UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) August 1, 2005
DUCOMMUN INCORPORATED
(Exact name of registrant as specified in its charter)
| Delaware | 0-1222 | 95-0693330 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) | (IRS Employer Identification No.) |
| 23301 Wilmington Avenue, Carson, California | 90745-6209 | |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code (310) 513-7280
N/A
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 Results of Operations and Financial Condition.
Ducommun Incorporated issued a press release on August 1, 2005 in the form attached hereto as Exhibit 99.1.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| DUCOMMUN INCORPORATED | ||||
| (Registrant) | ||||
| Date: August 1, 2005 |
By: |
/s/ Samuel D. Williams | ||
| Samuel D. Williams | ||||
| Vice President and Controller | ||||
EXHIBIT 99.1
| CONTACT: | Joseph C. Berenato | |
| Chairman and Chief Executive Officer | ||
| (310) 513-7209 |
FOR IMMEDIATE RELEASE
DUCOMMUN INCORPORATED REPORTS RESULTS
FOR THE SECOND QUARTER ENDED JULY 2, 2005
LOS ANGELES, California (August 1, 2005) – Ducommun Incorporated (NYSE: DCO) today reported results for its second quarter ended July 2, 2005.
Sales for the second quarter of 2005 were $62.0 million, compared to $57.4 million for the second quarter of 2004. Net income for the second quarter of 2005 was $4.1 million, or $0.40 per diluted share, compared to net income of $4.3 million, or $0.42 per diluted share, for the comparable period last year.
Sales for the second quarter of 2005 increased 8% from the same period last year, primarily due to an increase in military sales. The Company’s mix of business in the second quarter of 2005 was approximately 63% military, 33% commercial and 4% space, compared to 61% military, 35% commercial and 4% space in the second quarter of 2004.
Gross profit, as a percentage of sales, decreased to 22.8% in the second quarter of 2005 from 24.6% in the second quarter of 2004. The gross profit margin decrease was primarily the result of higher operating costs at both Ducommun AeroStructures and Ducommun Technologies and changes in sales mix compared to the second quarter of 2004.
Selling, general and administrative expenses, as a percentage of sales, decreased to 12.5% in the second quarter of 2005 from 13.9% in the second quarter of 2004, primarily because of higher sales volume in the second quarter of 2005.
Net income for the second quarter of 2005 decreased 5% and included an effective tax rate of 35.9% versus 29.1% for the second quarter of 2004. The Company currently expects its effective tax rate for the full year of 2005 to be in the range of 26-30%, with significant fluctuations from quarter-to-quarter during the year.
Sales for the first six months of 2005 were $125.8 million, compared to $115.6 million for the first six months of 2004. Net income for the first six months of 2005 was $8.2 million, or $0.80 per diluted share, compared to net income of $6.5 million, or $0.64 per diluted share, for the same period last year.
Sales for the first six months of 2005 increased 9% from the same period last year, due to increases in both military and commercial sales. The Company’s mix of business in the first six months of 2005 was approximately 62% military, 35% commercial and 3% space, compared to 61% military, 35% commercial and 4% space in the first six months of 2004.
Gross profit, as a percentage of sales, decreased to 20.4% in the first six months of 2005 from 21.2% in the first six months of 2004. The gross profit margin decrease was primarily the result of higher operating costs at both Ducommun AeroStructures and Ducommun Technologies and changes in sales mix compared to the first six months of 2004.
Selling, general and administrative expenses, as a percentage of sales, decreased to 11.6% in the first six months of 2005 from 12.8% in the first six months of 2004, primarily because of higher sales volume in the first six months of 2005.
Net income for the first six months of 2005 increased 25% and included an effective tax rate of 25.9% versus 31.6% for the first six months of 2004.
Joseph C. Berenato, chairman and chief executive officer, commented, “We are pleased with the financial results of the first half of 2005. While quarterly financial results may fluctuate, we are seeing improvements in our operating and financial performance as a result of our continuing implementation of Lean principles throughout the Company.”
