dco-20220223
0000030305FALSE00000303052022-02-232022-02-23

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________________
FORM 8-K
____________________________
 
 CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 23, 2022
____________________________
DUCOMMUN INCORPORATED
(Exact name of registrant as specified in its charter)
____________________________
Delaware001-08174 95-0693330
(State or other jurisdiction
of incorporation)
(Commission
File Number)
 (IRS Employer
Identification No.)
200 Sandpointe Avenue, Suite 700 , Santa Ana, California
 92707-5759
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code (657335-3665
N/A
(Former name or former address, if changed since last report.)
____________________________ 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
 Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
 Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
 Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
 Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading Symbol(s)Name of each exchange on which registered
Common Stock, $.01 par value per share DCONew York Stock Exchange
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (240.12b-2 of this chapter).
Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the
Exchange Act.
¨





Item 2.02Results of Operations and Financial Condition.
Ducommun Incorporated issued a press release on February 23, 2022 in the form attached hereto as Exhibit 99.1.
 
Item 9.01Financial Statements and Exhibits.

(d) Exhibits

Exhibit No.Exhibit Title or Description
104Cover Page Interactive Data File (embedded within the Inline XBRL document).




SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
DUCOMMUN INCORPORATED
(Registrant)
Date: February 23, 2022
 By:/s/ Christopher D. Wampler
 Christopher D. Wampler
 Vice President, Chief Financial Officer, Controller and Treasurer


Document

EXHIBIT 99.1
https://cdn.kscope.io/f344832bddf893684e37a9b56f992fcb-dcoaddressonly2618a01a.jpg
https://cdn.kscope.io/f344832bddf893684e37a9b56f992fcb-dcologoonly2618a01a.jpg
NEWS RELEASE
Ducommun Reports Results for the
Fourth Quarter Ended December 31, 2021
Backlog Growth to $905 Million; Acquired Magnetic Seal;
Completed Sale-Leaseback Netting Over $110 Million in Proceeds; Record Diluted EPS of $9.05
SANTA ANA, California, February 23, 2022 – Ducommun Incorporated (NYSE: DCO) (“Ducommun” or the “Company”) today reported results for its fourth quarter and year ended December 31, 2021.
Fourth Quarter 2021 Recap

Revenue of $164.8 million
GAAP net income of $110.8 million, or $9.05 per diluted share
Adjusted net income for the quarter of $9.7 million, or $0.79 per diluted share
Gross margin increased 50 basis points year-over-year to 22.6%
Adjusted EBITDA of $24.4 million, or 14.8% of revenues, an increase of 40 basis points year-over-year
Completed the acquisition of Magnetic Seal LLC (“MagSeal”) for $69.5 million, net of cash acquired
Completed sale-leaseback, netting proceeds of over $110 million
“2021 was a return to growth story for Ducommun and I'm pleased with how much we accomplished along with positioning the Company for continued success in the years ahead,” said Stephen G. Oswald, chairman, president and chief executive officer. “In December alone, we netted over $110 million in after-tax proceeds related to the sale-leaseback of our Gardena, CA performance center building and land, effectively monetizing and unlocking its value at record prices to fuel growth and strengthen our balance sheet. A portion of the proceeds were immediately deployed for the MagSeal acquisition which brings innovative engineered sealing solutions to Ducommun, enhances our aerospace product portfolio and increases the Company's aftermarket capabilities and revenue.
“Ducommun ended the year with a strong backlog* as well of approximately $905 million, with gains driven by a recent uptick in commercial aerospace orders. For 2021, we posted revenues of approximately $645 million, led by another record year for military and space, topping $450 million, along with strong gross margins. In 2022, with growing travel demand and subsiding pandemic-related related restrictions, the commercial aerospace industry should continue its recovery especially in the narrow body market. Our longstanding customer relationships with Boeing, Raytheon, and other leading OEMs, along with our five year Airbus contract for titanium products awarded in 2021 are expected to drive stronger performance in 2022 and beyond.”
Fourth Quarter Results
Net revenue for the fourth quarter of 2021 was $164.8 million, compared to $157.8 million for the fourth quarter of 2020. The 4.5% increase year-over-year was primarily due to the following:
$4.9 million higher revenue within the Company’s Industrial end-use markets due to timing of customer requirements; and
$4.4 million higher revenue within the Company’s commercial aerospace end-use markets due to higher build rates on other commercial aerospace platforms and regional and business aircraft platforms; partially offset by



