative Expenses (“CG&A”)
CG&A expenses for the first quarter of 2016 were approximately
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About
Forward Looking Statements
Statements contained in this press release regarding other than
recitation of historical facts are forward-looking statements. These
statements are identified by words such as “may,” “will,” “ begin,” “
look forward,” “expect,” “believe,” “intend,” “anticipate,” “should,”
“potential,” “estimate,” “continue,” “momentum” and other words
referring to events to occur in the future. These statements reflect the
Company’s current view of future events and are based on its assessment
of, and are subject to, a variety of risks and uncertainties beyond its
control, including, but not limited to, the state of the world
financial, credit, commodities and stock markets, and uncertainties
regarding the Company, its businesses and the industries in which it
operates, which are described in the Company’s filings with the
Note Regarding Non-GAAP Financial Information
This release contains non-GAAP financial measures, including Adjusted EBITDA (which excludes interest expense, income tax expense (benefit), depreciation, amortization, stock-based compensation expense, and gain on divestitures).
The Company believes the presentation of these non-GAAP measures provide important supplemental information to management and investors regarding financial and business trends relating to its financial condition and results of operations. The Company’s management uses these non-GAAP financial measures along with the most directly comparable GAAP financial measures in evaluating the Company’s actual and forecasted operating performance, capital resources and cash flow. The non-GAAP financial information presented herein should be considered supplemental to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP.
DUCOMMUN INCORPORATED AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (In thousands) |
||||||||
April 2, 2016 |
December 31, 2015 |
|||||||
Assets | ||||||||
Current Assets | ||||||||
Cash and cash equivalents | $ | 6,439 | $ | 5,454 | ||||
Accounts receivable, net | 77,664 | 77,089 | ||||||
Inventories | 127,080 | 115,404 | ||||||
Production cost of contracts | 9,667 | 10,290 | ||||||
Other current assets | 8,441 | 13,389 | ||||||
Assets held for sale | — | 41,636 | ||||||
Total Current Assets | 229,291 | 263,262 | ||||||
Property and Equipment, Net | 95,602 | 96,551 | ||||||
Goodwill | 82,554 | 82,554 | ||||||
Intangibles, Net | 108,359 | 110,621 | ||||||
Deferred income taxes | 353 | 324 | ||||||
Other Assets | 3,215 | 3,769 | ||||||
Total Assets | $ | 519,374 | $ | 557,081 | ||||
Liabilities and Shareholders’ Equity | ||||||||
Current Liabilities | ||||||||
Current portion of long-term debt | $ | 19 | $ | 26 | ||||
Accounts payable | 47,418 | 40,343 | ||||||
Accrued liabilities | 42,496 | 36,458 | ||||||
Liabilities held for sale | — | 6,780 | ||||||
Total Current Liabilities | 89,933 | 83,607 | ||||||
Long-Term Debt, Less Current Portion | 186,032 | 240,661 | ||||||
Deferred Income Taxes | 25,052 | 26,528 | ||||||
Other Long-Term Liabilities | 17,692 | 18,954 | ||||||
Total Liabilities | 318,709 | 369,750 | ||||||
Commitments and Contingencies | ||||||||
Shareholders’ Equity | ||||||||
Common stock | 111 | 111 | ||||||
Additional paid-in capital | 75,269 | 75,200 | ||||||
Retained earnings | 131,173 | 117,623 | ||||||
Accumulated other comprehensive loss | (5,888 | ) | (5,603 | ) | ||||
Total Shareholders’ Equity | 200,665 | 187,331 | ||||||
Total Liabilities and Shareholders’ Equity | $ | 519,374 | $ | 557,081 | ||||
DUCOMMUN INCORPORATED AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (In thousands, except per share amounts) |
