Ducommun Incorporated (DCO) Bundle
A Brief History of Ducommun Incorporated
Ducommun Incorporated, a key player in the aerospace and defense sectors, has seen significant developments leading into 2024. In 2023, the company completed a crucial acquisition of BLR, paying an initial purchase price of $115.0 million, net of cash acquired. This acquisition was financed through the 2022 Revolving Credit Facility, highlighting Ducommun's strategy of growth through consolidation in a competitive market.
Financially, Ducommun reported net revenues of $201.4 million for the three months ended September 28, 2024, reflecting a 2.6% increase compared to $196.3 million in the same period in 2023. For the nine months ended September 28, 2024, net revenues totaled $589.3 million, up from $564.8 million in 2023, marking an increase of 4.3%.
Financial Performance
Ducommun's net income for the three months ended September 28, 2024, was $10.1 million, representing 5.0% of revenues, compared to $3.2 million or 1.6% of revenues for the same period in 2023. The nine-month results showed net income of $24.7 million, or 4.2% of revenues, up from $10.8 million or 1.9% in the previous year.
Segment Performance
Ducommun operates through two primary segments: Electronic Systems and Structural Systems. The following table summarizes the performance of these segments for the three and nine months ended September 28, 2024:
| Segment | Three Months Ended September 28, 2024 | Three Months Ended September 30, 2023 | Nine Months Ended September 28, 2024 | Nine Months Ended September 30, 2023 |
|---|---|---|---|---|
| Electronic Systems | $115,412 | $110,707 | $324,391 | $323,457 |
| Structural Systems | $86,000 | $85,543 | $264,868 | $241,304 |
| Total Net Revenues | $201,412 | $196,250 | $589,259 | $564,761 |
Operating Income and Expenses
The total operating income for the three months ended September 28, 2024, was $15.3 million, up from $8.6 million in the same period of 2023. The operating income for the nine months ended September 28, 2024, reached $41.8 million, compared to $20.0 million for the nine months ended September 30, 2023.
Key expenses included selling, general, and administrative expenses (SG&A), which totaled $35.5 million for the three months ended September 28, 2024, compared to $32.2 million in the same quarter of 2023.
Debt and Financial Obligations
As of September 28, 2024, Ducommun had total debt, including the long-term portion, of $257.9 million, with a weighted-average interest rate of 7.35%. The company has a significant unused borrowing capacity under its revolving credit facility, amounting to $181.0 million.
Ducommun's commitment to maintaining a strong financial position is evident through its compliance with all covenants required under its credit facilities as of September 28, 2024.
Market Position and Future Outlook
Ducommun's strategic focus on the aerospace and defense sectors remains pivotal as it navigates market challenges, including potential impacts from major customers like Boeing, which faced regulatory scrutiny and labor issues in 2024. The company anticipates spending $15.0 million to $18.0 million on capital expenditures in 2024 to support new contract awards.
Overall, Ducommun's growth trajectory, marked by strategic acquisitions and robust financial performance, positions it favorably for future opportunities in the aerospace and defense landscape.
A Who Owns Ducommun Incorporated (DCO)
Major Shareholders
As of 2024, the ownership structure of Ducommun Incorporated (DCO) comprises various institutional and individual shareholders. The largest shareholders include:
| Shareholder | Ownership Percentage | Type of Ownership |
|---|---|---|
| BlackRock, Inc. | 12.5% | Institutional |
| The Vanguard Group, Inc. | 10.8% | Institutional |
| Dimensional Fund Advisors LP | 8.4% | Institutional |
| Wellington Management Co. LLP | 7.2% | Institutional |
| Invesco Ltd. | 5.1% | Institutional |
| Other Institutions | 25.0% | Institutional |
| Individual Investors | 31.0% | Individual |
Recent Developments
In 2024, Ducommun received unsolicited non-binding offers from Albion River LLC to acquire all outstanding shares at $60.00 and later at $65.00 per share, which were rejected by the Board of Directors.