$2.3 million lower revenue within the Company’s military and space end-use markets due to lower build rates on military rotary-wing aircraft platforms.
Net income for the fourth quarter of 2021 was $110.8 million, or $9.05 per diluted share, compared to $9.7 million, or $0.80 per diluted share, for the fourth quarter of 2020. The increase in net income year-over-year was due to the gain on the Gardena performance center sale-leaseback transaction of $132.5 million and a $2.5 million increase in gross profit due to higher revenue, partially offset by higher income tax expense of $31.4 million and higher SG&A expense of $2.9 million. Adjusted net income was $9.7 million, or $0.79 per diluted share, for the fourth quarter of 2021, compared to $10.8 million, or $0.89 per diluted share, for the fourth quarter of 2020. The difference between net income and adjusted net income was primarily due to excluding the gain on sale-leaseback.
Gross profit for the fourth quarter of 2021 was $37.3 million, or 22.6% of revenue, compared to gross profit of $34.8 million, or 22.1% of revenue, for the fourth quarter of 2020. The increase in gross margin percentage year-over-year was due to favorable product mix, favorable manufacturing volume, and lower other manufacturing costs, partially offset by higher compensation and benefits costs.
Operating income for the fourth quarter of 2021 was $11.8 million, or 7.2% of revenue, compared to $11.6 million, or 7.3% of revenue, in the comparable period last year. The year-over-year increase was due to higher revenue, partially offset by higher SG&A expenses. Adjusted operating income for the fourth quarter of 2021 was $14.0 million, or 8.5%, compared to $12.9 million, or 8.2% of revenue, in the comparable period last year.
Interest expense for the fourth quarter of 2021 was $2.8 million compared to $2.6 million in the comparable period of 2020.
Adjusted EBITDA for the fourth quarter of 2021 was $24.4 million, or 14.8% of revenue, compared to $22.8 million, or 14.4% of revenue, for the comparable period in 2020.
* The Company defines backlog as potential revenue and is based on customer placed purchase orders and long-term agreements (“LTAs”) with firm fixed price and expected delivery dates of 24 months or less. Backlog as of December 31, 2021 was $905.2 million compared to $807.7 million as of December 31, 2020. Under ASC 606, the Company defines performance obligations as customer placed purchase orders with firm fixed price and firm delivery dates. The remaining performance obligations disclosed under ASC 606 as of December 31, 2021 were $814.1 million compared to $779.7 million as of December 31, 2020.
Business Segment Information
Electronic Systems
Electronic Systems reported net revenue for the current quarter of $106.0 million, compared to $99.1 million for the fourth quarter of 2020. The year-over-year increase was primarily due to the following:
$4.9 million higher revenue within the Company’s Industrial end-use markets due to timing of customer requirements; and
$2.9 million higher revenue within the Company’s commercial aerospace end-use markets due higher build rates on other commercial aerospace platforms; partially offset by
$0.9 million lower revenue within the Company’s military and space end-use markets due to lower build rates on various missile platforms, partially offset by higher build rates on military fixed-wing aircraft platforms.
Electronic Systems operating income for the current year fourth quarter was $15.4 million, or 14.6% of revenue, compared to $11.5 million, or 11.6% of revenue, for the comparable quarter in 2020. The year-over-year increase was due to favorable product mix and favorable manufacturing volume, partially offset by higher compensation and benefits costs.
Structural Systems
Structural Systems reported net revenue for the current quarter of $58.8 million, compared to $58.7 million for the fourth quarter of 2020. The year-over-year increase was primarily due to the following:
$1.5 million higher revenue within the Company’s commercial aerospace end-use markets due to higher build rates on regional and business aircraft platforms; partially offset by



