Ducommun Inc. (DCO) filed Quarterly Report for the period ended 2009-10-03.
Ducommun Incorporated manufactures components and assemblies principally for domestic and foreign commercial and military aircraft and space programs. Ducommun is a subcontractor to Lockheed Martin on the Space Shuttle external tank and a supplier of components for the Space Shuttle as well as for the International Space Station. Ducommun Inc. has a market cap of $177.84 million; its shares were traded at around $17.02 with a P/E ratio of 8.91 and P/S ratio of 0.44. The dividend yield of Ducommun Inc. stocks is 1.76%. Ducommun Inc. had an annual average earning growth of 7.7% over the past 5 years.
Highlight of Business Operations:
Net sales in the third quarter of 2009 were $109,903,000, compared to net sales in the third quarter 2008 of $100,856,000. Net sales in the third quarter of 2009 increased $9,047,000 from the same period last year due to sales of $11,100,000 from DAS-New York, which was acquired in December 2008. The Company’s mix of business in the third quarter of 2009 was approximately 65% military, 33% commercial, and 2% space, compared to 56% military, 41% commercial, and 3% space in the third quarter of 2008.
Net income was $6,190,000, or $0.59 diluted earnings per share, in the third quarter of 2009 compared to $6,264,000, or $0.59 diluted earnings per share, in the third quarter of 2008.
Net income was $13,384,000, or $1.27 diluted earnings per share, in the nine months of 2009, compared to $17,347,000, or $1.63 diluted earnings per share, in the nine months of 2008. Net income for the nine months of 2009 included an after-tax charge of $3,444,000, or $0.33 per diluted share for the Eclipse inventory reserve and inventory valuation adjustment discussed above.
Net cash used in operating activities for the nine months of 2009 was $8,646,000, compared to net cash provided by operating activities of $253,000 in 2008. Net cash used in operating activities for the nine months of 2009 resulted principally from a decrease in accrued and other liabilities of $17,269,000 (consisting primarily of a $9,887,000 decrease in customer deposits, a $5,307,000 decrease in accrued bonuses and incentives, a $1,162,000 decrease in deferred compensation and a $913,000 decrease in other accrued liabilities), an increase in accounts and unbilled receivables of $7,433,000 primarily related to the timing of billings to customers and extension of payments by the customers, and an increase in inventory of $6,809,000 primarily related to work-in-process for production jobs scheduled to be shipped in 2009 and 2010.
Net cash provided by financing activities for the nine months of 2009 of $11,891,000 included approximately $16,658,000 of net borrowings of debt, partially offset by $2,358,000 of cash dividends paid, $1,410,000 of debt issue cost paid, $938,000 paid for repurchase of stock and $61,000 paid relating to the exercise of stock options.
The Company is a party to a Second Amended and Restated Credit Agreement with Bank of America, N.A., as Administrative Agent, Wells Fargo Bank, National Association, as Syndication Agent, Union Bank, N.A., as Documentation Agent and the other lenders named therein dated June 26, 2009 (the “Credit Agreement”). The Credit Agreement provides for an unsecured revolving credit line of $120,000,000 maturing on June 30, 2014. Interest is payable quarterly on the outstanding borrowings at Bank of America’s prime rate (3.25% at October 3, 2009) plus a spread (1.5% to 2.0% per annum based on the leverage ratio of the Company) or, at the election of the Company, for terms of up to six months at the LIBOR rate (0.25% at October 3, 2009 for one month LIBOR) plus a spread (2.5% to 3.0% per annum depending on the leverage ratio of the Company). The Credit Agreement includes minimum fixed charge coverage, maximum leverage and minimum net worth covenants, an unused commitment fee (0.50% to 0.60% per annum depending on the leverage ratio of the Company), and limitations on future dispositions of property, repurchases of common stock, dividends, outside indebtedness, and acquisitions. At October 3, 2009, the Company had $80,044,000 of unused lines of credit, after deducting $856,000 for outstanding standby letters of credit. The Company had outstanding loans of $39,100,000 and was in compliance with all covenants at October 3, 2009.
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