Mr. Berenato continued, “With our strengthened marketing capability, we are actively pursuing more value added program opportunities. In addition, with a strong balance sheet and our commitment to profitable growth, we continue to look for complementary acquisitions which will enhance our design engineering capabilities and open new market segments to Ducommun.”
Founded in 1849, Ducommun Incorporated manufactures components and assemblies for the aerospace industry.
A teleconference with the Company’s Chairman and Chief Executive Officer, Joseph C. Berenato, will be held today at 7:30 AM PT (10:30 AM ET). To participate in the teleconference, please call 800-322-2803 (international 617-614-4925) approximately ten minutes prior to the conference time stated above. The participant passcode is 48402861. Mr. Berenato will be speaking on behalf of the company and anticipates the meeting and Q&A period to last approximately 40 minutes.
- more -
This call is being webcast by Thomson/CCBN and can be accessed at Ducommun’s web site at www.ducommun.com. Conference call replay will be available from the Company’s web site at www.ducommun.com.
The statements made in this press release include forward-looking statements that involve risks and uncertainties. The Company’s future financial results could differ materially from those anticipated due to the Company’s dependence on conditions in the airline industry, the level of new commercial aircraft orders, production rates for Boeing commercial aircraft, the C-17 and Apache helicopter rotor blade programs, the level of defense spending, competitive pricing pressures, manufacturing inefficiencies, start-up costs and possible overruns on new contracts, technology and product development risks and uncertainties, product performance, risks associated with acquisitions and dispositions of businesses by the Company, increasing consolidation of customers and suppliers in the aerospace industry, possible goodwill impairment, availability of raw materials and components from suppliers, and other factors beyond the Company’s control. See the Company’s Form 10-K for the year ended December 31, 2004 and Form 10-Q for the quarter ended July 2, 2005 for a more detailed discussion of these and other risk factors and contingencies.
[Financial Table Follows]
DUCOMMUN INCORPORATED AND SUBSIDIARIES
COMPARATIVE DATA
CONSOLIDATED INCOME STATEMENT
| For Three Months Ended |
For Six Months Ended |
|||||||||||||||
| July 2, 2005 |
July 3, 2004 |
July 2, 2005 |
July 3, 2004 |
|||||||||||||
| Net Sales |
$ | 61,998,000 | $ | 57,383,000 | $ | 125,810,000 | $ | 115,630,000 | ||||||||
| Operating Costs and Expenses: |
||||||||||||||||
| Cost of Goods Sold |
47,866,000 | 43,242,000 | 100,083,000 | 91,075,000 | ||||||||||||
| Selling, General & Administrative Expenses |
7,773,000 | 7,993,000 | 14,640,000 | 14,783,000 | ||||||||||||
| Total |
55,639,000 | 51,235,000 | 114,723,000 | 105,858,000 | ||||||||||||
| Operating Income |
6,359,000 | 6,148,000 | 11,087,000 | 9,772,000 | ||||||||||||
| Interest Expense |
(7,000 | ) | (76,000 | ) | (85,000 | ) | (214,000 | ) | ||||||||
| Income Tax Expense |
(2,279,000 | ) | (1,765,000 | ) | (2,846,000 | ) | (3,020,000 | ) | ||||||||
| Net Income |
$ | 4,073,000 | $ | 4,307,000 | $ | 8,156,000 | $ | 6,538,000 | ||||||||
| Earnings Per Share: |
||||||||||||||||
| Basic Earnings Per Share |
$ | 0.40 | $ | 0.43 | $ | 0.81 | $ | 0.66 | ||||||||
| Diluted Earnings Per Share |
0.40 | 0.42 | 0.80 | 0.64 | ||||||||||||
| Weighted Averaged Number of Common Shares Outstanding: |
||||||||||||||||
| Basic |
10,060,000 | 9,966,000 | 10,052,000 | 9,943,000 | ||||||||||||
| Diluted |
10,161,000 | 10,191,000 | 10,191,000 | 10,205,000 | ||||||||||||
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