Document and Entity Information - shares	6 Months Ended
Document and Entity Information - shares	Jul. 01, 2017	Jul. 25, 2017
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jul. 01, 2017
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q2
Trading Symbol	DCO
Entity Registrant Name	DUCOMMUN INC /DE/
Entity Central Index Key	0000030305
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		11,319,366

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Jul. 01, 2017	Dec. 31, 2016
Current Assets
Cash and cash equivalents	$ 7,372	$ 7,432
Accounts receivable, net of allowance for doubtful accounts of $536 and $495 at July 1, 2017 and December 31, 2016, respectively	81,965	76,239
Inventories	129,398	119,896
Production cost of contracts	12,673	11,340
Other current assets	10,438	11,034
Total Current Assets	241,846	225,941
Property and equipment, net of accumulated depreciation of $142,034 and $135,484 at July 1, 2017 and December 31, 2016, respectively	110,788	101,590
Goodwill	82,554	82,554
Intangibles, net	97,155	101,573
Non-current deferred income taxes	286	286
Other assets	3,143	3,485
Total Assets	535,772	515,429
Current Liabilities
Current portion of long-term debt	0	3
Accounts payable	71,659	57,024
Accrued liabilities	25,814	29,279
Total Current Liabilities	97,473	86,306
Long-term debt, less current portion	169,627	166,896
Non-current deferred income taxes	31,895	31,417
Other long-term liabilities	17,837	18,707
Total Liabilities	316,832	303,326
Commitments and contingencies (Notes 11, 13)
Shareholders’ Equity
Common stock - $0.01 par value; 35,000,000 shares authorized; 11,317,337 and 11,193,813 issued at July 1, 2017 and December 31, 2016, respectively	113	112
Additional paid-in capital	77,670	76,783
Retained earnings	147,225	141,287
Accumulated other comprehensive loss	(6,068)	(6,079)
Total Shareholders’ Equity	218,940	212,103
Total Liabilities and Shareholders’ Equity	$ 535,772	$ 515,429

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands	Jul. 01, 2017	Dec. 31, 2016
Statement of Financial Position [Abstract]
Accounts receivable, allowance for doubtful accounts	$ 536	$ 495
Property and equipment, accumulated depreciation	$ 142,034	$ 135,484
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)	11,317,337	11,193,813

Condensed Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 01, 2017	Jul. 02, 2016	Jul. 01, 2017	Jul. 02, 2016
Income Statement [Abstract]
Net Revenues	$ 140,938	$ 133,437	$ 277,235	$ 275,585
Cost of Sales	114,747	107,222	226,117	222,401
Gross Profit	26,191	26,215	51,118	53,184
Selling, General and Administrative Expenses	19,720	18,949	40,547	41,625
Operating Income	6,471	7,266	10,571	11,559
Interest Expense	(1,907)	(1,935)	(3,500)	(4,334)
Gain on Divestitures	0	0	0	18,815
Income Before Taxes	4,564	5,331	7,071	26,040
Income Tax Expense	741	1,470	1,133	8,629
Net Income	$ 3,823	$ 3,861	$ 5,938	$ 17,411
Earnings Per Share
Basic earnings per share (in dollars per share)	$ 0.34	$ 0.35	$ 0.53	$ 1.56
Diluted earnings per share (in dollars per share)	$ 0.33	$ 0.34	$ 0.51	$ 1.55
Weighted-Average Number of Common Shares Outstanding
Basic (in shares)	11,237	11,155	11,253	11,127
Diluted (in shares)	11,491	11,264	11,556	11,245

Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 01, 2017	Jul. 02, 2016	Jul. 01, 2017	Jul. 02, 2016
Statement of Comprehensive Income [Abstract]
Net Income	$ 3,823	$ 3,861	$ 5,938	$ 17,411
Other Comprehensive (Loss) Income
Amortization of actuarial losses and prior service costs, net of tax benefit of $88 and $73 for the three months ended July 1, 2017 and July 2, 2016, respectively, and $151 and $141 for the six months ended July 1, 2017 and July 2, 2016, respectively	114	117	254	240
Change in unrealized gains and losses on cash flow hedges, net of tax of $72 and $87 for the three months ended July 1, 2017 and July 2, 2016, respectively, and $144 and $326 for the six months ended July 1, 2017 and July 2, 2016, respectively	(122)	(148)	(243)	(556)
Other Comprehensive (Loss) Income	(8)	(31)	11	(316)
Comprehensive Income	$ 3,815	$ 3,830	$ 5,949	$ 17,095

Condensed Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 01, 2017	Jul. 02, 2016	Jul. 01, 2017	Jul. 02, 2016
Statement of Comprehensive Income [Abstract]
Amortization of actuarial losses and prior service costs, tax benefits	$ 88	$ 73	$ 151	$ 141
Change in unrealized gains and losses on cash flow hedges, tax benefit	$ 72	$ 87	$ 144	$ 326

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jul. 01, 2017	Jul. 02, 2016
Cash Flows from Operating Activities
Net Income	$ 5,938	$ 17,411
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities
Depreciation and amortization	11,530	11,331
Gain on divestitures	0	(18,815)
Stock-based compensation expense	3,164	1,985
Deferred income taxes	478	(3,144)
Provision for (recovery of) doubtful accounts	41	(24)
Other	(2,286)	(3,401)
Changes in Assets and Liabilities:
Accounts receivable	(5,767)	2,738
Inventories	(9,502)	(12,875)
Production cost of contracts	(1,777)	792
Other assets	938	7,690
Accounts payable	14,998	9,871
Accrued and other liabilities	(1,508)	(1,484)
Net Cash Provided by Operating Activities	16,247	12,075
Cash Flows from Investing Activities
Purchases of property and equipment	(16,242)	(7,619)
Proceeds from sale of assets	3	0
Proceeds from divestitures	0	55,272
Net Cash (Used in) Provided by Investing Activities	(16,239)	47,653
Cash Flows from Financing Activities
Borrowings from senior secured revolving credit facility	123,000	9,200
Repayments of senior secured revolving credit facility	(110,800)	(4,200)
Repayments of senior unsecured notes and term loans	(10,000)	(60,000)
Repayments of other debt	(3)	(14)
Net (cash paid) proceeds from issuance of common stock under stock plans	(2,265)	(992)
Net Cash Used in Financing Activities	(68)	(56,006)
Net (Decrease) Increase in Cash and Cash Equivalents	(60)	3,722
Cash and Cash Equivalents at Beginning of Period	7,432	5,454
Cash and Cash Equivalents at End of Period	$ 7,372	$ 9,176

Summary of Significant Accounting Policies

6 Months Ended

Jul. 01, 2017

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Description of Business

We are a leading global provider of engineering and manufacturing services 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 subsidiaries are organized into two strategic businesses: Electronic Systems segment and Structural Systems segment, each of which is a reportable operating segment. Electronic Systems designs, engineers and manufactures high-reliability products used in worldwide technology-driven markets including aerospace, defense, industrial and medical and other end-use markets. Electronic Systems’ product offerings range from prototype development to complex assemblies. Structural Systems designs, engineers and manufactures large, complex contoured aerospace structural components and assemblies and supplies composite and metal bonded structures and assemblies. Structural Systems’ products are 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, 2016 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, 2016. We followed the same accounting policies for interim reporting. The financial information included in this Quarterly Report on Form 10-Q should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2016.

In the opinion of management, all adjustments, consisting of recurring accruals, have been made that are necessary to fairly state our condensed consolidated financial position, statements of income, comprehensive income and cash flows in accordance with GAAP for the periods covered by this Quarterly Report on Form 10-Q. The results of operations for the three and six months ended July 1, 2017 are not necessarily indicative of the results to be expected for the full year ending December 31, 2017.

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 ends 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 requires management to make estimates and judgments that affect the amounts of assets, liabilities (including forward loss reserves), 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.

Supplemental Cash Flow Information



	(In thousands) Six Months Ended
	July 1, 2017		July 2, 2016
Interest paid	$	3,102	$	3,741
Taxes paid	$	685	$	2,479
Non-cash activities:
Purchases of property and equipment not paid	$	2,878	$	1,278

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 are computed by dividing income available to common shareholders by the weighted-average number of common shares outstanding, plus any potential dilutive shares that could be issued if exercised or converted into common stock in each period.

The net income, weighted-average number of common shares outstanding used to compute earnings per share, were as follows:



	(In thousands, except per share data) Three Months Ended				(In thousands, except per share data) Six Months Ended
	July 1, 2017		July 2, 2016		July 1, 2017		July 2, 2016
Net income	$	3,823	$	3,861	$	5,938	$	17,411
Weighted-average number of common shares outstanding
Basic weighted-average common shares outstanding	11,237		11,155		11,253		11,127
Dilutive potential common shares	254		109		303		118
Diluted weighted-average common shares outstanding	11,491		11,264		11,556		11,245
Earnings per share
Basic	$	0.34	$	0.35	$	0.53	$	1.56
Diluted	$	0.33	$	0.34	$	0.51	$	1.55

Potentially dilutive stock options and stock units to purchase common stock, as shown below, were excluded from the computation of diluted earnings per share because their inclusion would have been anti-dilutive. However, these shares may be potentially dilutive common shares in the future.

(In thousands)

Three Months Ended

(In thousands)

Six Months Ended

July 1,
2017

July 2,
2016

July 1,
2017

July 2,
2016

Stock options and stock units

154

674

156

632

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 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.