||||||||
Three Months Ended | ||||||||
April 2, 2016 |
April 4, 2015 |
|||||||
Net Revenues | $ | 142,148 | $ | 172,920 | ||||
Cost of Sales | 115,179 | 146,159 | ||||||
Gross Profit | 26,969 | 26,761 | ||||||
Selling, General and Administrative Expenses | 22,676 | 23,134 | ||||||
Operating Income | 4,293 | 3,627 | ||||||
Interest Expense | (2,399 | ) | (6,661 | ) | ||||
Gain on Divestitures | 18,815 | — | ||||||
Income (Loss) Before Taxes | 20,709 | (3,034 | ) | |||||
Income Tax Expense (Benefit) | 7,159 | (1,061 | ) | |||||
Net Income (Loss) | $ | 13,550 | $ | (1,973 | ) | |||
Earnings (Loss) Per Share | ||||||||
Basic earnings (loss) per share | $ | 1.22 | $ | (0.18 | ) | |||
Diluted earnings (loss) per share | $ | 1.21 | $ | (0.18 | ) | |||
Weighted-Average Number of Common Shares Outstanding | ||||||||
Basic | 11,100 | 10,964 | ||||||
Diluted | 11,240 | 10,964 | ||||||
Gross Profit % | 19.0 | % | 15.5 | % | ||||
SG&A % | 16.0 | % | 13.4 | % | ||||
Operating Income % | 3.0 | % | 2.1 | % | ||||
Net Income (Loss) % | 9.5 | % | (1.1 | )% | ||||
Effective Tax (Benefit) Rate | 34.6 | % | (35.0 | )% | ||||
DUCOMMUN INCORPORATED AND SUBSIDIARIES BUSINESS SEGMENT PERFORMANCE (Unaudited) (In thousands) |
|||||||||||||||||
Three Months Ended | |||||||||||||||||
%
Change |
April 2, 2016 |
April 4, 2015 |
%
of Net Revenues 2016 |
%
of Net Revenues 2015 |
|||||||||||||
Net Revenues | |||||||||||||||||
Structural Systems | (11.2 | )% | $ | 64,017 | $ | 72,058 | 45.0 | % | 41.7 | % | |||||||
Electronic Systems | (22.5 | )% | 78,131 | 100,862 | 55.0 | % | 58.3 | % | |||||||||
Total Net Revenues | (17.8 | )% | $ | 142,148 | $ | 172,920 | 100.0 | % | 100.0 | % | |||||||
Segment Operating Income | |||||||||||||||||
Structural Systems | $ | 2,724 | $ | 2,138 | 4.3 | % | 3.0 | % | |||||||||
Electronic Systems | 7,053 | 6,285 | 9.0 | % | 6.2 | % | |||||||||||
9,777 | 8,423 | ||||||||||||||||
Corporate General and Administrative Expenses (1) | (5,484 | ) | (4,796 | ) | (3.9 | )% | (2.8 | )% | |||||||||
Total Operating Income | $ | 4,293 | $ | 3,627 | 3.0 | % | 2.1 | % | |||||||||
Adjusted EBITDA | |||||||||||||||||
Structural Systems | |||||||||||||||||
Operating Income | $ | 2,724 | $ | 2,138 | |||||||||||||
Depreciation and Amortization | 2,057 | 2,513 | |||||||||||||||
4,781 | 4,651 | 7.5 | % | 6.5 | % | ||||||||||||
Electronic Systems | |||||||||||||||||
Operating Income | 7,053 | 6,285 | |||||||||||||||
Gain on Divestitures (2) | 18,815 | — | |||||||||||||||
Depreciation and Amortization | 3,761 | 4,359 | |||||||||||||||
29,629 | 10,644 | 37.9 | % | 10.6 | % | ||||||||||||
Corporate General and Administrative Expenses (1) | |||||||||||||||||
Operating loss | (5,484 | ) | (4,796 | ) | |||||||||||||
Gain on Divestitures (2) | (18,815 | ) | — | ||||||||||||||
Depreciation and Amortization | 37 | 42 | |||||||||||||||
Stock-Based Compensation Expense | 1,000 | 1,624 | |||||||||||||||
(23,262 | ) | (3,130 | ) | ||||||||||||||
Adjusted EBITDA | $ | 11,148 | $ | 12,165 | 7.8 | % | 7.0 | % | |||||||||
Capital Expenditures | |||||||||||||||||
Structural Systems | $ | 2,054 | $ | 3,334 | |||||||||||||
Electronic Systems | 347 | 1,490 | |||||||||||||||
Corporate Administration | — | 4 | |||||||||||||||
Total Capital Expenditures | $ | 2,401 | $ | 4,828 |
(1) Includes costs not allocated to either the
(2) Includes gain on
divestitures of the
View source version on businesswire.com: http://www.businesswire.com/news/home/20160509006380/en/
Source:
Ducommun Incorporated
Douglas L. Groves, Vice President, Chief
Financial Officer and Treasurer
310.513.7224
or
Chris
Witty, Investor Relations
646.438.9385
cwitty@darrowir.com