Group 1 - Ducommun Incorporated will participate in the 8th Annual B. Riley Consumer & TMT Conference on September 10, 2025, with one-on-one investor meetings scheduled throughout the day [1] - Institutional investors are encouraged to contact B. Riley to arrange meetings with Ducommun's management [1] Group 2 - Ducommun Incorporated specializes in delivering value-added innovative products and manufacturing solutions in the aerospace, defense, and industrial markets [2] - The company focuses on two core areas: Electronic Systems and Structural Systems, producing complex products and components for commercial aircraft, military and space programs, and industrial applications [2]

Company Performance - Ducommun (DCO) has returned 47.5% year-to-date, significantly outperforming the average return of 24.8% for Aerospace companies [4] - The Zacks Consensus Estimate for Ducommun's full-year earnings has increased by 2.3% over the past quarter, indicating an improving earnings outlook [3] - Ducommun is currently ranked 2 (Buy) in the Zacks Rank system, which emphasizes earnings estimates and revisions [3] Industry Context - Ducommun belongs to the Aerospace - Defense Equipment industry, which consists of 33 companies and currently ranks 78 in the Zacks Industry Rank [6] - The average return for stocks in the Aerospace - Defense Equipment industry this year is 23.7%, showing that Ducommun is performing better than its peers in this specific industry [6] - Rolls-Royce Holdings PLC, another stock in the Aerospace sector, has achieved a year-to-date return of 100.2% and also holds a Zacks Rank of 2 (Buy) [4][5]

Core Insights - Gabelli Funds, LLC is hosting the annual Aerospace & Defense Symposium on September 4, 2025, at The Harvard Club in New York City, focusing on strong demand outlook and high barriers to entry in the Aerospace and Defense industry [1] - The symposium will feature top executives from over ten companies, discussing themes such as defense spending, aftermarket opportunities, and M&A potential [1] Agenda Highlights - The event will start at 7:30 AM with a welcome and introduction by the Gabelli Funds Team [2] - Notable companies participating include Astronics Corporation, Textron Inc., Moog Inc., HEICO Corporation, and Elbit Systems Ltd., among others, with scheduled presentations throughout the day [2][3] - The agenda includes one-on-one meetings with management, providing attendees with networking opportunities [1]

Investment Philosophy - The investment approach is based on fundamental analysis, focusing on companies with a strong competitive moat, consistent growth in free cash flow, and robust financial performance [1] - The philosophy emphasizes long-term investing over short-term trading tactics, believing in the power of long-term strategies to unlock value [1] Market Engagement - The aim is to explore a wide array of topics relevant to investors, including uncovering undervalued stocks poised for growth and identifying overvalued stocks [1] - Writing for Seeking Alpha is viewed as a contribution to a community that values deep, analytical insights into the market [1] Professional Background - The analyst has a university degree specializing in business and economics, providing a solid foundation for investment analysis [1] - Currently working in a local brokerage firm, the analyst leverages years of investing experience in the financial markets [1]

Group 1 - Gabelli Funds, LLC is hosting the annual Aerospace & Defense Symposium on September 4, 2025, at The Harvard Club in New York City, focusing on strong demand outlook and high barriers to entry in the industry [1] - The symposium will feature top executives from over ten companies, discussing themes such as large aftermarket opportunities, growth exceeding GDP, defense spending, and M&A potential [1] - Attendees will have the opportunity for one-on-one meetings with management, enhancing networking and investment insights [1] Group 2 - Featured companies at the symposium include AIRO Group Holdings, Elbit Systems, Albany International, Graham Corporation, and several others, indicating a diverse representation within the Aerospace and Defense sector [2] - The event is set to start at 8:30 am, providing a structured schedule for discussions and networking [3]