Divestitures

On January 22, 2016, we entered into an agreement, and completed the sale on the same date, to sell our operation located in Pittsburgh, Pennsylvania for a preliminary sales price of $38.5 million in cash. We divested this facility as part of our overall strategy to streamline operations, which included consolidating our footprint. However, the sale of the Pittsburgh operation did not represent a strategic shift in our business and thus, was included in the ongoing operating results in the condensed consolidated income statements for all periods presented. Preliminary net assets sold were $24.0 million, net liabilities sold were $4.0 million, and direct transaction costs incurred were $0.2 million, resulting in a preliminary gain on divestiture of $18.3 million. In the fourth quarter of 2016, we finalized the sale with a final sales price of $38.6 million in cash. The final net assets sold were $24.0 million, net liabilities sold were $4.0 million, and direct transaction costs incurred were $0.3 million, resulting in a gain on divestiture of $18.3 million.

In February 2016, we entered into an agreement to sell our Huntsville, Alabama and Iuka, Mississippi (collectively, “Miltec”) operations for a preliminary sales price of $14.6 million, in cash, subject to post-closing adjustments. We divested this facility as part of our overall strategy to streamline operations, which included consolidating our footprint. However, the sale of the Miltec operation did not represent a strategic shift in our business and thus, was included in the ongoing operating results in the condensed consolidated income statements for all periods presented. We completed the sale on March 25, 2016. Preliminary net assets sold were $15.4 million, net liabilities sold were $2.6 million, and direct transaction costs incurred during the current period were $1.3 million, resulting in a preliminary gain on divestiture of $0.5 million. In the fourth quarter of 2016, we finalized the sale with a final sales price of $13.3 million in cash. The final net assets sold were $15.4 million, net liabilities sold were $2.7 million, and direct transaction costs incurred were $1.3 million, resulting in a loss on divestiture of $0.7 million.

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, which 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, a hedge of a net investment in a foreign operation, or a derivative instrument that will not be accounted for using hedge accounting methods. As of July 1, 2017, 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 hedge. We record any hedge ineffectiveness and amounts excluded from effectiveness testing in current period earnings within interest expense. 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.

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, with units being relieved and charged to cost of sales on a first-in, first-out basis. Raw materials are based on cost and other inventory classifications are based on net realizable value. Inventoried costs include raw materials, outside processing, direct labor and allocated overhead, adjusted for any abnormal amounts of idle facility expense, freight, handling costs, and wasted materials (spoilage) incurred. Costs under long-term contracts are accumulated into, and removed from, inventory on the same basis as other contracts. 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. We maintain a reserve for potentially excess and obsolete inventories and inventories that are carried at costs that are higher than their estimated net realizable values.

Production Cost of Contracts

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 goods sold using the units of delivery method. 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.

Accumulated Other Comprehensive Loss

Accumulated other comprehensive loss, 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.

Provision for Estimated Losses on Contracts

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 improvements in manufacturing efficiency, reductions in 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 record additional provisions for estimated losses on contracts.

Recent Accounting Pronouncements

New Accounting Guidance Adopted in 2017

In December 2016, the FASB issued ASU 2016-19, “Technical Corrections and Improvements” (“2016-19”), which cover a variety of Topics in the Codification. The amendments in ASU 2016-19 represent changes to make corrections or improvements to the Codification that are not expected to have a significant effect on current accounting practice or create a significant administrative cost to most entities. The new guidance was effective for us beginning January 1, 2017. The adoption of this standard did not have a significant impact on our condensed consolidated financial statements.

In March 2016, the FASB issued ASU 2016-09, “Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting” (“ASU 2016-09”), which is intended to improve the accounting for employee share-based payments. The new guidance was effective for us beginning January 1, 2017. The adoption of this standard did not have a significant dollar impact on our condensed consolidated financial statements.

In March 2016, the FASB issued ASU 2016-05, “Derivatives and Hedging (Topic 815): Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships” (“ASU 2016-05”), which clarifies that a change in the counter party to a derivative instrument designated as a hedging instrument does not require dedesignation of that hedging relationship, provided that all other hedge accounting criteria are met. The new guidance was effective for us beginning January 1, 2017. The adoption of this standard did not have a significant impact on our condensed consolidated financial statements.

In July 2015, the FASB issued ASU 2015-11, “Inventory (Topic 330)” (“ASU 2015-11”), which requires inventory within the scope of ASU 2015-11 to be measured at the lower of cost or net realizable value. Subsequent measurement is unchanged for inventory measured using last-in, first-out (“LIFO”) or the retail inventory value. The new guidance was effective for us beginning January 1, 2017. The adoption of this standard did not have a significant impact on our condensed consolidated financial statements.

Recently Issued Accounting Standards

In May 2017, the FASB issued ASU 2017-09, “Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting” (“ASU 2017-09”), which provides clarity on determining which changes to the terms and conditions of share-based payment awards require an entity to apply modification accounting under Topic 718. The new guidance is effective for annual periods beginning after December 15, 2017, including interim periods within those annual periods, which will be our interim period beginning January 1, 2018. Early adoption is permitted, including adoption in any interim period. The amendments should be applied prospectively to an award modified on or after the adoption date. We are evaluating the impact of this standard.

In March 2017, the FASB issued ASU 2017-07, “Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Costs” (“ASU 2017-07”), which require an employer to report the service cost component in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost are required to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations, if one is presented. If a separate line item or items are used to present the other components of net benefit cost, that line item or items must be appropriately described. If a separate line item or items are not used, the line item or items used in the income statement to present the other components of net benefit cost must be disclosed. The amendments also allow only the service cost component to be eligible for capitalization when applicable. The new guidance is effective for annual periods beginning after December 15, 2017, including interim periods within those annual periods, which will be our interim period beginning January 1, 2018. We are evaluating the impact of this standard.

In January 2017, the FASB issued ASU 2017-04, “Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment” (“ASU 2017-04”), which simplifies the subsequent measurement of goodwill, the amendments eliminate Step Two from the goodwill impairment test. The annual, or interim, goodwill impairment test is performed by comparing the fair value of a reporting unit with its carrying amount. An impairment charge should be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. In addition, income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit should be considered when measuring the goodwill impairment loss, if applicable. The amendments also eliminate the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step Two of the goodwill impairment test. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. The new guidance is effective for annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. We are evaluating the impact of this standard.

In January 2017, the FASB issued ASU 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business” (“ASU 2017-01”), which clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of businesses. The new guidance is effective for annual periods beginning after December 15, 2017, including interim periods within those annual periods, which will be our interim period beginning January 1, 2018. We are evaluating the impact of this standard.

In December 2016, the FASB issued ASU 2016-20, “Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers” (“ASU 2016-20”), which cover a variety of Topics in the Codification related to the new revenue recognition standard (ASU 2014-09). The amendments in ASU 2016-20 represent changes to make minor corrections or minor improvements to the Codification that are not expected to have a significant effect on current accounting practice or create a significant administrative cost to most entities. The new guidance is effective for annual periods beginning after December 15, 2017, including interim periods within those annual periods, which will be our interim period beginning January 1, 2018. We are evaluating the impact of this standard.

In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments” (“ASU 2016-15”), which addresses the following eight specific cash flow issues: Debt prepayment or debt extinguishment costs; settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing; contingent consideration payments made after a business combination; proceeds from the settlement of insurance claims; proceeds from the settlement of corporate-owned life insurance policies (“COLIs”) (including bank-owned life insurance policies [“BOLIs”]); distributions received from equity method investees; beneficial interests in securitization transactions; and separately identifiable cash flows and application of the predominance principle. The new guidance is effective for annual periods beginning after December 15, 2017, including interim periods within those annual periods, which will be our interim period beginning January 1, 2018. We are evaluating the impact of this standard.

In May 2016, the FASB issued ASU 2016-12, “Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients” (“ASU 2016-12”), which amends the guidance in the new revenue standard on collectability, noncash consideration, presentation of sales tax, and transition. The amendments are intended to address implementation issues and provide additional practical expedients to reduce the cost and complexity of applying the new revenue standard. The new guidance is effective for annual periods beginning after December 15, 2017, including interim periods within those annual periods, which will be our interim period beginning January 1, 2018. Early adoption is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods with that reporting period. We are evaluating the impact of this standard.

In May 2016, the FASB issued ASU 2016-11, “Revenue Recognition (Topic 605) and Derivatives and Hedging (Topic 815): Rescission of SEC Guidance Because of Accounting Standards Updates 2014-09 and 2014-06 Pursuant to Staff Announcements at the March 3, 2016 EITF Meeting” (“ASU 2016-11”), which clarifies revenue and expense recognition for freight costs, accounting for shipping and handling fees and costs, and accounting for consideration given by a vendor to a customer. The new guidance is effective for annual periods beginning after December 15, 2017, including interim periods within those annual periods, which will be our interim period beginning January 1, 2018. Early adoption is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods with that reporting period. We are evaluating the impact of this standard.

In April 2016, the FASB issued ASU 2016-10, “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing” (“ASU 2016-10”), which clarifies the following two aspects of Topic 606: (a) identifying performance obligations; and (b) the licensing implementation guidance. The amendments do not change the core principle of the guidance in Topic 606. The new guidance is effective for annual periods beginning after December 15, 2017, including interim periods within those annual periods, which will be our interim period beginning January 1, 2018. Early adoption is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods with that reporting period. We are evaluating the impact of this standard.