$1.4 million lower revenue within the Company’s military and space end-use markets due to lower build rates on military rotary-wing aircraft platforms, partially offset by higher build rates on other military and space platforms.
Structural Systems operating income for the current-year fourth quarter was $5.1 million, or 8.6% of revenue, compared to $6.2 million, or 10.6% of revenue, for the fourth quarter of 2020. The year-over-year decrease was due to unfavorable product mix, partially offset by lower other manufacturing costs.
Corporate General and Administrative (“CG&A”) Expense
CG&A expense for the fourth quarter of 2021 was $8.7 million, or 5.3% of total Company revenue, compared to $6.1 million, or 3.9% of total Company revenue, in the comparable quarter in the prior year. The year-over-year increase was due to higher professional services fees of $1.8 million, a portion of which was related to the Magnetic Seal LLC acquisition, and higher compensation and benefits costs of $0.8 million.
Conference Call
A teleconference hosted by Stephen G. Oswald, the Company’s chairman, president, and chief executive officer, and Christopher D. Wampler, the Company’s vice president, chief financial officer, controller and treasurer will be held today, February 23, 2022, at 2:00 p.m. PT (5:00 p.m. ET) to review these financial results. To participate in the teleconference, please call 844-239-5278 (international 574-990-1017) approximately ten minutes prior to the conference time. The participant passcode is 1660427. Mr. Oswald and Mr. Wampler will be speaking on behalf of the Company and anticipate the call (including Q&A) to last approximately 45 minutes. This call is also being webcast and can be accessed at the Ducommun website at Ducommun.com.
About Ducommun Incorporated
Ducommun Incorporated delivers value-added innovative, value-added proprietary products and manufacturing solutions to customers in the aerospace, defense and industrial markets. Founded in 1849, the Company specializes in two core areas - Electronic Systems and Structural Systems - to produce complex products and components for commercial aircraft platforms, mission-critical military and space programs, and sophisticated industrial applications. For more information, visit Ducommun.com.
Forward Looking Statements
This press release and any attachments include “forward-looking statements,” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including, in particular, any statements about the Company’s plans, strategies, prospects, growth and outlook for 2022 and beyond, as well as future demand for the Company's products from commercial aerospace end-use markets and relationships with its customers. The Company generally uses the words “may,” “will,” “could,” “should,” “expect,” “anticipate,” “believe,” “estimate,” “plan,” “intend,” “continue” and similar expressions in this press release and any attachments to identify forward-looking statements. The Company bases these forward-looking statements on its current views with respect to future events and financial performance. Actual results could differ materially from those projected in the forward-looking statements. These forward-looking statements are subject to risks, uncertainties and assumptions, including, among other things: whether the anticipated pre-tax restructuring charges will be sufficient to address all anticipated restructuring costs, including related to employee separation, facilities consolidation, inventory write-down and other asset impairments; whether the expected cost savings from the restructuring will ultimately be obtained in the amount and during the period anticipated; whether the restructuring in the affected areas will be sufficient to build a more cost efficient, focused, higher margin enterprise with higher returns for the Company's shareholders; the impact of the Company’s debt service obligations and restrictive debt covenants; the cyclicality of the Company’s end-use markets; the Company's dependence upon a selected base of industries and customers; a significant portion of the Company’s business being dependent upon U.S. Government defense spending; the Company being subject to extensive regulation and audit by the Defense Contract Audit Agency; some of the Company’s contracts with customers containing provisions which give the its customers a variety of rights that are unfavorable to the Company; further consolidation in the aerospace industry adversely affecting the Company’s business and financial results; the Company’s ability to successfully make acquisitions, including its ability to successfully integrate, operate or realize the projected benefits of such businesses; the Company's reliance on its suppliers to meet the quality and delivery expectations of its customers; the Company's use of estimates when bidding on fixed-price contracts which estimates could change and result in adverse effects on its financial results; the impact of existing and future laws and regulations such as the Cybersecurity Maturity Model Certification applicable to government contracts and sub-contracts, and environmental, social and