Financial Data and Key Metrics Changes - Revenue for Q2 2025 reached a record $202.3 million, a 2.7% increase from $197 million in Q2 2024, marking the seventeenth consecutive quarter of year-over-year revenue growth [10][25][30] - Gross profit was $53.7 million, representing a gross margin of 26.6%, up from 26% in the prior year [26][30] - Adjusted EBITDA reached a record $32.4 million, or 16% of revenue, up from 15.2% in the prior year [15][30] - GAAP diluted EPS was $0.82, compared to $0.52 in Q2 2024, while adjusted diluted EPS was $0.88, up from $0.83 [16][30] Business Line Data and Key Metrics Changes - The defense business grew by 16% in Q2, driven by a 39% increase in the missile franchise and a 46% increase in the radar business [10][11][12] - Commercial aerospace revenue declined by 10% to $78 million, primarily due to lower production rates on Boeing platforms [13][22] - The industrial business saw a 23% decline in revenue to $8 million as the company pruned non-core operations [23] Market Data and Key Metrics Changes - Military and space sector revenues increased to $117 million from $101 million in Q2 2024, driven by missile programs and military rotorcraft [21][30] - The consolidated backlog was $1.02 billion, down $50 million year-over-year, with defense backlog flat at $593 million [17][30] - Commercial aerospace backlog decreased by $47 million due to lower OEM production rates [17][22] Company Strategy and Development Direction - The company is executing its Vision 2027 strategy, aiming to increase the revenue percentage from engineered products to 25% [9][18] - Focus on consolidating operations and enhancing the engineered product portfolio, which currently contributes 23% of total revenue [9][18][25] - The company is actively pursuing acquisitions and strategic pricing initiatives to drive growth [9][60] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the defense business outlook, citing strong order activity and upcoming product launches [11][19] - The company anticipates mid-single-digit growth in Q3 and low double-digit growth in Q4, driven by defense and a recovery in commercial aerospace [19][40] - Management noted that tariffs are expected to have limited impact on revenues, with 95% of revenue generated in the U.S. [20][27] Other Important Information - The company has ceased operations in Monrovia, California, and Berryville, Arkansas, to consolidate facilities and expects to see cost savings from these actions [14][34] - Cash flow from operating activities improved significantly to $22.4 million in Q2 2025, compared to $3.5 million in Q2 2024 [36][37] - The company is in active negotiations for several meaningful opportunities, expecting a significant uptick in orders in the second half of the year [17][30] Q&A Session Summary Question: Forecast for low double-digit organic revenue growth in Q4 - Management indicated that while some ramp-up activity is expected in commercial aerospace, strong defense performance will be a key driver [43][44] Question: Improvement in cash flow and working capital - Management noted that cash flow was one of the strongest in the company's history, with a focus on improving free cash flow conversion [46][47] Question: Engineered products revenue mix and future guidance - Management expects the engineered products mix to remain steady through the end of the year, with plans to ramp up in 2026 [55][56] Question: M&A outlook and competition - Management acknowledged increased competition but remains optimistic about pursuing acquisition opportunities [59][60] Question: Update on Monrovia property sale - Management confirmed the successful sale of the Berryville facility and plans to market the Monrovia property again [61][62]

Financial Performance - The company reported record quarterly revenue of $202.3 million, a 3% increase year-over-year[16] - Net income increased by 63% to $12.6 million, representing 6.2% of revenue[16] - Adjusted EBITDA reached an all-time high of $32.4 million, or 16% of revenue, up 80 bps year-over-year[16] - GAAP Operating Income was $17.2 million, while Adjusted Operating Income was $20 million, a 1% increase year-over-year[16] - GAAP EPS was $0.82, and Adjusted EPS was $0.88[16] Backlog and Bookings - The company's backlog stands at $1,018 million[18] - Bookings for Q2 2025 were $141 million[18] - The book-to-bill ratio for Q2 2025 is 0.7[19] Segment Performance - Structural Systems segment revenue was $92.0 million, a decrease of 3.7% year-over-year[28] - Electronic Systems segment revenue was $110.2 million, an increase of 8.7% year-over-year[34] - Electronic Systems operating margin was 19.0%, an increase of 250 bps[34] Outlook and Strategy - The company is on track to meet VISION 2027 targets, with revenue between $950 million and $1,000 million and an Adjusted EBITDA margin of 18%[13, 14] - The company reiterates its 2025 full-year revenue outlook, expecting mid-single-digit growth[21, 22] - Tariffs are not expected to have a significant impact on 2025 performance, with the majority of manufacturing in the USA (85%) and sales primarily in the USA (>95%)[25, 26]

Core Insights - Ducommun (DCO) reported quarterly earnings of $0.88 per share, exceeding the Zacks Consensus Estimate of $0.80 per share, and showing an increase from $0.83 per share a year ago, resulting in an earnings surprise of +10.00% [1] - The company achieved revenues of $202.26 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 1.89% and up from $197 million year-over-year [2] - Ducommun's stock has increased by approximately 43.5% since the beginning of the year, significantly outperforming the S&P 500's gain of 7.9% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.99 on revenues of $214.4 million, and for the current fiscal year, it is $3.68 on revenues of $826.5 million [7] - The estimate revisions trend for Ducommun was favorable prior to the earnings release, leading to a Zacks Rank 2 (Buy) for the stock, indicating expected outperformance in the near future [6] Industry Context - The Aerospace - Defense Equipment industry, to which Ducommun belongs, is currently ranked in the top 41% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