In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)” (“ASU 2016-02”), which requires lessees to present right-of-use assets and lease liabilities on the balance sheet. Lessees are required to apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The new guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, which will be our interim period beginning January 1, 2019. We are evaluating the impact of this standard and currently anticipate it will impact our condensed consolidated financial statements.

In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”), which outlines a new, single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. This new revenue recognition model provides a five-step analysis in determining when and how revenue is recognized. It requires entities to exercise judgment when considering the terms of the contract(s) which include (i) identifying the contract(s) with the customer, (ii) identifying the separate performance obligations in the contract, (iii) determining the transaction price, (iv) allocating the transaction price to the separate performance obligations, and (v) recognizing revenue when each performance obligation is satisfied. Thus, it depicts the transfer of promised goods or services to customers in an amount that reflects the consideration an entity expects to receive in exchange for those goods or services. Companies have the option of applying the provisions of ASU 2014-09 either retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of initially applying this guidance recognized at the date of initial application. In August 2015, the FASB issued ASU 2015-14, “Revenue From Contracts With Customers (Topic 606)” (“ASU 2015-14”), which deferred the effective date of ASU 2014-09 by one year to annual periods beginning after December 15, 2017, including interim reporting periods within that reporting period. Early adoption is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. The new guidance is effective for us beginning January 1, 2018 and provides us additional time to evaluate the impact that ASU 2014-09 will have on our condensed consolidated financial statements. We are currently completing the assessment and gap identification phases of the implementation project. This includes reviewing current accounting policies and practices to identify potential differences that would result from applying the requirements under the new accounting standard. We are in the process of completing the contract evaluations and validating the results of applying the new revenue guidance. As the percentage of completion, unit of delivery method of recognizing revenue is being eliminated for companies with significant work-in-process inventory time under ASU 2014-09, we currently anticipate most of our revenues will be recognized over time instead of at a point in time, which is our current method for recognizing revenue. As such, our revenues, cost of sales, and related items on our condensed consolidated financial statements will be impacted as well as our financial information technology systems. Further, we have selected a software solution and are in the preliminary stage of implementing the software solution to comply with this new accounting standard. Finally, we expect to adopt the new accounting standard using the modified retrospective method, under which the cumulative effect of initially applying the new guidance is recognized as an adjustment to certain captions on the balance sheet, including the opening balance of retained earnings in the first quarter of 2018.

Restructuring Activities

6 Months Ended

Jul. 01, 2017

Restructuring and Related Activities [Abstract]

Restructuring Activities

Summary of 2015 Restructuring Plans

In September 2015, management approved and commenced implementation of several restructuring actions, including organizational re-alignment, consolidation and relocation of the New York facilities that was completed in December 2015, closure of the Houston facility that was completed in December 2015, and closure of the St. Louis facility that was completed in April 2016, all of which are part of our overall strategy to streamline operations. We have recorded cumulative expenses of $2.2 million for severance and benefits and loss on early exit from leases. We do not expect to record additional expenses related to these restructuring plans.

As of July 1, 2017, we have accrued $0.4 million for loss on early exit from a lease in the Structural Systems segment, which was charged to selling, general and administrative expenses.

Summary of 2016 Restructuring Plan

In May 2016, management approved and commenced implementation of the closure of one of our Tulsa facilities that was completed in June 2016, and was part of our overall strategy to streamline operations. We have recorded cumulative expenses of $0.2 million for severance and benefits and loss on early exit from a lease. We do not expect to record additional expenses related to this restructuring plan.

As of July 1, 2017, we have accrued $0.1 million for loss on early exit from a lease in the Electronic Systems segment, which was charged to selling, general and administrative expenses.

Our restructuring activities in the six months ended July 1, 2017 were as follows (in thousands):



	December 31, 2016		Six Months Ended July 1, 2017							July 1, 2017
	Balance		Charges		Cash Payments			Change in Estimates		Balance
Lease termination	$	654	$	—	$	(156	)	$	—	$	498
Ending balance	$	654	$	—	$	(156	)	$	—	$	498

Fair Value Measurements

6 Months Ended

Jul. 01, 2017

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair value is defined as the price that would be received for an asset or the price that would be paid to transfer a liability (an exit price) in the principal or most advantageous market in an orderly transaction between market participants on the measurement date. The accounting standard provides a framework for measuring fair value using a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. This hierarchy requires us to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Three levels of inputs that may be used to measure fair value are as follows:

Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level 2 - Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and

Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Our financial instruments consist primarily of cash and cash equivalents and interest rate cap derivatives designated as cash flow hedging instruments. Assets and liabilities measured at fair value on a recurring basis were as follows (in thousands):



	As of July 1, 2017								As of December 31, 2016
	Fair Value Measurements Using								Fair Value Measurements Using
	Level 1		Level 2		Level 3		Total Balance		Level 1		Level 2		Level 3		Total Balance
Assets
Money market funds⁽¹⁾	$	21	$	—	$	—	$	21	$	3,751	$	—	$	—	$	3,751
Interest rate cap hedges⁽²⁾	—		167		—		167		—		553		—		553
Total Assets	$	21	$	167	$	—	$	188	$	3,751	$	553	$	—	$	4,304

(1) Included as cash and cash equivalents.

(2) Interest rate cap hedge premium included as other current assets and other assets.

The fair value of the interest rate cap hedge 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 July 1, 2017.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Financial Instruments

6 Months Ended

Jul. 01, 2017

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Financial Instruments

Derivative Instruments and Hedging Activities

We periodically enter into cash flow derivative transactions, such as interest rate cap agreements, to hedge exposure to various risks related to interest rates. We assess the effectiveness of the interest rate cap hedges at inception of the hedge. We recognize all derivatives at their fair value. For cash flow designated hedges, the effective portion of the changes in fair value of the derivative contract are recorded in accumulated other comprehensive income (loss), net of taxes, and are recognized in net earnings at the time earnings are affected by the hedged transaction. Adjustments to record changes in fair values of the derivative contracts that are attributable to the ineffective portion of the hedges, if any, are recognized in earnings. We present derivative instruments in our condensed consolidated statements of cash flows’ operating, investing, or financing activities consistent with the cash flows of the hedged item.

Our interest rate cap hedges were designated as cash flow hedges and deemed highly effective at the inception of the hedges. These interest rate cap hedges mature concurrently with the term loan in June 2020. During the three months ended July 1, 2017, the interest rate cap hedges continued to be highly effective and $0.1 million, net of tax, was recognized in other comprehensive income. No amount was recorded in the condensed consolidated income statements during the three months ended July 1, 2017. See Note 8.

The recorded fair value of the derivative financial instruments on the condensed consolidated balance sheets were as follows:



	(In thousands) July 1, 2017				(In thousands) December 31, 2016
	Other Current Assets		Other Long Term Assets		Other Current Assets		Other Long Term Assets
Derivatives Designated as Hedging Instruments
Cash Flow Hedges:
Interest rate cap premiums	$	—	$	167	$	—	$	553
Total Derivatives	$	—	$	167	$	—	$	553

Inventories

6 Months Ended

Jul. 01, 2017

Inventory Disclosure [Abstract]

Inventories

Inventories consisted of the following:



	(In thousands)
	July 1, 2017		December 31, 2016
Raw materials and supplies	$	69,307	$	64,650
Work in process	60,517		56,806
Finished goods	10,130		9,180
	139,954		130,636
Less progress payments	10,556		10,740
Total	$	129,398	$	119,896

We net progress payments from customers related to inventory purchases against inventories on the condensed consolidated balance sheets.

Goodwill	6 Months Ended
Goodwill	Jul. 01, 2017
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill	Goodwill Gross goodwill and accumulated goodwill impairment were $164.3 million and $81.7 million, respectively, both as of July 1, 2017 and December 31, 2016. The remaining net goodwill amount is included in our Electronic Systems segment. We perform our annual goodwill impairment test during the fourth quarter. If certain factors occur, we may have to perform an impairment test prior to the fourth quarter including significant under performance of our business relative to expected operating results, significant adverse economic and industry trends, 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. At times, our market capitalization has declined below book value, which if it continues for an extended period of time, is a factor that could lead to a conclusion that a triggering event has occurred. As our market capitalization declines recently have been temporary in nature and our market capitalization has exceeded our book value, we do not consider these temporary declines in market capitalization to be a triggering event in the fiscal quarter ended July 1, 2017. However, since we recorded a goodwill impairment charge in 2015, it is considered at least reasonably possible that our determination that goodwill for our Electronic Systems segment was not impaired could change in the near term if any the factors noted above occurs.

Accrued Liabilities

6 Months Ended

Jul. 01, 2017

Payables and Accruals [Abstract]

Accrued Liabilities

The components of accrued liabilities were as follows:



	(In thousands)
	July 1, 2017		December 31, 2016
Accrued compensation	$	15,874	$	15,455
Accrued income tax and sales tax	41		332
Customer deposits	3,474		3,204
Interest payable	10		273
Provision for forward loss reserves	1,953		4,780
Other	4,462		5,235
Total	$	25,814	$	29,279

Long-Term Debt

6 Months Ended

Jul. 01, 2017

Debt Disclosure [Abstract]

Long-Term Debt

Long-term debt and the current period interest rates were as follows:



	(In thousands)
	July 1, 2017			December 31, 2016
Term loan	$	160,000		$	170,000
Revolving credit facility	12,200			—
Other debt (fixed 5.41%)	—			3
Total debt	172,200			170,003
Less current portion	—			3
Total long-term debt	172,200			170,000
Less debt issuance costs	2,573			3,104
Total long-term debt, net of debt issuance costs	$	169,627		$	166,896
Weighted-average interest rate	3.12		%	3.25		%

Our credit facility consists of a $275.0 million senior secured term loan, which matures on June 26, 2020 (“Term Loan”), and a $200.0 million senior secured revolving credit facility (“Revolving Credit Facility”), which matures on June 26, 2020 (collectively, the “Credit Facilities”). The Credit Facilities bear interest, at our option, at a rate equal to either (i) the Eurodollar Rate (defined as LIBOR) plus an applicable margin ranging from 1.50% to 2.75% per year or (ii) the Base Rate (defined as the highest of [a] Federal Funds Rate plus 0.50%, [b] Bank of America’s prime rate, and [c] the Eurodollar Rate plus 1.00%) plus an applicable margin ranging from 0.50% to 1.75% per year, in each case based upon the consolidated total net adjusted leverage ratio. The undrawn portions of the commitments of the Credit Facilities are subject to a commitment fee ranging from 0.175% to 0.300%, based upon the consolidated total net adjusted leverage ratio.