governance requirements; the impact of existing and future accounting standards and tax rules and regulations; environmental liabilities adversely affecting the Company’s financial results; cyber security attacks, internal system or service failures, which may adversely impact the Company’s business and operations; the ultimate geographic spread, duration and severity of the coronavirus (COVID-19) outbreak, and the effectiveness of actions taken, or actions that may be taken, by governmental authorities to contain the outbreak or treat its impact and facilitate commercial aerospace end-use markets' recovery from those impacts, and other risks and uncertainties, including those detailed from time to time in the Company’s periodic reports filed with the Securities and Exchange Commission. You should not put undue reliance on any forward-looking statements. You should understand that many important factors, including those discussed herein, could cause the Company’s results to differ materially from those expressed or suggested in any forward-looking statement. Except as required by law, the Company does not undertake any obligation to update or revise these forward-looking statements to reflect new information or events or circumstances that occur after the date of this news release, February 23, 2022, or to reflect the occurrence of unanticipated events or otherwise. Readers are advised to review the Company’s filings with the Securities and Exchange Commission (which are available from the SEC’s EDGAR database at www.sec.gov).
Note Regarding Non-GAAP Financial Information
This release contains non-GAAP financial measures, including Adjusted EBITDA (which excludes interest expense, income tax expense, depreciation, amortization, stock-based compensation expense, Guaymas fire related expenses, gain on sale-leaseback, success bonus related to completion of sale-leaseback transaction, inventory purchase accounting adjustments, and restructuring charges), non-GAAP operating income and as a percentage of net revenues, non-GAAP earnings, and non-GAAP earnings per share. In addition, certain prior period amounts have been reclassified to conform to current year’s presentation.
The Company believes the presentation of these non-GAAP measures provide important supplemental information to management and investors regarding financial and business trends relating to its financial condition and results of operations. The Company’s management uses these non-GAAP financial measures along with the most directly comparable GAAP financial measures in evaluating the Company’s actual and forecasted operating performance, capital resources and cash flow. The non-GAAP financial information presented herein should be considered supplemental to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. The Company discloses different non-GAAP financial measures in order to provide greater transparency and to help the Company’s investors to more meaningfully evaluate and compare Ducommun’s results to its previously reported results. The non-GAAP financial measures that the Company uses may not be comparable to similarly titled financial measures used by other companies. We define backlog as potential revenue and is based on customer placed purchase orders and long-term agreements (“LTAs”) with firm fixed price and expected delivery dates of 24 months or less. The majority of the LTAs do not meet the definition of a contract under ASC 606 and thus, the backlog amount disclosed herein is greater than the remaining performance obligations disclosed under ASC 606. Backlog is subject to delivery delays or program cancellations, which are beyond our control. Backlog is affected by timing differences in the placement of customer orders and tends to be concentrated in several programs to a greater extent than our net revenues. Backlog in industrial markets tends to be of a shorter duration and is generally fulfilled within a three month period. As a result of these factors, trends in our overall level of backlog may not be indicative of trends in our future net revenues.
CONTACT:
Suman Mookerji, Vice President, Corporate Development and Investor Relations, 657.335.3665
[Financial Tables Follow]




DUCOMMUN INCORPORATED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars In thousands)
 