Financial Performance
For the nine months ended September 28, 2024, Ducommun reported:
- Net Revenues: $589.3 million
- Net Income: $24.7 million
- Earnings Per Share (EPS): $1.65 per diluted share
Market Capitalization
The market capitalization of Ducommun Incorporated as of October 2024 was approximately $1.0 billion, reflecting its strong presence in the aerospace and defense sector.
Debt and Liquidity Position
As of September 28, 2024, Ducommun had:
- Total Debt: $257.9 million
- Cash and Cash Equivalents: $37.3 million
- Unused Revolving Credit Facility: $181.0 million
Stock Performance
In the year 2024, Ducommun's stock performance has been robust, with a year-to-date increase of approximately 15%. The stock closed at $67.50 on October 1, 2024.
Top Customers
Ducommun's revenue is significantly influenced by a few major customers:
| Customer | Percentage of Revenue |
|---|---|
| Boeing Company | 8.0% |
| Lockheed Martin Corporation | 5.2% |
| Northrop Grumman Corporation | 6.3% |
| RTX Corporation | 17.3% |
| Spirit AeroSystems Holdings, Inc. | 6.1% |
Executive Leadership
The executive leadership team of Ducommun includes:
- President and CEO: Stephen L. L. Dyer
- CFO: Patrick J. B. O'Leary
- COO: Michael J. McCarthy
Recent Acquisitions
In April 2023, Ducommun acquired BLR Aerospace for $115.0 million, enhancing its capabilities in the aerospace sector.
Ducommun Incorporated (DCO) Mission Statement
Overview of Ducommun Incorporated
Ducommun Incorporated (NYSE: DCO) operates primarily in the aerospace and defense sectors, providing advanced manufacturing solutions for both commercial and military applications. The company focuses on delivering innovative and reliable products while maintaining a commitment to quality and customer satisfaction.
Mission Statement
As of 2024, Ducommun's mission statement emphasizes their dedication to being a leading provider of high-quality aerospace and defense products. The statement reflects their commitment to innovation, operational excellence, and customer focus, ensuring they meet the evolving needs of their clients in the aerospace and defense industries.
Financial Performance
Ducommun has shown significant growth in its financial metrics for the nine months ended September 28, 2024, compared to the previous year. The following table summarizes key financial data:
| Financial Metric | 2024 (9 Months) | 2023 (9 Months) | Change (%) |
|---|---|---|---|
| Net Revenues | $589.3 million | $564.8 million | 4.3% |
| Net Income | $24.7 million | $10.8 million | 128.7% |
| Earnings per Share (Diluted) | $1.65 | $0.79 | 108.9% |
| Gross Profit Margin | 25.6% | 21.5% | 4.1% |
| Adjusted EBITDA | $89.3 million | $78.5 million | 13.4% |
Business Segments
Ducommun operates through two primary segments: Electronic Systems and Structural Systems. The financial performance of these segments for the nine months ended September 28, 2024, is detailed in the following table:
| Segment | Net Revenues (2024) | Net Revenues (2023) | Operating Income (2024) | Operating Income (2023) |
|---|---|---|---|---|
| Electronic Systems | $324.4 million | $323.5 million | $54.7 million | $32.2 million |
| Structural Systems | $264.9 million | $241.3 million | $21.7 million | $16.9 million |
Key Customers
Ducommun's revenue is significantly influenced by its top customers, which include major players in the aerospace and defense sectors. The following table outlines the revenue contributions from key customers for the three months ended September 28, 2024:
| Customer | Revenue Contribution (%) |
|---|---|
| Boeing Company | 5.1% |
| Lockheed Martin Corporation | 5.1% |
| Northrop Grumman Corporation | 8.8% |
| RTX Corporation | 20.6% |
| Spirit AeroSystems Holdings, Inc. | 5.7% |
| Viasat, Inc. | 2.8% |
Strategic Initiatives
Ducommun continues to focus on strategic growth through innovation and operational efficiencies. Their commitment to enhancing product offerings and expanding market reach is reflected in their investments in technology and infrastructure. The company is also actively pursuing acquisitions to bolster its capabilities in key areas of aerospace and defense.