Further, we are required to make mandatory prepayments of amounts outstanding under the Term Loan. The mandatory prepayments will be made quarterly, equal to 5.0% per year of the original aggregate principal amount during the first two years and increase to 7.5% per year during the third year, and increase to 10.0% per year during the fourth year and fifth years, with the remaining balance payable on June 26, 2020. The loans under the Revolving Credit Facility are due on June 26, 2020. As of July 1, 2017, we were in compliance with all covenants required under the Credit Facilities.

In addition, we incurred $4.8 million of debt issuance costs related to the Credit Facilities and those costs were capitalized and are being amortized over the five year life of the Credit Facilities.

We made voluntary principal prepayments of $5.0 million and $10.0 million under the Term Loan during the three and six months ended July 1, 2017, respectively.

As of July 1, 2017, we had $186.8 million of unused borrowing capacity under the Revolving Credit Facility, after deducting $12.2 million for draw down on the Revolving Credit Facility and $1.0 million for standby letters of credit.

The Credit Facilities were entered into by us (“Parent Company”) and guaranteed by all of our subsidiaries, other than one subsidiary (“Subsidiary Guarantors”) that was considered minor. The Parent Company has no independent assets or operations and the Subsidiary Guarantors jointly and severally guarantee, on a senior unsecured basis, the Credit Facilities. Therefore, no condensed consolidating financial information for the Parent Company and its subsidiaries are presented.

Subsequent to our quarter ended July 1, 2017, we entered into a technical amendment to the Credit Facilities on July 14, 2017 (“First Amendment”) which provides more flexibility to close certain qualified acquisitions permitted under the Credit Facilities.

In October 2015, we entered into interest rate cap hedges designated as cash flow hedges with maturity dates of June 2020, and in aggregate, totaling $135.0 million of our debt. We paid a total of $1.0 million in connection with entering into the interest rate cap hedges. See Note 4 for further discussion.

In December 2016, we entered into an agreement to purchase $9.9 million of industrial revenue bonds (“IRBs”) issued by the city of Parsons, Kansas (“Parsons”) and concurrently, sold $9.9 million of property and equipment (“Property”) to Parsons as well as entered into a lease agreement to lease the Property from Parsons (“Lease”) with lease payments totaling $9.9 million over the lease term. The sale of the Property and concurrent lease back of the Property did not meet the sale-leaseback accounting requirements as a result of our continuous involvement with the Property and thus, the $9.9 million in cash received from Parsons was not recorded as a sale but as a financing obligation. Further, the Lease included a right of offset and thus, the financing obligation of $9.9 million was offset against the $9.9 million of IRBs assets and presented net on the condensed consolidated balance sheets with no impact to the condensed consolidated income statements or condensed consolidated cash flow statements.

Shareholders' Equity	6 Months Ended
Shareholders' Equity	Jul. 01, 2017
Equity [Abstract]
Shareholders' Equity	Shareholders’ Equity We are authorized to issue five million shares of preferred stock. At July 1, 2017 and December 31, 2016, no preferred shares were issued or outstanding.

Employee Benefit Plans

6 Months Ended

Jul. 01, 2017

Retirement Benefits [Abstract]

Employee Benefit Plans

The components of net periodic pension expense were as follows:



	(In thousands)						(In thousands)
	Three Months Ended						Six Months Ended
	July 1, 2017			July 2, 2016			July 1, 2017			July 2, 2016
Service cost	$	132		$	133		$	265		$	266
Interest cost	333			342			665			684
Expected return on plan assets	(382		)	(371		)	(765		)	(741		)
Amortization of actuarial losses	202			190			405			381
Net periodic pension cost	$	285		$	294		$	570		$	590

The components of the reclassifications of net actuarial losses from accumulated other comprehensive loss to net income for the three and six months ended July 1, 2017 were as follows:



	(In thousands)
	Three Months Ended			Six Months Ended
	July 1, 2017			July 1, 2017
Amortization of actuarial losses - total before tax ⁽¹⁾	$	(202	)	$	(405	)
Tax benefit	88			151
Net of tax	$	(114	)	$	(254	)


(1)	The amortization expense is included in the computation of periodic pension cost and is a decrease to net income upon reclassification from accumulated other comprehensive loss.

Indemnifications	6 Months Ended
Indemnifications	Jul. 01, 2017
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. In connection with certain facility leases, we have indemnified our lessors for certain claims arising from the facility or the lease. We indemnify our directors and officers to the maximum extent permitted under the laws of the State of Delaware. However, we 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. The duration of the guarantees and indemnities vary and, in many cases are indefinite but subject to statutes of limitations. The majority of guarantees and indemnities do not provide any limitations of 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 on the accompanying condensed consolidated balance sheets.

Income Taxes	6 Months Ended
Income Taxes	Jul. 01, 2017
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 and deductions available for domestic production activities. 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, the 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. We recognize deferred tax assets and liabilities 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 $0.7 million (effective tax rate of 16.2%) for the three months ended July 1, 2017 compared to $1.5 million (effective tax rate of 27.6%) for the three months ended July 2, 2016. FASB ASU 2016-09 became effective beginning January 1, 2017 and required all the tax effects related to share-based payments be recorded through the income statement. This could result in fluctuations in our effective tax rate from period to period, depending on the number of awards exercised and/or vested in the quarter as well as the volatility of our stock price. As such, the decrease in the effective tax rate for the three months ended July 1, 2017 compared to the three months ended July 2, 2016 was primarily due to tax benefits recognized from share-based payments. During the current year three month period, we recognized tax benefits from deductions of share-based payments in excess of compensation cost recognized for financial reporting purposes of $0.3 million, which decreased our effective tax rate by 7.2%. We recorded income tax expense of $1.1 million (effective tax rate of 16.0%) for the six months ended July 1, 2017 compared to $8.6 million (effective tax rate of 33.1%) for the six months ended July 2, 2016. The decrease in the effective tax rate for the six months ended July 1, 2017 compared to the six months ended July 2, 2016 was primarily due to the preliminary gain on divestitures of our Pittsburgh and Miltec operations of $18.8 million, which resulted in a higher state tax liability, compared to the current year six month period. In addition, during the current year six month period, we recognized tax benefits from deductions of share-based payments in excess of compensation cost recognized for financial reporting purposes of $0.6 million, which decreased the effective tax rate by 8.1%. Our total amount of unrecognized tax benefits was $3.4 million and $3.0 million as of July 1, 2017 and December 31, 2016, respectively. If recognized, $2.2 million would affect the effective tax rate. We do not reasonably expect significant increases or decreases to our unrecognized tax benefits in the next twelve months. In 2016, the Internal Revenue Service (“IRS”) commenced an audit of our 2014 and 2015 tax years. Although the outcome of tax examinations cannot be predicted with certainty, 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.

Contingencies	6 Months Ended
Contingencies	Jul. 01, 2017
Commitments and Contingencies Disclosure [Abstract]
Contingencies	Contingencies Structural Systems has been directed by California environmental agencies to investigate and take corrective action for groundwater contamination at its facilities located in El Mirage and Monrovia, California. Based on currently available information, Ducommun has established an accrual for its estimated liability for such investigation and corrective action of $1.5 million at both July 1, 2017 and December 31, 2016, which is reflected in other long-term liabilities on its condensed consolidated balance sheets. 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, Ducommun preliminarily estimates that the range of its future liabilities in connection with the landfill located in West Covina, California is between $0.4 million and $3.1 million. Ducommun has established an accrual for its estimated liability, in connection with the West Covina landfill of $0.4 million at July 1, 2017, which is reflected in other long-term liabilities on its condensed consolidated balance sheet. Ducommun’s 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. 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. 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

6 Months Ended

Jul. 01, 2017

Segment Reporting [Abstract]

Business Segment Information

We supply products and services primarily to the aerospace and defense industries. Our subsidiaries are organized into two strategic businesses, Structural Systems and Electronic Systems, each of which is a reportable operating segment.