[Q2 2025 Financial Highlights](index=1&type=section&id=Q2%202025%20Financial%20Highlights) Ducommun's Q2 2025 performance highlights strong revenue growth, record margins, and significant net income increase, aligning with its long-term financial goals [Overall Performance Summary](index=1&type=section&id=Overall%20Performance%20Summary) Ducommun reported strong Q2 2025 results, with revenues over $200 million, record margins, and 63% net income growth, aligning with VISION 2027 goals | Financial Metric | Q2 2025 | Change (YoY) | | :--- | :--- | :--- | | Net Revenue | $202.3 million | +3% | | Gross Margin | 26.6% | +60 bps | | Net Income | $12.6 million | +63% | | Diluted EPS | $0.82 | +58% | | Adjusted EBITDA | $32.4 million | +8% | | Adjusted EBITDA Margin | 16.0% | +80 bps | - Strong quarterly results were led by the **defense business**, particularly missile programs, radar, and military rotary-wing aircraft platforms, offsetting commercial aerospace headwinds[5](index=5&type=chunk) - The company is progressing towards its **VISION 2027 financial goal of 18% Adjusted EBITDA**, with Q2 margins showing continued expansion[6](index=6&type=chunk) - The tariff environment is not expected to materially impact the financial outlook, as **over 95% of revenue** is from domestic facilities, with active mitigation of raw material tariff exposures[7](index=7&type=chunk) [Consolidated Financial Performance](index=2&type=section&id=Consolidated%20Financial%20Performance) Ducommun's Q2 2025 consolidated financials show a 3% revenue increase to $202.3 million, driven by military and space, with net income up 63% to $12.6 million and improved cash flow [Revenue Analysis](index=2&type=section&id=Revenue%20Analysis) Net revenue grew **3% year-over-year to $202.3 million**, driven by a **$16.5 million increase in military and space**, offsetting declines in commercial aerospace and industrial markets | End-Use Market | Revenue Change (YoY) | Key Drivers | | :--- | :--- | :--- | | Military & Space | +$16.5 million | Higher rates on missile, rotary-wing aircraft, and radar platforms | | Commercial Aerospace | -$9.0 million | Lower revenues from Boeing and lower rates on rotary-wing aircraft | | Industrial | -$2.3 million | Selective pruning of non-core business | [Profitability Analysis](index=2&type=section&id=Profitability%20Analysis) Q2 2025 profitability improved significantly, with net income surging **63% to $12.6 million**, gross margin expanding **60 basis points to 26.6%**, and operating income rising to **$17.2 million** | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Net Income | $12.6 million | $7.7 million | +$4.9 million (+63%) | | Gross Profit | $53.7 million | $51.2 million | +$2.5 million | | Gross Margin | 26.6% | 26.0% | +60 bps | | Operating Income | $17.2 million | $13.9 million | +$3.2 million | - Gross margin increase was primarily driven by lower manufacturing costs and reduced restructuring charges from the Monrovia performance center wind-down[11](index=11&type=chunk) [Cash Flow and Interest Expense](index=2&type=section&id=Cash%20Flow%20and%20Interest%20Expense) Cash from operations significantly increased to **$22.4 million** in Q2 2025 from **$3.5 million** in Q2 2024, driven by higher net income and working capital management, while interest expense decreased - Net cash provided by operations increased substantially to **$22.4 million** in Q2 2025 from **$3.5 million** in Q2 2024[14](index=14&type=chunk) - Cash flow improvement was primarily due to higher net income, increased accounts payable, and a smaller increase in contract assets[14](index=14&type=chunk) - Interest expense fell by **$1.0 million** year-over-year due to lower interest rates and a reduced debt balance[13](index=13&type=chunk) [Business Segment Performance](index=2&type=section&id=Business%20Segment%20Performance) Electronic Systems drove Q2 2025 growth with an **8.7% revenue increase** and expanded operating margin, while Structural Systems saw a **3.7% revenue decline** due to reduced commercial aerospace demand [Electronic Systems](index=2&type=section&id=Electronic%20Systems) Electronic Systems delivered strong results, with net revenue increasing **8.7% to $110.2 million** and operating income growing **$4.2 million to $21.0 million**, expanding operating margin to **19.0%** | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net Revenue | $110.2 million | $101.4 million | | Operating Income | $21.0 million | $16.8 million | | Operating Margin | 19.0% | 16.6% | - Revenue growth was primarily due to higher rates on selected missiles, radar, fixed-wing aircraft platforms, and a classified program[18](index=18&type=chunk) [Structural Systems](index=3&type=section&id=Structural%20Systems) Structural Systems revenue decreased **3.7% to $92.0 million**, primarily from a **$6.2 million reduction in Boeing commercial aerospace**, leading to a **$1.0 million decline