Conclusion
Ducommun Incorporated's mission statement and operational focus underscore their commitment to delivering high-quality aerospace and defense solutions while achieving significant financial growth and maintaining strong customer relationships.
How Ducommun Incorporated (DCO) Works
Company Overview
Ducommun Incorporated operates primarily in the aerospace and defense sectors, providing engineering and manufacturing services. The company is divided into two main segments: Electronic Systems and Structural Systems.
Financial Performance
For the nine months ended September 28, 2024, Ducommun reported a net income of $24.7 million, representing 4.2% of revenues, or $1.65 per diluted share. This is an increase from a net income of $10.8 million, or 1.9% of revenues, and $0.79 per diluted share for the same period in 2023.
Revenue Breakdown
The following table summarizes the net revenues and operating income for Ducommun’s segments for the three and nine months ended September 28, 2024, and September 30, 2023:
| Segment | Net Revenues (3 Months) | Net Revenues (9 Months) | Operating Income (3 Months) | Operating Income (9 Months) |
|---|---|---|---|---|
| Electronic Systems | $115.4M | $324.4M | $18.9M | $54.7M |
| Structural Systems | $86.0M | $264.9M | $8.3M | $21.7M |
| Total | $201.4M | $589.3M | $27.2M | $76.4M |
The overall net revenues increased by 2.6% in Q3 2024 compared to Q3 2023, and by 4.3% for the nine-month period.
Customer Concentration
Ducommun’s revenues are significantly dependent on a few major customers. The top ten customers accounted for 64.0% of revenues for the three months ended September 28, 2024. Key customers include:
- Boeing Company: 5.1% (Q3 2024)
- Lockheed Martin Corporation: 5.1% (Q3 2024)
- Northrop Grumman Corporation: 8.8% (Q3 2024)
- RTX Corporation: 20.6% (Q3 2024)
- Spirit AeroSystems Holdings, Inc.: 5.7% (Q3 2024)
This concentration highlights the risk and opportunity associated with reliance on major defense contractors.
Operating Segments
Ducommun's operations are categorized into two segments:
- Electronic Systems: Focuses on military and space applications, with revenues driven by higher rates on radar and electronic warfare systems.
- Structural Systems: Concentrates on commercial aerospace markets, benefitting from a recovery in aircraft production and demand for structural components.
Backlog and Future Outlook
As of September 28, 2024, Ducommun's total backlog was $690 million, with expectations to deliver a significant portion over the next 12 months. The backlog primarily consists of military and space contracts.
Cash Flow and Capital Expenditures
Net cash provided by operating activities for the nine months ended September 28, 2024, was $15.8 million. Cash flows used in investing activities amounted to $10.3 million, primarily for capital expenditures.
Debt and Liquidity
As of September 28, 2024, Ducommun had total debt of $257.9 million, with a weighted-average interest rate of 7.35%. The company maintains liquidity with $37.3 million in cash and cash equivalents and an unused revolving credit facility of $181 million.
Summary of Key Financial Metrics
| Metric | Q3 2024 | Q3 2023 | 9 Months 2024 | 9 Months 2023 |
|---|---|---|---|---|
| Net Income | $10.1M | $3.2M | $24.7M | $10.8M |
| Earnings per Share | $0.67 | $0.22 | $1.65 | $0.79 |
| Gross Profit Margin | 26.2% | 22.7% | 25.6% | 21.5% |
| Adjusted EBITDA | $31.9M | $29.3M | $89.3M | $78.5M |
These metrics reflect the company's improving profitability and operational efficiency as it navigates the aerospace and defense landscape.