Financial information by reportable operating segment was as follows:



	(In thousands) Three Months Ended						(In thousands) Six Months Ended
	July 1, 2017			July 2, 2016			July 1, 2017			July 2, 2016
Net Revenues
Structural Systems	$	59,112		$	60,694		$	116,687		$	124,711
Electronic Systems	81,826			72,743			160,548			150,874
Total Net Revenues	$	140,938		$	133,437		$	277,235		$	275,585
Segment Operating Income
Structural Systems	$	2,049		$	4,730		$	4,681		$	7,454
Electronic Systems	8,820			6,782			15,924			13,169
	10,869			11,512			20,605			20,623
Corporate General and Administrative Expenses ⁽¹⁾	(4,398		)	(4,246		)	(10,034		)	(9,064		)
Operating Income	$	6,471		$	7,266		$	10,571		$	11,559
Depreciation and Amortization Expenses
Structural Systems	$	2,307		$	1,775		$	4,659		$	3,832
Electronic Systems	3,439			3,668			6,862			7,429
Corporate Administration	2			33			9			70
Total Depreciation and Amortization Expenses	$	5,748		$	5,476		$	11,530		$	11,331
Capital Expenditures
Structural Systems	$	7,580		$	4,540		$	12,768		$	6,594
Electronic Systems	1,030			407			2,463			754
Corporate Administration	648			—			648			—
Total Capital Expenditures	$	9,258		$	4,947		$	15,879		$	7,348


(1)	Includes costs not allocated to either the Structural Systems or Electronic Systems operating segments.

Segment assets include assets directly identifiable to or allocated to each segment. Our segment assets are as follows:



	(In thousands)
	July 1, 2017		December 31, 2016
Total Assets
Structural Systems	$	203,297	$	175,580
Electronic Systems	318,243		325,780
Corporate Administration ⁽¹⁾	14,232		14,069
Total Assets	$	535,772	$	515,429
Goodwill and Intangibles
Structural Systems	$	3,290	$	3,745
Electronic Systems	176,419		180,382
Total Goodwill and Intangibles	$	179,709	$	184,127


(1)	Includes assets not specifically identified to or allocated to either the Structural Systems or Electronic Systems operating segments, including cash and cash equivalents.

Summary of Significant Accounting Policies (Policies)	6 Months Ended
Summary of Significant Accounting Policies (Policies)	Jul. 01, 2017
Accounting Policies [Abstract]
Description of Business	Description of Business We are a leading global provider of engineering and manufacturing services 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 subsidiaries are organized into two strategic businesses: Electronic Systems segment and Structural Systems segment, each of which is a reportable operating segment. Electronic Systems designs, engineers and manufactures high-reliability products used in worldwide technology-driven markets including aerospace, defense, industrial and medical and other end-use markets. Electronic Systems’ product offerings range from prototype development to complex assemblies. Structural Systems designs, engineers and manufactures large, complex contoured aerospace structural components and assemblies and supplies composite and metal bonded structures and assemblies. Structural Systems’ products are 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	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, 2016 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, 2016. We followed the same accounting policies for interim reporting. The financial information included in this Quarterly Report on Form 10-Q should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2016. In the opinion of management, all adjustments, consisting of recurring accruals, have been made that are necessary to fairly state our condensed consolidated financial position, statements of income, comprehensive income and cash flows in accordance with GAAP for the periods covered by this Quarterly Report on Form 10-Q. The results of operations for the three and six months ended July 1, 2017 are not necessarily indicative of the results to be expected for the full year ending December 31, 2017. 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 ends 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	Use of Estimates Certain amounts and disclosures included in the unaudited condensed consolidated financial statements requires management to make estimates and judgments that affect the amounts of assets, liabilities (including forward loss reserves), 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.
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 are computed by dividing income available to common shareholders by the weighted-average number of common shares outstanding, plus any potential 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 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.
Cash and Cash Equivalents	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, which we classify as Level 1. See Fair Value above.
Derivatives 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, a hedge of a net investment in a foreign operation, or a derivative instrument that will not be accounted for using hedge accounting methods. As of July 1, 2017, 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 hedge. We record any hedge ineffectiveness and amounts excluded from effectiveness testing in current period earnings within interest expense. 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. 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, with units being relieved and charged to cost of sales on a first-in, first-out basis. Raw materials are based on cost and other inventory classifications are based on net realizable value. Inventoried costs include raw materials, outside processing, direct labor and allocated overhead, adjusted for any abnormal amounts of idle facility expense, freight, handling costs, and wasted materials (spoilage) incurred. Costs under long-term contracts are accumulated into, and removed from, inventory on the same basis as other contracts. 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. We maintain a reserve for potentially excess and obsolete inventories and inventories that are carried at costs that are higher than their estimated net realizable values.
Production Cost of Contracts	Production Cost of Contracts 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 goods sold using the units of delivery method. 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.
Accumulated Other Comprehensive Loss	Accumulated Other Comprehensive Loss Accumulated other comprehensive loss, 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.
Provision for Estimated Losses on Contracts	Provision for Estimated Losses on Contracts 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 improvements in manufacturing efficiency, reductions in 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 record additional provisions for estimated losses on contracts.
Recent Accounting Pronouncements	Recent Accounting Pronouncements New Accounting Guidance Adopted in 2017 In December 2016, the FASB issued ASU 2016-19, “Technical Corrections and Improvements” (“2016-19”), which cover a variety of Topics in the Codification. The amendments in ASU 2016-19 represent changes to make corrections or improvements to the Codification that are not expected to have a significant effect on current accounting practice or create a significant administrative cost to most entities. The new guidance was effective for us beginning January 1, 2017. The adoption of this standard did not have a significant impact on our condensed consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, “Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting” (“ASU 2016-09”), which is intended to improve the accounting for employee share-based payments. The new guidance was effective for us beginning January 1, 2017. The adoption of this standard did not have a significant dollar impact on our condensed consolidated financial statements. In March 2016, the FASB issued ASU 2016-05, “Derivatives and Hedging (Topic 815): Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships” (“ASU 2016-05”), which clarifies that a change in the counter party to a derivative instrument designated as a hedging instrument does not require dedesignation of that hedging relationship, provided that all other hedge accounting criteria are met. The new guidance was effective for us beginning January 1, 2017. The adoption of this standard did not have a significant impact on our condensed consolidated financial statements. In July 2015, the FASB issued ASU 2015-11, “Inventory (Topic 330)” (“ASU 2015-11”), which requires inventory within the scope of ASU 2015-11 to be measured at the lower of cost or net realizable value. Subsequent measurement is unchanged for inventory measured using last-in, first-out (“LIFO”) or the retail inventory value. The new guidance was effective for us beginning January 1, 2017. The adoption of this standard did not have a significant impact on our condensed consolidated financial statements. Recently Issued Accounting Standards In May 2017, the FASB issued ASU 2017-09, “Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting” (“ASU 2017-09”), which provides clarity on determining which changes to the terms and conditions of share-based payment awards require an entity to apply modification accounting under Topic 718. The new guidance is effective for annual periods beginning after December 15, 2017, including interim periods within those annual periods, which will be our interim period beginning January 1, 2018. Early adoption is permitted, including adoption in any interim period. The amendments should be applied prospectively to an award modified on or after the adoption date. We are evaluating the impact of this standard. In March 2017, the FASB issued ASU 2017-07, “Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Costs” (“ASU 2017-07”), which require an employer to report the service cost component in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost are required to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations, if one is presented. If a separate line item or items are used to present the other components of net benefit cost, that line item or items must be appropriately described. If a separate line item or items are not used, the line item or items used in the income statement to present the other components of net benefit cost must be disclosed. The amendments also allow only the service cost component to be eligible for capitalization when applicable. The new guidance is effective for annual periods beginning after December 15, 2017, including interim periods within those annual periods, which will be our interim period beginning January 1, 2018. We are evaluating the impact of this standard. In January 2017, the FASB issued ASU 2017-04, “Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment” (“ASU 2017-04”), which simplifies the subsequent measurement of goodwill, the amendments eliminate Step Two from the goodwill impairment test. The annual, or interim, goodwill impairment test is performed by comparing the fair value of a reporting unit with its carrying amount. An impairment charge should be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. In addition, income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit should be considered when measuring the goodwill impairment loss, if applicable. The amendments also eliminate the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step Two of the goodwill impairment test. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. The new guidance is effective for annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. We are evaluating the impact of this standard. In January 2017, the FASB issued ASU 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business” (“ASU 2017-01”), which clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of businesses. The new guidance is effective for annual periods beginning after December 15, 2017, including interim periods within those annual periods, which will be our interim period beginning January 1, 2018. We are evaluating the impact of this standard. In December 2016, the FASB issued ASU 2016-20, “Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers” (“ASU 2016-20”), which cover a variety of Topics in the Codification related to the new revenue recognition standard (ASU 2014-09). The amendments in ASU 2016-20 represent changes to make minor corrections or minor improvements to the Codification that are not expected to have a significant effect on current accounting practice or create a significant administrative cost to most entities. The new guidance is effective for annual periods beginning after December 15, 2017, including interim periods within those annual periods, which will be our interim period beginning January 1, 2018. We are evaluating the impact of this standard. In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments” (“ASU 2016-15”), which addresses the following eight specific cash flow issues: Debt prepayment or debt extinguishment costs; settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing; contingent consideration payments made after a business combination; proceeds from the settlement of insurance claims; proceeds from the settlement of corporate-owned life insurance policies (“COLIs”) (including bank-owned life insurance policies [“BOLIs”]); distributions received from equity method investees; beneficial interests in securitization transactions; and separately identifiable cash flows and application of the predominance principle. The new guidance is effective for annual periods beginning after December 15, 2017, including interim periods within those annual periods, which will be our interim period beginning January 1, 2018. We are evaluating the impact of this standard. In May 2016, the FASB issued ASU 2016-12, “Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients” (“ASU 2016-12”), which amends the guidance in the new revenue standard on collectability, noncash consideration, presentation of sales tax, and transition. The amendments are intended to address implementation issues and provide additional practical expedients to reduce the cost and complexity of applying the new revenue standard. The new guidance is effective for annual periods beginning after December 15, 2017, including interim periods within those annual periods, which will be our interim period beginning January 1, 2018. Early adoption is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods with that reporting period. We are evaluating the impact of this standard. In May 2016, the FASB issued ASU 2016-11, “Revenue Recognition (Topic 605) and Derivatives and Hedging (Topic 815): Rescission of SEC Guidance Because of Accounting Standards Updates 2014-09 and 2014-06 Pursuant to Staff Announcements at the March 3, 2016 EITF Meeting” (“ASU 2016-11”), which clarifies revenue and expense recognition for freight costs, accounting for shipping and handling fees and costs, and accounting for consideration given by a vendor to a customer. The new guidance is effective for annual periods beginning after December 15, 2017, including interim periods within those annual periods, which will be our interim period beginning January 1, 2018. Early adoption is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods with that reporting period. We are evaluating the impact of this standard. In April 2016, the FASB issued ASU 2016-10, “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing” (“ASU 2016-10”), which clarifies the following two aspects of Topic 606: (a) identifying performance obligations; and (b) the licensing implementation guidance. The amendments do not change the core principle of the guidance in Topic 606. The new guidance is effective for annual periods beginning after December 15, 2017, including interim periods within those annual periods, which will be our interim period beginning January 1, 2018. Early adoption is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods with that reporting period. We are evaluating the impact of this standard. In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)” (“ASU 2016-02”), which requires lessees to present right-of-use assets and lease liabilities on the balance sheet. Lessees are required to apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The new guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, which will be our interim period beginning January 1, 2019. We are evaluating the impact of this standard and currently anticipate it will impact our condensed consolidated financial statements. In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”), which outlines a new, single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. This new revenue recognition model provides a five-step analysis in determining when and how revenue is recognized. It requires entities to exercise judgment when considering the terms of the contract(s) which include (i) identifying the contract(s) with the customer, (ii) identifying the separate performance obligations in the contract, (iii) determining the transaction price, (iv) allocating the transaction price to the separate performance obligations, and (v) recognizing revenue when each performance obligation is satisfied. Thus, it depicts the transfer of promised goods or services to customers in an amount that reflects the consideration an entity expects to receive in exchange for those goods or services. Companies have the option of applying the provisions of ASU 2014-09 either retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of initially applying this guidance recognized at the date of initial application. In August 2015, the FASB issued ASU 2015-14, “Revenue From Contracts With Customers (Topic 606)” (“ASU 2015-14”), which deferred the effective date of ASU 2014-09 by one year to annual periods beginning after December 15, 2017, including interim reporting periods within that reporting period. Early adoption is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. The new guidance is effective for us beginning January 1, 2018 and provides us additional time to evaluate the impact that ASU 2014-09 will have on our condensed consolidated financial statements. We are currently completing the assessment and gap identification phases of the implementation project. This includes reviewing current accounting policies and practices to identify potential differences that would result from applying the requirements under the new accounting standard. We are in the process of completing the contract evaluations and validating the results of applying the new revenue guidance. As the percentage of completion, unit of delivery method of recognizing revenue is being eliminated for companies with significant work-in-process inventory time under ASU 2014-09, we currently anticipate most of our revenues will be recognized over time instead of at a point in time, which is our current method for recognizing revenue. As such, our revenues, cost of sales, and related items on our condensed consolidated financial statements will be impacted as well as our financial information technology systems. Further, we have selected a software solution and are in the preliminary stage of implementing the software solution to comply with this new accounting standard. Finally, we expect to adopt the new accounting standard using the modified retrospective method, under which the cumulative effect of initially applying the new guidance is recognized as an adjustment to certain captions on the balance sheet, including the opening balance of retained earnings in the first quarter of 2018.

