Ducommun Incorporated Reports Third Quarter 2023 Results
Ducommun Incorporated (NYSE: DCO) reported all-time record quarterly revenue of $196.3 million for Q3 2023, with net income of $3.2 million. Adjusted EBITDA reached 14.9% of revenue, driven by growth in Commercial Aerospace and Defense. The Company's gross margins expanded by 200 bps year-over-year, reaching 22.7% for the quarter.
Positive
All-time record quarterly revenue and adjusted operating income
Growth in both Commercial Aerospace and Defense
Strong margin expansion driving adjusted EBITDA to 14.9%
Gross margins expanded by 200 bps year-over-year to 22.7%
11/08/2023 - 06:30 AM
All-Time Record Quarterly Revenue and Adjusted Operating Income; Growth in both Commercial Aerospace and Defense; Strong Margin Expansion Driving Adjusted EBITDA to 14.9%
SANTA ANA, Calif., Nov. 08, 2023 (GLOBE NEWSWIRE) -- Ducommun Incorporated (NYSE: DCO) (“Ducommun” or the “Company”) today reported results for its third quarter ended September 30, 2023.
Third Quarter 2023 Recap
Net revenue was $196.3 million , a new all-time quarterly record for the Company Net income of $3.2 million , or $0.22 per diluted share Adjusted net income of $10.3 million , or $0.70 per diluted share Adjusted EBITDA of $29.3 million , or 14.9% of revenue, an all-time high for Ducommun “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,” said Stephen G. Oswald, chairman, president and chief executive officer. “We achieved a new quarterly revenue record of $196.3 million up 5% over Q3 2022, the previous high being in 2012, with the ramp up in wide-body aircraft demand driving Commercial Aerospace revenues up 14% year-over-year. The Company's gross margins expanded 200 bps year-over-year as well from 20.7% to 22.7% for the quarter as we continue improving operating performance which includes the meaningful on-going restructuring activities announced in 2022.
“In December 2022, we laid out our Vision 2027 Plan to investors and in the first three quarters of 2023, I am happy and encouraged to see the significant progress already towards those targets for both revenue growth and margin expansion. There are also many positive catalysts happening currently within the Company that will significantly drive shareholder value in the quarters and years ahead. In summary, Ducommun is well positioned to execute our stated strategy over the next four years with significant runway ahead.”
Third Quarter Results
Net revenue for the third quarter of 2023 was $196.3 million compared to $186.6 million for the third quarter of 2022. The year-over-year increase of 5.2% was primarily due to the following:
$9.6 million higher revenue in the Company’s commercial aerospace end-use markets due to higher build rates on twin-aisle commercial aircraft platforms as well as the A220 platform, commercial rotary-wing aircraft platforms, and other commercial aerospace business; and$2.4 million higher revenue in the Company’s military and space end-use markets due to higher build rates on military rotary-wing aircraft platforms and other military and space platforms, partially offset by lower build rates on military fixed-wing aircraft platforms and various missile platforms.Net income for the third quarter of 2023 was $3.2 million , or $0.22 per diluted share, compared to $8.5 million , or $0.69 per diluted share, for the third quarter of 2022. This reflects higher selling, general and administrative (“SG&A”) expenses of $7.4 million , higher restructuring charges of $3.2 million , and higher interest expense of $2.4 million , partially offset by higher gross profit of $6.0 million . The higher SG&A expenses were primarily due to BLR Aerospace L.L.C. (“BLR”) SG&A expenses of $3.6 million (49% of the total increase in SG&A expenses) which did not exist in the prior year period as the acquisition of BLR was completed during Q2 2023, and higher stock-based compensation expense of $2.9 million .
Gross profit for the third quarter of 2023 was $44.6 million , or 22.7% of revenue, compared to gross profit of $38.6 million , or 20.7% of revenue, for the third quarter of 2022. The increase in gross profit as a percentage of net revenue year-over-year was primarily due to favorable product mix, pricing actions, and favorable manufacturing volume, partially offset by unfavorable other manufacturing costs.
Operating income for the third quarter of 2023 was $8.6 million , or 4.4% of revenue, compared to $13.2 million , or 7.1% of revenue, in the comparable period last year. The year-over-year decrease of $4.6 million was primarily due to higher SG&A expenses and higher restructuring charges, both of which were noted above, partially offset by higher gross profit. Adjusted operating income for the third quarter of 2023 was $17.5 million , or 8.9% of revenue, compared to $17.2 million , or 9.2% of revenue, in the comparable period last year. The year-over-year increase was primarily due to favorable product mix, pricing actions, and favorable manufacturing volume, partially offset by higher SG&A expenses, mainly due to the addition of the BLR acquisition.
Interest expense for the third quarter of 2023 was $5.4 million compared to $3.0 million in the comparable period of 2022. The year-over-year increase was primarily due to higher interest rates.
Adjusted EBITDA for the third quarter of 2023 was $29.3 million , or 14.9% of revenue, compared to $26.0 million , or 13.9% of revenue, for the comparable period in 2022.
During the third quarter of 2023, the net cash provided by operations was $14.3 million compared to a net cash used in operations of $5.5 million during the third quarter of 2022. The higher net cash provided by operations during the third quarter of 2023 was primarily due to higher contract liabilities (resulting from driving more progress payments from its customers) and higher accrued and other liabilities, partially offset by higher inventories and lower net income.