in operating income** and margin contraction to **10.4%** | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net Revenue | $92.0 million | $95.6 million | | Operating Income | $9.5 million | $10.6 million | | Operating Margin | 10.4% | 11.0% | - Revenue decline was driven by lower revenues from Boeing, partially offset by higher rates on selected military rotary-wing aircraft platforms[25](index=25&type=chunk) [Corporate General and Administrative (CG&A) Expenses](index=3&type=section&id=Corporate%20General%20and%20Administrative%20%28CG%26A%29%20Expenses) Q2 2025 Corporate General and Administrative (CG&A) expenses were **$13.3 million (6.6% of revenue)**, a slight decrease from the prior year, primarily due to lower professional services fees [CG&A Expense Details](index=3&type=section&id=CG%26A%20Expense%20Details) CG&A expenses decreased slightly year-over-year, driven by a **$1.0 million reduction in professional services fees**, partially offset by a **$0.6 million increase in compensation and benefits** | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | CG&A Expenses | $13.3 million | $13.4 million | | CG&A as % of Revenue | 6.6% | 6.8% | [Financial Statements and Reconciliations](index=6&type=section&id=Financial%20Statements%20and%20Reconciliations) This section presents unaudited financial statements for Q2 2025, including condensed balance sheets, income statements, GAAP to non-GAAP reconciliations, and backlog breakdown [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 28, 2025, Ducommun's balance sheet shows total assets of **$1.14 billion**, total liabilities of **$433.0 million**, and shareholders' equity increased to **$707.8 million** | Balance Sheet Item | June 28, 2025 (in millions) | December 31, 2024 (in millions) | | :--- | :--- | :--- | | Total Current Assets | $598.2 million | $568.1 million | | Total Assets | $1,140.8 million | $1,126.1 million | | Total Current Liabilities | $184.5 million | $175.5 million | | Total Liabilities | $433.0 million | $443.6 million | | Total Shareholders' Equity | $707.8 million | $682.5 million | [Condensed Consolidated Statements of Income](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) Q2 2025 income statement highlights a year-over-year increase in net revenue to **$202.3 million** and net income to **$12.6 million**, or **$0.82 per diluted share** | Income Statement Item (Q2) | 2025 (in millions) | 2024 (in millions) | | :--- | :--- | :--- | | Net Revenues | $202.3 million | $197.0 million | | Gross Profit | $53.7 million | $51.2 million | | Operating Income | $17.2 million | $13.9 million | | Net Income | $12.6 million | $7.7 million | | Diluted EPS | $0.82 | $0.52 | [Non-GAAP Reconciliations](index=8&type=section&id=Non-GAAP%20Reconciliations) The company provides GAAP to non-GAAP reconciliations, showing Q2 2025 Adjusted EBITDA at **$32.4 million (16.0% of revenue)** and non-GAAP adjusted net income at **$13.4 million** GAAP Net Income to Adjusted EBITDA Reconciliation (Q2) | (in thousands) | 2025 | 2024 | | :--- | :--- | :--- | | GAAP net income | $12,553 | $7,724 | | Adjustments (Interest, Tax, D&A, etc.) | $19,855 | $22,249 | | **Adjusted EBITDA** | **$32,408** | **$29,973** | GAAP to Non-GAAP Net Income Reconciliation (Q2) | (in thousands) | 2025 | 2024 | | :--- | :--- | :--- | | GAAP net income | $12,553 | $7,724 | | Total adjustments | $877 | $4,748 | | **Non-GAAP adjusted net income** | **$13,430** | **$12,472** | [Non-GAAP Backlog by Reporting Segment](index=13&type=section&id=Non-GAAP%20Backlog%20by%20Reporting%20Segment) As of June 28, 2025, total backlog was **$1.018 billion**, a decrease from **$1.061 billion** at year-end 2024, with declines across both Electronic and Structural Systems, mainly in military and space | Backlog (in thousands) | June 28, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | **Consolidated Total** | **$1,017,872** | **$1,060,819** | | Military and space | $592,580 | $624,785 | | Commercial aerospace | $404,080 | $415,905 | | **Electronic Systems Total** | **$532,871** | **$555,966** | | **Structural Systems Total** | **$485,001** | **$504,853** | [Supplementary Information](index=3&type=section&id=Supplementary%20Information) This section provides logistical and legal information, including investor call details, a corporate overview, forward-looking statements disclaimer, and non-GAAP financial measure definitions

Quarterly Revenue Tops $200M; Record Quarterly Gross Margin; Net Income Increase of 63% Year-over-Year COSTA MESA, Calif., Aug. 07, 2025 (GLOBE NEWSWIRE) -- Ducommun Incorporated (NYSE: DCO) ("Ducommun" or the "Company") today reported results for its second quarter ended June 28, 2025. Second Quarter 2025 Recap "Another excellent quarter for Ducommun as we continue to make solid progress towards our VISION 2027 goals with both gross margin and Adjusted EBITDA margin and dollars at record levels. Net revenu ...