Summary of Significant Accounting Policies (Tables)

6 Months Ended

Jul. 01, 2017

Accounting Policies [Abstract]

Schedule of Supplemental Cash Flow Information

Supplemental Cash Flow Information



	(In thousands) Six Months Ended
	July 1, 2017		July 2, 2016
Interest paid	$	3,102	$	3,741
Taxes paid	$	685	$	2,479
Non-cash activities:
Purchases of property and equipment not paid	$	2,878	$	1,278

Weighted Average Number of Shares Outstanding Used to Compute Earnings Per Share

The net income, weighted-average number of common shares outstanding used to compute earnings per share, were as follows:



	(In thousands, except per share data) Three Months Ended				(In thousands, except per share data) Six Months Ended
	July 1, 2017		July 2, 2016		July 1, 2017		July 2, 2016
Net income	$	3,823	$	3,861	$	5,938	$	17,411
Weighted-average number of common shares outstanding
Basic weighted-average common shares outstanding	11,237		11,155		11,253		11,127
Dilutive potential common shares	254		109		303		118
Diluted weighted-average common shares outstanding	11,491		11,264		11,556		11,245
Earnings per share
Basic	$	0.34	$	0.35	$	0.53	$	1.56
Diluted	$	0.33	$	0.34	$	0.51	$	1.55

Weighted Average Number of Shares Outstanding Excluded from Computation of Diluted Earnings

(In thousands)

Three Months Ended

(In thousands)

Six Months Ended

July 1,
2017

July 2,
2016

July 1,
2017

July 2,
2016

Stock options and stock units

154

674

156

632

Restructuring Activities (Tables)

6 Months Ended

Jul. 01, 2017

Restructuring and Related Activities [Abstract]

Schedule of Restructuring Activities

Our restructuring activities in the six months ended July 1, 2017 were as follows (in thousands):



	December 31, 2016		Six Months Ended July 1, 2017							July 1, 2017
	Balance		Charges		Cash Payments			Change in Estimates		Balance
Lease termination	$	654	$	—	$	(156	)	$	—	$	498
Ending balance	$	654	$	—	$	(156	)	$	—	$	498

Fair Value Measurements (Tables)

6 Months Ended

Jul. 01, 2017

Fair Value Disclosures [Abstract]

Schedule of Fair Value Measurements



	As of July 1, 2017								As of December 31, 2016
	Fair Value Measurements Using								Fair Value Measurements Using
	Level 1		Level 2		Level 3		Total Balance		Level 1		Level 2		Level 3		Total Balance
Assets
Money market funds⁽¹⁾	$	21	$	—	$	—	$	21	$	3,751	$	—	$	—	$	3,751
Interest rate cap hedges⁽²⁾	—		167		—		167		—		553		—		553
Total Assets	$	21	$	167	$	—	$	188	$	3,751	$	553	$	—	$	4,304

(1) Included as cash and cash equivalents.

(2) Interest rate cap hedge premium included as other current assets and other assets.

- Definition

Tabular disclosure of financial instruments measured at fair value, including those classified in shareholders' equity measured on a recurring or nonrecurring basis. Disclosures include, but are not limited to, fair value measurements recorded and the reasons for the measurements, level within the fair value hierarchy in which the fair value measurements are categorized and transfers between levels 1 and 2. Nonrecurring fair value measurements are those that are required or permitted in the statement of financial position in particular circumstances.

+ References + Details

Financial Instruments (Tables)

6 Months Ended

Jul. 01, 2017

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Derivative Instruments

The recorded fair value of the derivative financial instruments on the condensed consolidated balance sheets were as follows:



	(In thousands) July 1, 2017				(In thousands) December 31, 2016
	Other Current Assets		Other Long Term Assets		Other Current Assets		Other Long Term Assets
Derivatives Designated as Hedging Instruments
Cash Flow Hedges:
Interest rate cap premiums	$	—	$	167	$	—	$	553
Total Derivatives	$	—	$	167	$	—	$	553

- Definition

Tabular disclosure of pertinent information about a derivative or group of derivatives on a disaggregated basis, such as for individual instruments, or small groups of similar instruments. May include a combination of the type of instrument, risks being hedged, notional amount, hedge designation, related hedged item, inception date, maturity date, or other relevant item.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
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-Section 50
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+ Details

Inventories (Tables)

6 Months Ended

Jul. 01, 2017

Inventory Disclosure [Abstract]

Summary of Inventories

Inventories consisted of the following:



	(In thousands)
	July 1, 2017		December 31, 2016
Raw materials and supplies	$	69,307	$	64,650
Work in process	60,517		56,806
Finished goods	10,130		9,180
	139,954		130,636
Less progress payments	10,556		10,740
Total	$	129,398	$	119,896

Long-Term Debt (Tables)

6 Months Ended

Jul. 01, 2017

Debt Disclosure [Abstract]

Long Term Debt Summary

Long-term debt and the current period interest rates were as follows:



	(In thousands)
	July 1, 2017			December 31, 2016
Term loan	$	160,000		$	170,000
Revolving credit facility	12,200			—
Other debt (fixed 5.41%)	—			3
Total debt	172,200			170,003
Less current portion	—			3
Total long-term debt	172,200			170,000
Less debt issuance costs	2,573			3,104
Total long-term debt, net of debt issuance costs	$	169,627		$	166,896
Weighted-average interest rate	3.12		%	3.25		%

- Definition

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

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Reference 1: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
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-Subparagraph (SX 210.5-02.22)
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+ Details

Employee Benefit Plans (Tables)

6 Months Ended

Jul. 01, 2017

Retirement Benefits [Abstract]

Components of Net Periodic Pension Cost

The components of net periodic pension expense were as follows:



	(In thousands)						(In thousands)
	Three Months Ended						Six Months Ended
	July 1, 2017			July 2, 2016			July 1, 2017			July 2, 2016
Service cost	$	132		$	133		$	265		$	266
Interest cost	333			342			665			684
Expected return on plan assets	(382		)	(371		)	(765		)	(741		)
Amortization of actuarial losses	202			190			405			381
Net periodic pension cost	$	285		$	294		$	570		$	590

Reclassification out of Accumulated Other Comprehensive Income

The components of the reclassifications of net actuarial losses from accumulated other comprehensive loss to net income for the three and six months ended July 1, 2017 were as follows:



	(In thousands)
	Three Months Ended			Six Months Ended
	July 1, 2017			July 1, 2017
Amortization of actuarial losses - total before tax ⁽¹⁾	$	(202	)	$	(405	)
Tax benefit	88			151
Net of tax	$	(114	)	$	(254	)


(1)	The amortization expense is included in the computation of periodic pension cost and is a decrease to net income upon reclassification from accumulated other comprehensive loss.