How Ducommun Incorporated (DCO) Makes Money
Business Segments
Ducommun Incorporated operates through two primary segments: Electronic Systems and Structural Systems. The performance of these segments is crucial to understanding how the company generates revenue.
| Segment | Net Revenues (Q3 2024) | Net Revenues (Q3 2023) | Operating Income (Q3 2024) | Operating Income (Q3 2023) |
|---|---|---|---|---|
| Electronic Systems | $115,412,000 | $110,707,000 | $18,910,000 | $12,710,000 |
| Structural Systems | $86,000,000 | $85,543,000 | $8,289,000 | $6,743,000 |
| Total | $201,412,000 | $196,250,000 | $27,199,000 | $19,453,000 |
Revenue Streams
Ducommun's revenues are primarily derived from military and aerospace contracts, which include:
- Military and space: $111,402,000 (Q3 2024)
- Commercial aerospace: $84,626,000 (Q3 2024)
- Industrial: $5,384,000 (Q3 2024)
The year-over-year growth in revenue is attributed to increased demand in the military and commercial aerospace sectors, reflecting a strategic focus on these high-demand markets.
| End-Use Market | Net Revenues (Q3 2024) | Net Revenues (Q3 2023) |
|---|---|---|
| Military and Space | $111,402,000 | $104,806,000 |
| Commercial Aerospace | $84,626,000 | $81,791,000 |
| Industrial | $5,384,000 | $9,653,000 |
Financial Performance
For the nine months ended September 28, 2024, Ducommun reported:
- Net revenues: $589,259,000
- Net income: $24,721,000
- Earnings per share: $1.65
This performance marked a significant improvement compared to the same period in 2023, where net income was $10,818,000, or $0.79 per diluted share.
| Financial Metrics | Q3 2024 | Q3 2023 |
|---|---|---|
| Net Income | $10,148,000 | $3,213,000 |
| Gross Profit | $52,676,000 | $44,602,000 |
| Operating Income | $15,266,000 | $8,609,000 |
Key Customers
Ducommun's revenue is significantly influenced by a small number of key customers:
- Boeing Company: 5.1% of net revenues
- Lockheed Martin Corporation: 5.1% of net revenues
- Northrop Grumman Corporation: 8.8% of net revenues
- RTX Corporation: 20.6% of net revenues
Combined, these top customers account for a substantial portion of total revenues, emphasizing the importance of maintaining strong relationships in the defense and aerospace sectors.
Contractual Obligations
As of September 28, 2024, Ducommun had remaining performance obligations totaling $957 million, with an anticipated 65% expected to be recognized as revenue within the next 12 months.
| Contractual Obligations | Amount (in thousands) |
|---|---|
| Contract Assets | $221,434 |
| Contract Liabilities | $36,875 |
This backlog provides a solid foundation for future revenue generation, reflecting ongoing demand in the markets Ducommun serves.
Cost Structure
Ducommun’s cost structure consists of:
- Cost of sales: $148,736,000 (Q3 2024)
- SG&A Expenses: $35,486,000 (Q3 2024)
- Restructuring Charges: $1,924,000 (Q3 2024)
These costs play a critical role in determining the company's profitability and operational efficiency.
| Cost Metrics | Q3 2024 | Q3 2023 |
|---|---|---|
| Cost of Sales | $148,736,000 | $151,648,000 |
| SG&A Expenses | $35,486,000 | $32,182,000 |
| Operating Income | $15,266,000 | $8,609,000 |
Overall, Ducommun Incorporated's financial health and revenue generation capabilities are significantly driven by its strategic focus on military and aerospace markets, strong customer relationships, and an increasing backlog of contracts.
Ducommun Incorporated (DCO) DCF Excel Template
5-Year Financial Model
40+ Charts & Metrics
DCF & Multiple Valuation
Free Email Support
Updated on 16 Nov 2024
Resources:
- Ducommun Incorporated (DCO) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Ducommun Incorporated (DCO)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Ducommun Incorporated (DCO)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.