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) October 31, 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 October 31, 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: October 31, 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 THIRD QUARTER ENDED OCTOBER 1, 2005
LOS ANGELES, California (October 31, 2005) – Ducommun Incorporated (NYSE: DCO) today reported results for its third quarter and nine month period ended October 1, 2005.
Sales for the third quarter of 2005 were $63.0 million, compared to $51.8 million for the third quarter of 2004. Net income for the third quarter of 2005 was $4.3 million, or $0.42 per diluted share, compared to net income of $2.8 million, or $0.27 per diluted share, for the comparable period last year.
Sales for the third quarter of 2005 increased 22% from the same period last year, due to increases in both military and commercial sales. The Company’s mix of business in the third quarter of 2005 was approximately 54% military, 42% commercial and 4% space, compared to 56% military, 40% commercial and 4% space in the third quarter of 2004.
Gross profit, as a percentage of sales, increased to 20.7% in the third quarter of 2005 from 17.8% in the third quarter of 2004. The gross profit margin increase was primarily the result of spreading fixed overhead costs over a higher volume of sales during the third quarter of 2005.
Selling, general and administrative expenses, as a percentage of sales, increased to 12.0% in the third quarter of 2005 from 11.7% in the third quarter of 2004, primarily because of bonus accruals in 2005 versus a reversal of bonus accruals in 2004.
Net income for the third quarter of 2005 increased 57% and included an effective tax rate of 26.9% versus 13.0% for the third 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%.
Sales for the first nine months of 2005 were $188.8 million, compared to $167.5 million for the first nine months of 2004. Net income for the first nine months of 2005 was $12.5 million, or
$1.22 per diluted share, compared to $9.3 million, or $0.91 per diluted share, for the comparable period last year.
Sales for the first nine months of 2005 increased 13% from the same period last year, due to increases in both military and commercial sales. The Company’s mix of business in the first nine months of 2005 was approximately 59% military, 37% commercial and 4% space, compared to 60% military, 36% commercial and 4% space in the first nine months of 2004.
Gross profit, as a percentage of sales, increased to 20.5% in the first nine months of 2005 from 20.2% in the first nine months of 2004.
Selling, general and administrative (SG&A) expenses, as a percentage of sales, decreased to 11.8% in the first nine months of 2005 from 12.4% in the first nine months of 2004. The reduction in SG&A expenses, as a percent of sales, was primarily the result of higher sales volume in the first nine months of 2005, partially offset by higher SG&A spending for bonus accruals in 2005, compared to the comparable period of 2004.
Net income for the first nine months of 2005 increased 34% and included an effective tax rate of 26.2% versus 27.0% for the first nine months of 2004.
Joseph C. Berenato, chairman and chief executive officer, commented, “Our sales growth is being driven by increased production rates for the Apache helicopter main and tail rotor blades, and a general increase in commercial sales generated by the start of production on several new programs. We continue to focus on improving our operational processes in order to lower cost and improve quality.”
Mr. Berenato continued, “We are actively pursuing larger and more value added program opportunities to drive our internal growth. In addition, we are continuing to look for complementary acquisitions to enhance our existing businesses, and strategic acquisitions in market segments which will enhance both our design engineering capability and our opportunity to grow.”
Founded in 1849, Ducommun Incorporated manufactures components and assemblies for the aerospace industry.
- more -
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 800-510-0219 (international 617-614-3451) approximately ten minutes prior to the conference time stated above. The participant passcode is 99235294. Mr. Berenato will be speaking on behalf of the company and anticipates the meeting and Q&A period to last approximately 40 minutes.
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 October 1, 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 Nine Months Ended |
|||||||||||||||
| Oct. 1, 2005 |
Oct. 2, 2004 |
Oct. 1, 2005 |
Oct. 2, 2004 |
|||||||||||||
| Net Sales |
$ | 63,008,000 | $ | 51,835,000 | $ | 188,818,000 | $ | 167,465,000 | ||||||||
| Operating Costs and Expenses: |
||||||||||||||||
| Cost of Goods Sold |
49,958,000 | 42,599,000 | 150,041,000 | 133,674,000 | ||||||||||||
| Selling, General & Admin. Exp. |
7,555,000 | 6,046,000 | 22,195,000 | 20,829,000 | ||||||||||||
| Total |
57,513,000 | 48,645,000 | 172,236,000 | 154,503,000 | ||||||||||||
| Operating Income |
5,495,000 | 3,190,000 | 16,582,000 | 12,962,000 | ||||||||||||
| Interest Expense |
407,000 | (27,000 | ) | 322,000 | (241,000 | ) | ||||||||||
| Income Tax Expense |
(1,587,000 | ) | (411,000 | ) | (4,433,000 | ) | (3,431,000 | ) | ||||||||
| Net Income |
$ | 4,315,000 | $ | 2,752,000 | $ | 12,471,000 | $ | 9,290,000 | ||||||||
| Earnings Per Share: |
||||||||||||||||
| Basic Earnings Per Share |
$ | 0.43 | $ | 0.28 | $ | 1.24 | $ | 0.93 | ||||||||
| Diluted Earnings Per Share |
0.42 | 0.27 | 1.22 | 0.91 | ||||||||||||
| Weighted Averaged Number of Common Shares Outstanding: |
||||||||||||||||
| Basic |
10,069,000 | 9,990,000 | 10,058,000 | 9,959,000 | ||||||||||||
| Diluted |
10,222,000 | 10,173,000 | 10,190,000 | 10,164,000 | ||||||||||||
###