Business Segment Information (Tables)

6 Months Ended

Jul. 01, 2017

Segment Reporting [Abstract]

Financial Information by Reportable Segment

Financial information by reportable operating segment was as follows:



	(In thousands) Three Months Ended						(In thousands) Six Months Ended
	July 1, 2017			July 2, 2016			July 1, 2017			July 2, 2016
Net Revenues
Structural Systems	$	59,112		$	60,694		$	116,687		$	124,711
Electronic Systems	81,826			72,743			160,548			150,874
Total Net Revenues	$	140,938		$	133,437		$	277,235		$	275,585
Segment Operating Income
Structural Systems	$	2,049		$	4,730		$	4,681		$	7,454
Electronic Systems	8,820			6,782			15,924			13,169
	10,869			11,512			20,605			20,623
Corporate General and Administrative Expenses ⁽¹⁾	(4,398		)	(4,246		)	(10,034		)	(9,064		)
Operating Income	$	6,471		$	7,266		$	10,571		$	11,559
Depreciation and Amortization Expenses
Structural Systems	$	2,307		$	1,775		$	4,659		$	3,832
Electronic Systems	3,439			3,668			6,862			7,429
Corporate Administration	2			33			9			70
Total Depreciation and Amortization Expenses	$	5,748		$	5,476		$	11,530		$	11,331
Capital Expenditures
Structural Systems	$	7,580		$	4,540		$	12,768		$	6,594
Electronic Systems	1,030			407			2,463			754
Corporate Administration	648			—			648			—
Total Capital Expenditures	$	9,258		$	4,947		$	15,879		$	7,348


(1)	Includes costs not allocated to either the Structural Systems or Electronic Systems operating segments.

Segment Assets

Our segment assets are as follows:



	(In thousands)
	July 1, 2017		December 31, 2016
Total Assets
Structural Systems	$	203,297	$	175,580
Electronic Systems	318,243		325,780
Corporate Administration ⁽¹⁾	14,232		14,069
Total Assets	$	535,772	$	515,429
Goodwill and Intangibles
Structural Systems	$	3,290	$	3,745
Electronic Systems	176,419		180,382
Total Goodwill and Intangibles	$	179,709	$	184,127


(1)	Includes assets not specifically identified to or allocated to either the Structural Systems or Electronic Systems operating segments, including cash and cash equivalents.

Summary of Significant Accounting Policies - Supplemental Cash Flow Items (Details) - USD ($) $ in Thousands	6 Months Ended
	Jul. 01, 2017	Jul. 02, 2016
Supplemental Disclosures of Cash Flow Information
Interest paid	$ 3,102	$ 3,741
Taxes paid	685	2,479
Non-cash activities:
Purchases of property and equipment not paid	$ 2,878	$ 1,278

Summary of Significant Accounting Policies - Weighted Average Number of Shares Outstanding Used to Compute Earnings Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 01, 2017	Jul. 02, 2016	Jul. 01, 2017	Jul. 02, 2016
Accounting Policies [Abstract]
Net income	$ 3,823	$ 3,861	$ 5,938	$ 17,411
Weighted-average number of common shares outstanding
Basic weighted-average common shares outstanding (in shares)	11,237	11,155	11,253	11,127
Dilutive potential common shares (in shares)	254	109	303	118
Diluted weighted-average common shares outstanding (in shares)	11,491	11,264	11,556	11,245
Earnings per share
Basic (in dollars per share)	$ 0.34	$ 0.35	$ 0.53	$ 1.56
Diluted (in dollars per share)	$ 0.33	$ 0.34	$ 0.51	$ 1.55

Summary of Significant Accounting Policies - Weighted Average Number of Shares Outstanding Excluded from Computation of Diluted Earnings (Detail) - shares shares in Thousands	3 Months Ended		6 Months Ended
	Jul. 01, 2017	Jul. 02, 2016	Jul. 01, 2017	Jul. 02, 2016
Stock Options and Restricted Stock Units
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potentially dilutive stock options and stock units to purchase common stock (in shares)	154	674	156	632

Summary of Significant Accounting Policies - Divestitures (Details) - Assets Disposed of by Sale - USD ($) $ in Millions			12 Months Ended
	Mar. 25, 2016	Jan. 22, 2016	Dec. 31, 2016
Electronic Systems \| Pittsburgh, Pennsylvania Operations
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Consideration received		$ 38.5
Assets divested, net		24.0
Liabilities divested, net		4.0
Transaction costs		0.2
Gain (loss) on divestiture		$ 18.3
Electronic Systems \| Miltec Operations
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Consideration received	$ 14.6
Assets divested, net	15.4
Liabilities divested, net	2.6
Transaction costs	1.3
Gain (loss) on divestiture	$ 0.5
Ducommun La Barge Technologies \| Pittsburgh, Pennsylvania Operations
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Consideration received			$ 38.6
Assets divested, net			24.0
Liabilities divested, net			4.0
Transaction costs			0.3
Gain (loss) on divestiture			18.3
Ducommun La Barge Technologies \| Miltec Operations
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Consideration received			13.3
Assets divested, net			15.4
Liabilities divested, net			2.7
Transaction costs			1.3
Gain (loss) on divestiture			$ (0.7)

Restructuring Activities (Details) $ in Thousands	6 Months Ended
Restructuring Activities (Details) $ in Thousands	Jul. 01, 2017 USD ($)
Restructuring Reserve [Roll Forward]
Beginning balance	$ 654
Charges	0
Cash Payments	(156)
Change in Estimates	0
Ending balance	498
Lease termination
Restructuring Reserve [Roll Forward]
Beginning balance	654
Charges	0
Cash Payments	(156)
Change in Estimates	0
Ending balance	498
Restructuring Plan, 2015 \| Severance benefits and loss on early exit from leases
Restructuring Cost and Reserve [Line Items]
Restructuring costs	2,200
Restructuring Plan, 2015 \| Structural Systems \| Severance and benefits
Restructuring Reserve [Roll Forward]
Ending balance	400
Restructuring Plan, 2016 \| Severance benefits and loss on early exit from leases
Restructuring Cost and Reserve [Line Items]
Restructuring costs	200
Restructuring Plan, 2016 \| Electronic Systems \| Lease termination
Restructuring Reserve [Roll Forward]
Ending balance	$ 100

Fair Value Measurements (Details) - Recurring Measurement - USD ($) $ in Thousands	Jul. 01, 2017	Dec. 31, 2016
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Money market funds	$ 21	$ 3,751
Interest rate cap hedges	167	553
Total Assets	188	4,304
Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Money market funds	21	3,751
Interest rate cap hedges	0	0
Total Assets	21	3,751
Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Money market funds	0	0
Interest rate cap hedges	167	553
Total Assets	167	553
Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Money market funds	0	0
Interest rate cap hedges	0	0
Total Assets	$ 0	$ 0

Financial Instruments (Details) - USD ($)	3 Months Ended		6 Months Ended
Financial Instruments (Details) - USD ($)	Jul. 01, 2017	Jul. 02, 2016	Jul. 01, 2017	Jul. 02, 2016	Dec. 31, 2016
Derivative [Line Items]
Interest rate cap hedges recognized in other comprehensive income, net of tax	$ 122,000	$ 148,000	$ 243,000	$ 556,000
Other Current Assets
Derivative [Line Items]
Derivative asset	0		0		$ 0
Other Long Term Assets
Derivative [Line Items]
Derivative asset	167,000		167,000		553,000
Interest rate cap premiums
Derivative [Line Items]
Interest rate cap hedges recognized in other comprehensive income, net of tax	100,000
Gain (loss) on derivatives, net	0
Cash Flow Hedging \| Designated as Hedging Instrument \| Interest rate cap premiums \| Other Current Assets
Derivative [Line Items]
Derivative asset	0		0		0
Cash Flow Hedging \| Designated as Hedging Instrument \| Interest rate cap premiums \| Other Long Term Assets
Derivative [Line Items]
Derivative asset	$ 167,000		$ 167,000		$ 553,000

Inventories (Detail) - USD ($) $ in Thousands	Jul. 01, 2017	Dec. 31, 2016
Inventory Disclosure [Abstract]
Raw materials and supplies	$ 69,307	$ 64,650
Work in process	60,517	56,806
Finished goods	10,130	9,180
Inventory, gross	139,954	130,636
Less progress payments	10,556	10,740
Total	$ 129,398	$ 119,896

