Ducommun Posts Record $227M Q3 Revenue; Gross Margin Hits 28.9%

Costa Mesa, California-based aerospace and defense supplier Ducommun Incorporated reported record third-quarter net revenue of $227.0 million, up 6% from $214.4 million a year earlier, according to results the company furnished to the Securities and Exchange Commission on Thursday.

• Net revenue: $227.0 million, up 6% year over year
• Gross margin: 28.9%, a company record, up 140 basis points
• Net income: $13.9 million, or $0.89 per diluted share, vs. a year-earlier net loss of $60.8 million
• Non-GAAP adjusted net income: $18.8 million, or $1.21 per diluted share
• Adjusted EBITDA: $39.7 million, or 17.5% of revenue, up 6%
• Remaining performance obligations: a record $1.3 billion

Yahoo Finance, citing Zacks Equity Research, said the $1.21 adjusted earnings beat a $1.06 consensus estimate and that revenue topped estimates by about 2.8%.

Commercial aerospace lifts sales

Commercial aerospace revenue rose $21.1 million year over year, helped by higher rates on large aircraft, business jets and rotary-wing platforms, Ducommun said. The company pointed to single-aisle work tied to the Boeing 737 MAX and Airbus A320 as drivers of a 28% year-over-year jump in that part of the business.

Military and space revenue fell $9.2 million, which Ducommun attributed to timing on ground vehicles, Black Hawk and Apache helicopters and some radar programs, partly offset by growth on missiles including Tomahawk, MIR and TOW and on fixed-wing aircraft such as the F-15.

Bookings and cash

Bookings totaled $354.3 million in the quarter, for a book-to-bill ratio of 1.6 times, with defense bookings at 2.2 times, according to the release. Operating cash flow was $32.7 million, up from $18.1 million a year earlier.

Electronic Systems segment revenue was $129.6 million with operating income of $28.7 million. Structural Systems revenue was $97.4 million with operating income of $11.9 million.

Chairman, President and CEO Stephen G. Oswald said the company continued progress toward its VISION 2027 targets and its longer-term VISION 2032 plan, which includes an annual revenue goal of $1.6 billion to $1.7 billion and a 23% adjusted EBITDA margin target.

Sources: Ducommun Exhibit 99.1 (SEC), Ducommun Form 8-K (SEC), Yahoo Finance / Zacks