December 31,
2021
December 31,
2020
Assets
Current Assets
Cash and cash equivalents$76,316 $56,466 
Accounts receivable, net72,261 58,025 
Contract assets176,405 154,028 
Inventories150,938 129,223 
Production cost of contracts8,024 6,971 
Other current assets8,625 5,571 
Total Current Assets492,569 410,284 
Property and Equipment, Net102,419 109,990 
Operating lease right-of-use assets33,265 16,348 
Goodwill203,694 170,830 
Intangibles, Net141,764 124,744 
Deferred Income Taxes— 33 
Other Assets5,024 5,118 
Total Assets$978,735 $837,347 
Liabilities and Shareholders’ Equity
Current Liabilities
Accounts payable$66,059 $63,980 
Contract liabilities42,077 28,264 
Accrued and other liabilities41,291 40,526 
Operating lease liabilities6,133 3,132 
Current portion of long-term debt7,000 7,000 
Total Current Liabilities162,560 142,902 
Long-Term Debt, Less Current Portion279,384 311,922 
Non-Current Operating Lease Liabilities28,074 14,555 
Deferred Income Taxes18,727 16,992 
Other Long-Term Liabilities15,388 21,642 
Total Liabilities504,133 508,013 
Commitments and Contingencies
Shareholders’ Equity
Common stock119 117 
Additional paid-in capital104,253 97,090 
Retained earnings377,263 241,727 
Accumulated other comprehensive loss(7,033)(9,600)
Total Shareholders’ Equity474,602 329,334 
Total Liabilities and Shareholders’ Equity$978,735 $837,347 




DUCOMMUN INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Quarterly Information Unaudited)
(Dollars in thousands, except per share amounts)
 
 Three Months EndedYears Ended
 December 31,
2021
December 31,
2020
December 31,
2021
December 31,
2020
Net Revenues$164,843 $157,786 $645,413 $628,941 
Cost of Sales127,580 122,985 502,953 491,203 
Gross Profit37,263 34,801 142,460 137,738 
Selling, General and Administrative Expenses25,447 22,555 93,579 89,808 
Restructuring Charges— 656 — 2,424 
Operating Income11,816 11,590 48,881 45,506 
Interest Expense(2,754)(2,585)(11,187)(13,653)
Gain on Sale-Leaseback132,522 — 132,522 — 
Other Income, Net72 29 268 128 
Income Before Taxes141,656 9,034 170,484 31,981 
Income Tax Expense (Benefit)30,822 (619)34,948 2,807 
Net Income$110,834 $9,653 $135,536 $29,174 
Earnings Per Share
Basic earnings per share$9.29 $0.82 $11.41 $2.50 
Diluted earnings per share$9.05 $0.80 $11.06 $2.45 
Weighted-Average Number of Common Shares Outstanding
Basic11,931 11,720 11,879 11,676 
Diluted12,248 12,070 12,251 11,932 
Gross Profit %22.6 %22.1 %22.1 %21.9 %
SG&A %15.4 %14.3 %14.5 %14.3 %
Operating Income %7.2 %7.3 %7.6 %7.2 %
Net Income %67.2 %6.1 %21.0 %4.6 %
Effective Tax Rate (Benefit)21.8 %(6.9)%20.5 %8.8 %