Goodwill (Detail) - Electronic Systems - USD ($) $ in Millions	Jul. 01, 2017	Dec. 31, 2016
Goodwill [Line Items]
Gross goodwill	$ 164.3	$ 164.3
Accumulated goodwill impairment	$ 81.7	$ 81.7

Accrued Liabilities (Detail) - USD ($) $ in Thousands	Jul. 01, 2017	Dec. 31, 2016
Payables and Accruals [Abstract]
Accrued compensation	$ 15,874	$ 15,455
Accrued income tax and sales tax	41	332
Customer deposits	3,474	3,204
Interest payable	10	273
Provision for forward loss reserves	1,953	4,780
Other	4,462	5,235
Total	$ 25,814	$ 29,279

Long Term Debt - Summary (Detail) - USD ($) $ in Thousands	Jul. 01, 2017	Dec. 31, 2016
Debt Instrument [Line Items]
Long-term debt	$ 172,200	$ 170,003
Less current portion	0	3
Total long-term debt	172,200	170,000
Less debt issuance costs	2,573	3,104
Total long-term debt, net of debt issuance costs	$ 169,627	$ 166,896
Weighted-average interest rate (percent)	3.12%	3.25%
Senior Secured Term Loan
Debt Instrument [Line Items]
Long-term debt	$ 160,000	$ 170,000
Revolving Credit Facility
Debt Instrument [Line Items]
Long-term debt	12,200	0
Other Debt
Debt Instrument [Line Items]
Long-term debt	$ 0	$ 3
Fixed rate, note (percent)	5.41%

Long-Term Debt - Additional information (Detail)	1 Months Ended		3 Months Ended		6 Months Ended
Long-Term Debt - Additional information (Detail)	Dec. 31, 2016 USD ($)	Oct. 31, 2015 USD ($)	Jul. 01, 2017 USD ($)	Jul. 04, 2015 USD ($)	Jul. 01, 2017 USD ($) subsidiary	Jun. 30, 2015 USD ($)
Debt Instrument [Line Items]
Long-term debt	$ 166,896,000		$ 169,627,000		$ 169,627,000
Parsons, KS \| Municipal Bonds
Debt Instrument [Line Items]
Revenue bonds purchased	9,900,000
Parsons, KS
Debt Instrument [Line Items]
Proceeds received from sale of property to be leased back	9,900,000
Total lease liability from assets sold	$ 9,900,000
Interest rate cap
Debt Instrument [Line Items]
Interest rate hedge		$ 135,000,000
Payments made for interest rate hedge		$ 1,000,000
New Credit Facilities
Debt Instrument [Line Items]
Number of subsidiaries that are not guarantors on debt \| subsidiary					1
New Credit Facilities \| First two years
Debt Instrument [Line Items]
Prepayment amount of principal outstanding			5.00%		5.00%
New Credit Facilities \| Third year
Debt Instrument [Line Items]
Prepayment amount of principal outstanding			7.50%		7.50%
New Credit Facilities \| Fourth and fifth years
Debt Instrument [Line Items]
Prepayment amount of principal outstanding			10.00%		10.00%
New Credit Facilities \| Minimum
Debt Instrument [Line Items]
Commitment fee					0.175%
New Credit Facilities \| Maximum
Debt Instrument [Line Items]
Commitment fee					0.30%
New Credit Facilities \| LIBOR \| Minimum
Debt Instrument [Line Items]
Spread on variable rate					1.50%
New Credit Facilities \| LIBOR \| Maximum
Debt Instrument [Line Items]
Spread on variable rate					2.75%
New Credit Facilities \| Federal Funds Rate
Debt Instrument [Line Items]
Spread on base rate					0.50%
New Credit Facilities \| Eurodollar Rate
Debt Instrument [Line Items]
Spread on base rate					1.00%
New Credit Facilities \| Base Rate \| Minimum
Debt Instrument [Line Items]
Spread on variable rate					0.50%
New Credit Facilities \| Base Rate \| Maximum
Debt Instrument [Line Items]
Spread on variable rate					1.75%
Senior Secured Term Loan \| New Credit Facilities
Debt Instrument [Line Items]
Debt amount						$ 275,000,000.0
Term				5 years
Repayments of long-term debt			$ 5,000,000		$ 10,000,000
Revolving Credit Facility \| New Credit Facilities
Debt Instrument [Line Items]
Debt amount						$ 200,000,000.0
Debt issuance costs				$ 4,800,000
Borrowings from debt					12,200,000
Remaining borrowing capacity			186,800,000		186,800,000
Outstanding standby letters of credit			$ 1,000,000		$ 1,000,000

Shareholders' Equity (Detail) - shares	Jul. 01, 2017	Dec. 31, 2016
Equity [Abstract]
Preferred stock, shares authorized (in shares)	5,000,000	5,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0

Employee Benefit Plans - Components of Net Periodic Pension Cost for Defined Benefit Pension Plan and Retirement Plan (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 01, 2017	Jul. 02, 2016	Jul. 01, 2017	Jul. 02, 2016
Retirement Benefits [Abstract]
Service cost	$ 132	$ 133	$ 265	$ 266
Interest cost	333	342	665	684
Expected return on plan assets	(382)	(371)	(765)	(741)
Amortization of actuarial losses	202	190	405	381
Net periodic pension cost	$ 285	$ 294	$ 570	$ 590

Employee Benefit Plans - Reclassifications from Accumulated Other Comprehensive Income (Detail) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jul. 01, 2017	Jul. 01, 2017
Retirement Benefits [Abstract]
Amortization of actuarial loss - total before tax	$ (202)	$ (405)
Tax benefit	88	151
Net of tax	$ (114)	$ (254)

Income Taxes (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
Income Taxes (Detail) - USD ($) $ in Thousands	Jul. 01, 2017	Jul. 02, 2016	Jul. 01, 2017	Jul. 02, 2016	Dec. 31, 2016
Income Tax Disclosure [Abstract]
Income tax expense (benefit)	$ 741	$ 1,470	$ 1,133	$ 8,629
Effective income tax expense (benefit) rate	16.20%	27.60%	16.00%	33.10%
Excess tax benefit	$ 300		$ 600
Decrease in effective tax rate	7.20%		8.10%
Gain on divestitures	$ 0	$ 0	$ 0	$ 18,815
Unrecognized tax benefits	3,400		3,400		$ 3,000
Expected reduction in unrecognized tax benefits	$ 2,200		$ 2,200

Contingencies (Detail) - Structural Systems - USD ($) $ in Millions	Jul. 01, 2017	Dec. 31, 2016
El Mirage and Monrovia, California
Loss Contingencies [Line Items]
Reserve for estimated liability	$ 1.5	$ 1.5
West Covina, California
Loss Contingencies [Line Items]
Reserve for estimated liability	0.4
Minimum \| West Covina, California
Loss Contingencies [Line Items]
Possible loss	0.4
Maximum \| West Covina, California
Loss Contingencies [Line Items]
Possible loss	$ 3.1

Business Segment Information - Financial Information by Reportable Segment (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 01, 2017	Jul. 02, 2016	Jul. 01, 2017	Jul. 02, 2016
Segment Reporting Information [Line Items]
Net Revenues	$ 140,938	$ 133,437	$ 277,235	$ 275,585
Operating Income	6,471	7,266	10,571	11,559
Depreciation and Amortization Expenses	5,748	5,476	11,530	11,331
Capital Expenditures	9,258	4,947	15,879	7,348
Operating Segments
Segment Reporting Information [Line Items]
Operating Income	10,869	11,512	20,605	20,623
Operating Segments \| Structural Systems
Segment Reporting Information [Line Items]
Net Revenues	59,112	60,694	116,687	124,711
Operating Income	2,049	4,730	4,681	7,454
Depreciation and Amortization Expenses	2,307	1,775	4,659	3,832
Capital Expenditures	7,580	4,540	12,768	6,594
Operating Segments \| Electronic Systems
Segment Reporting Information [Line Items]
Net Revenues	81,826	72,743	160,548	150,874
Operating Income	8,820	6,782	15,924	13,169
Depreciation and Amortization Expenses	3,439	3,668	6,862	7,429
Capital Expenditures	1,030	407	2,463	754
Segment Reconciling Items
Segment Reporting Information [Line Items]
Corporate General and Administrative Expenses	(4,398)	(4,246)	(10,034)	(9,064)
Corporate Administration
Segment Reporting Information [Line Items]
Depreciation and Amortization Expenses	2	33	9	70
Capital Expenditures	$ 648	$ 0	$ 648	$ 0

Business Segment Information - Segment Assets (Detail) - USD ($) $ in Thousands	Jul. 01, 2017	Dec. 31, 2016
Segment Reporting Information [Line Items]
Total Assets	$ 535,772	$ 515,429
Total Goodwill and Intangibles	179,709	184,127
Operating Segments \| Structural Systems
Segment Reporting Information [Line Items]
Total Assets	203,297	175,580
Total Goodwill and Intangibles	3,290	3,745
Operating Segments \| Electronic Systems
Segment Reporting Information [Line Items]
Total Assets	318,243	325,780
Total Goodwill and Intangibles	176,419	180,382
Corporate Administration
Segment Reporting Information [Line Items]
Total Assets	$ 14,232	$ 14,069

Summary of Significant Accounting Policies - Additional Information (Details)	6 Months Ended
	Jul. 01, 2017 Segment
Accounting Policies [Abstract]
Number of reportable segments	2

Business Segment Information - Additional Information (Detail)	6 Months Ended
	Jul. 01, 2017 Segment
Segment Reporting [Abstract]
Number of reportable segments	2