Ducommun Inc (DCO) Reports Record Quarterly Revenue and Adjusted Operating Income
Record quarterly revenue of $196.3 million, up 5% year-over-year.
Adjusted EBITDA reached an all-time high at 14.9% of revenue.
Net income reported at $3.2 million, or $0.22 per diluted share.
Adjusted net income stood at $10.3 million, or $0.70 per diluted share.
On November 8, 2023, Ducommun Inc (NYSE:DCO) announced its financial results for the third quarter ended September 30, 2023, showcasing a period of significant growth and financial achievement. The company reported an all-time high quarterly revenue of $196.3 million, a 5.2% increase compared to the third quarter of 2022. This growth was driven by a 14% year-over-year increase in Commercial Aerospace revenues and a resurgence in the defense business.
Financial Highlights and Performance
Ducommun's net income for the quarter was $3.2 million, or $0.22 per diluted share, a decrease from the $8.5 million, or $0.69 per diluted share, reported in the same period last year. The decline was attributed to higher selling, general and administrative expenses, restructuring charges, and interest expenses. Adjusted net income, however, was $10.3 million, or $0.70 per diluted share, reflecting the company's strong operational performance.
Gross profit for the quarter increased to $44.6 million, or 22.7% of revenue, compared to $38.6 million, or 20.7% of revenue, in the third quarter of 2022. This improvement was primarily due to favorable product mix, pricing actions, and favorable manufacturing volume. Adjusted EBITDA for the quarter reached $29.3 million, or 14.9% of revenue, compared to $26.0 million, or 13.9% of revenue, for the same period in 2022.
Segment Performance
The Electronic Systems segment saw a slight decrease in net revenue, while the Structural Systems segment reported a significant increase of 16.9% year-over-year. The Corporate General and Administrative expenses increased to $10.8 million, or 5.5% of total company revenue, primarily due to higher stock-based compensation expense.
Cash Flow and Balance Sheet
Ducommun generated $14.3 million in net cash from operations during the third quarter of 2023, a substantial improvement from the net cash used in operations of $5.5 million during the same period in 2022. The company's balance sheet showed a total asset value of $1,142.3 million as of September 30, 2023, with a shareholders' equity of $635.4 million.
Management's Perspective
Stephen G. Oswald, chairman, president, and chief executive officer of Ducommun, expressed satisfaction with the company's performance, stating,
Q3 was an outstanding quarter for Ducommun, the best in many years as we grew our topline both year-over-year and sequentially, led by continued strength in Commercial Aerospace and a return to growth of our defense business while also delivering strong margin expansion in gross and Adjusted EBITDA margins."
He also highlighted the progress towards the Vision 2027 Plan and the positive catalysts within the company that will drive shareholder value in the future.
For more detailed information on Ducommun's financial results, investors and interested parties can access the Q3 2023 Earnings Presentation on the company's website at Ducommun.com.
Forward-Looking Statements and Non-GAAP Measures
The earnings release contains forward-looking statements regarding expectations for restructuring initiatives, operating performance improvement, and strategy execution. It also includes non-GAAP financial measures such as Adjusted EBITDA and adjusted net income, which the company believes provide valuable insights into its financial condition and results of operations.
For a comprehensive understanding of Ducommun's financial performance, including reconciliations of GAAP to non-GAAP operating income, earnings, and earnings per share, readers are encouraged to review the full financial tables and disclosures provided in the earnings release.
Investors are reminded that forward-looking statements are subject to various risks and uncertainties, and actual results may differ materially. Ducommun does not undertake any obligation to update or revise forward-looking statements beyond the date of the news release.
For further details and to stay updated on Ducommun's financial developments, please visit GuruFocus.com.
Explore the complete 8-K earnings release (here) from Ducommun Inc for further details.
This article first appeared on GuruFocus.