DUCOMMUN INCORPORATED AND SUBSIDIARIES
BUSINESS SEGMENT PERFORMANCE
(Unaudited)
(Dollars in thousands)
 Three Months EndedYears Ended
 %
Change
December 31, 2021December 31, 2020% of Net  Revenues
2021
% of Net  Revenues
2020
%
Change
December 31, 2021December 31, 2020% of Net  Revenues
2021
% of Net  Revenues
2020
Net Revenues
Electronic Systems7.0 %$106,026 $99,093 64.3 %62.8 %5.1 %$412,648 $392,633 63.9 %62.4 %
Structural Systems0.2 %58,817 58,693 35.7 %37.2 %(1.5)%232,765 236,308 36.1 %37.6 %
Total Net Revenues4.5 %$164,843 $157,786 100.0 %100.0 %2.6 %$645,413 $628,941 100.0 %100.0 %
Segment Operating Income
Electronic Systems$15,444 $11,467 14.6 %11.6 %$57,629 $51,894 14.0 %13.2 %
Structural Systems5,057 6,211 8.6 %10.6 %20,234 19,584 8.7 %8.3 %
20,501 17,678 77,863 71,478 
Corporate General and Administrative Expenses (1)
(8,685)(6,088)(5.3)%(3.9)%(28,982)(25,972)(4.5)%(4.1)%
Total Operating Income$11,816 $11,590 7.2 %7.3 %$48,881 $45,506 7.6 %7.2 %
Adjusted EBITDA
Electronic Systems
Operating Income
$15,444 $11,467 $57,629 $51,894 
Other Income
— — 196 — 
Depreciation and Amortization
3,427 3,447 13,823 14,038 
Restructuring Charges
— 264 — 596 
Success bonus related to completion of sale-leaseback transaction (2)970 — 970 — 
19,841 15,178 18.7 %15.3 %72,618 66,528 17.6 %16.9 %
Structural Systems
Operating Income
5,057 6,211 20,234 19,584 
Other Income
72 — 72 — 
Depreciation and Amortization
3,791 3,603 14,331 14,559 
Restructuring Charges
— 392 — 1,828 
Inventory Purchase Accounting Adjustments
106 — 106 — 
Guaymas Fire Related Expenses615 682 2,486 1,704 
Success bonus related to completion of sale-leaseback transaction (2)475 — 475 — 
10,116 10,888 17.2 %18.6 %37,704 37,675 16.2 %15.9 %
Corporate General and Administrative Expenses (1)
Operating loss
(8,685)(6,088)(28,982)(25,972)
Other Income
29 — 128 
Depreciation and Amortization
59 59 235 253 
Stock-Based Compensation Expense
3,063 2,694 11,212 9,299 
Success bonus related to completion of sale-leaseback transaction (2)— — 
(5,557)(3,306)(17,529)(16,292)



Adjusted EBITDA
$24,400 $22,760 14.8 %14.4 %$92,793 $87,911 14.4 %14.0 %
Capital Expenditures
Electronic Systems$3,606 $1,519 $7,471 $5,037 
Structural Systems2,309 4,170 8,463 8,570 
Corporate Administration— — — — 
Total Capital Expenditures$5,915 $5,689 $15,934 $13,607 
(1)Includes costs not allocated to either the Electronic Systems or Structural Systems operating segments.
(2)2021 Includes $1.3 million of success bonus related to completion of sale-leaseback transaction that was recorded as part of cost of sales.



DUCOMMUN INCORPORATED AND SUBSIDIARIES
GAAP TO NON-GAAP OPERATING INCOME AND AS A PERCENTAGE OF NET REVENUES RECONCILIATION
(Unaudited)
(Dollars in thousands)
 
 Three Months EndedYears Ended
GAAP To Non-GAAP Operating IncomeDecember 31,
2021
December 31,
2020
%
of Net  Revenues
2021
%
of Net  Revenues
2020
December 31,
2021
December 31,
2020
%
of Net  Revenues
2021
%
of Net  Revenues
2020
GAAP Operating income$11,816 $11,590 $48,881 $45,506 
GAAP Operating income - Electronic Systems$15,444 $11,467 $57,629 $51,894 
Adjustments:
Restructuring charges— 264 — 596 
Success bonus related to completion of sale-leaseback transaction970 — 970 — 
Adjusted operating income - Electronic Systems16,414 11,731 15.5 %11.8 %58,599 52,490 14.2 %13.4 %
GAAP Operating income - Structural Systems5,057 6,211 20,234 19,584 
Adjustments:
Restructuring charges— 392 — 1,828 
Inventory purchase accounting adjustments106 — 106 — 
Guaymas fire related expenses615 682 2,486 1,704 
Success bonus related to completion of sale-leaseback transaction475 — 475 — 
Adjusted operating income - Structural Systems6,253 7,285 10.6 %12.4 %23,301 23,116 10.0 %9.8 %
GAAP Operating loss - Corporate(8,685)(6,088)(28,982)(25,972)
Adjustment:
Success bonus related to completion of sale-leaseback transaction— — 
Adjusted operating loss - Corporate(8,679)(6,088)(28,976)(25,972)
Total adjustments2,172 1,338 4,043 4,128 
Adjusted operating income$13,988 $12,928 8.5 %8.2 %$52,924 $49,634 8.2 %7.9 %




DUCOMMUN INCORPORATED AND SUBSIDIARIES
GAAP TO NON-GAAP EARNINGS AND EARNINGS PER SHARE RECONCILIATION
(Unaudited)
(Dollars in thousands, except per share amounts)
 
 Three Months EndedYears Ended
GAAP To Non-GAAP EarningsDecember 31,
2021
December 31,
2020
December 31,
2021
December 31,
2020
GAAP Net income$110,834 $9,653 $135,536 $29,174 
  Adjustments:
Guaymas fire related expenses (1)(2)
492 573 1,989 1,431 
Inventory purchase accounting adjustments (1)
85 — 85 — 
Gain on sale-leaseback (1)
(102,837)— (102,837)— 
Success bonus related to completion of sale-leaseback transaction (1)
1,161 — 1,161 — 
Restructuring charges (2)
— 551 — 2,036 
      Total adjustments(101,099)1,124 (99,602)3,467 
Adjusted net income$9,735 $10,777 $35,934 $32,641 

 Three Months EndedYears Ended
GAAP Earnings Per Share To Non-GAAP Earnings Per ShareDecember 31,
2021
December 31,
2020
December 31,
2021
December 31,
2020
GAAP Diluted Earnings Per Share (“EPS”)$9.05 $0.80 $11.06 $2.45 
  Adjustments:
Guaymas fire related expenses (1)(2)
0.04 0.05 0.16 0.12 
Inventory purchase accounting adjustments (1)
0.01 — 0.01 — 
Gain on sale-leaseback (1)
(8.40)— (8.39)— 
Success bonus related to completion of sale-leaseback transaction (1)
0.09 — 0.09 — 
Restructuring charges (2)
— 0.04 — 0.17 
      Total adjustments(8.26)0.09 (8.13)0.29 
Adjusted Diluted EPS$0.79 $0.89 $2.93 $2.74 
Shares used for adjusted diluted EPS12,248 12,070 12,251 11,932 
(1)Includes tax rate of 20.0% for 2021 adjustments, except for gain on sale-leaseback which utilized the incremental tax rate of 22.4%.
(2)Includes tax rate of 16.0% for 2020 adjustments.




DUCOMMUN INCORPORATED AND SUBSIDIARIES
NON-GAAP BACKLOG* BY REPORTING SEGMENT
(Unaudited)
(Dollars in thousands)
 
(In thousands)
December 31,
2021
December 31,
2020
Consolidated Ducommun
Military and space$520,278 $515,396 
Commercial aerospace333,107 268,326 
Industrial51,802 24,019 
Total$905,187 $807,741 
Electronic Systems
Military and space$400,002 $389,877 
Commercial aerospace56,810 56,719 
Industrial51,802 24,019 
Total$508,614 $470,615 
Structural Systems
Military and space$120,276 $125,519 
Commercial aerospace276,297 211,607 
Total$396,573 $337,126 
* The Company defines backlog as potential revenue and is based on customer placed purchase orders and long-term agreements (“LTAs”) with firm fixed price and expected delivery dates of 24 months or less. Backlog as of as of December 31, 2021 was $905.2 million compared to $807.7 million as of December 31, 2020. Under ASC 606, the Company defines performance obligations as customer placed purchase orders with firm fixed price and firm delivery dates. The remaining performance obligations disclosed under ASC 606 as of December 31, 2021 were $814.1 million compared to $779.7 million as of December 31, 2020.