Business Segment Information
Electronic Systems
Electronic Systems segment net revenue for the quarter ended September 30, 2023 was $110.7 million , compared to $113.4 million for the third quarter of 2022. The year-over-year decrease was primarily due to the following:
$3.2 million lower revenue within the Company’s military and space end-use markets due to lower build rates on military fixed-wing aircraft platforms, partially offset by higher build rates on other military and space platforms; partially offset by$2.8 million higher revenue in the Company’s commercial aerospace end-use markets due to higher build rates on other commercial aerospace platforms.Electronic Systems segment operating income for the quarter ended September 30, 2023 was $12.7 million , or 11.5% of revenue, compared to $13.9 million , or 12.2% of revenue, for the comparable quarter in 2022. The year-over-year decrease of $1.2 million was primarily due to higher restructuring charges and unfavorable other manufacturing costs, partially offset by favorable product mix and favorable manufacturing volume.
Electronic Systems segment adjusted operating income for the quarter ended September 30, 2023 was $14.9 million , or 13.4% of revenue, compared to $14.6 million , or 12.9% of revenue, for the comparable quarter in 2022. The year-over-year increase of $0.3 million was primarily due to favorable product mix, pricing actions, and favorable manufacturing volume.
Structural Systems
Structural Systems segment net revenue for the quarter ended September 30, 2023 was $85.5 million , compared to $73.2 million for the third quarter of 2022. The year-over-year increase was primarily due to the following:
$6.7 million higher revenue within the Company’s commercial aerospace end-use markets due to higher build rates on large aircraft platforms; and$5.6 million higher revenue within the Company’s military and space end-use markets due to higher build rates on military rotary-wing platforms and other military and space platforms, partially offset by lower build rates various missile platforms.Structural Systems segment operating income for the quarter ended September 30, 2023 was $6.7 million , or 7.9% of revenue, compared to $6.7 million , or 9.1% of revenue, for the comparable quarter in 2022. The year-over-year increase of $0.1 million was primarily due to favorable product mix and favorable manufacturing volume, partially offset by higher restructuring charges, higher inventory purchase accounting adjustments, and unfavorable other manufacturing costs.
Structural Systems segment adjusted operating income for the quarter ended September 30, 2023 was $13.5 million , or 15.7% of revenue, compared to $9.8 million , or 13.3% of revenue, for the comparable quarter in 2022. The year-over-year increase of $3.7 million was primarily due to favorable product mix, pricing actions, and favorable manufacturing volume.
Corporate General and Administrative (“CG&A”) Expenses
CG&A expenses for the third quarter of 2023 were $10.8 million , or 5.5% of total Company revenue, compared to $7.4 million , or 3.9% of total Company revenue, for the comparable quarter in the prior year. The year-over-year increase in CG&A expenses was primarily due to higher stock-based compensation expense of $2.8 million .
Conference Call
A teleconference hosted by Stephen G. Oswald, the Company’s chairman, president and chief executive officer, and Suman B. Mookerji, the Company’s senior vice president, chief financial officer will be held today, November 8, 2023 at 10:00 a.m. PT (1:00 p.m. ET) to review these financial results. To access the conference call, please pre-register using the following registration link:
https://register.vevent.com/register/BIebbd705905a44130870c88a8bdf92a4a
Registrants will receive a confirmation with dial-in details. Mr. Oswald and Mr. Mookerji will be speaking on behalf of the Company and anticipate the call (including Q&A) to last approximately 45 minutes. A live webcast of the event can be accessed using the link above. A replay of the webcast will be available on the Ducommun website at Ducommun.com .
Additional information regarding Ducommun's results can be found in the Q3 2023 Earnings Presentation available at Ducommun.com .
About Ducommun Incorporated
Ducommun Incorporated delivers value-added innovative 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 expectations relating to the results of its restructuring initiative and continued improvement of its operating performance, the continuing commercial aerospace recovery, and the execution of its strategy and driving shareholder value in the years ahead. The Company generally uses the words “may,” “will,” “could,” “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 strength of the real estate market, the duration of any lease entered into as part of any sale-leaseback transaction, the amount of commissions owed to brokers, and applicable tax rates; the impact of the Company’s debt service obligations and restrictive debt covenants; the Company’s end-use markets are cyclical; the Company depends upon a selected base of industries and customers; a significant portion of the Company’s business depends upon U.S. Government defense spending; the Company is subject to extensive regulation and audit by the Defense Contract Audit Agency; contracts with some of the Company’s customers contain provisions which give the its customers a variety of rights that are unfavorable to the Company; further consolidation in the aerospace industry could adversely affect 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 relies on its suppliers to meet the quality and delivery expectations of its customers; the Company uses 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; the impact of existing and future accounting standards and tax rules and regulations; environmental liabilities could adversely affect the Company’s financial results; cyber security attacks, internal system or service failures 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 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, November 8, 2023 , 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, restructuring charges, Guaymas fire related expenses, other fire related expenses, insurance recoveries related to loss on operating assets, insurance recoveries related to business interruption, inventory purchase accounting adjustments, loss on extinguishment of debt, and other debt refinancing costs), non-GAAP operating income and as a percentage of net revenues, non-GAAP earnings, non-GAAP earnings per share, and backlog. In addition, certain other 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.
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. 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 the Company’s 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 the Company’s net revenues. As a result of these factors, trends in the Company’s overall level of backlog may not be indicative of trends in the Company’s future net revenues.
CONTACT:
Suman Mookerji, Senior Vice President, Chief Financial Officer, 657.335.3665
DUCOMMUN INCORPORATED AND SUBSIDIARIES
September 30, December 31, Assets Current Assets Cash and cash equivalents $ 27,195 $ 46,246 Accounts receivable, net 104,551 103,958 Contract assets 191,151 191,290 Inventories 215,189 171,211 Production cost of contracts 5,861 5,693 Other current assets 12,770 8,938 Total Current Assets 556,717 527,336 Property and Equipment, Net 111,894 106,225 Operating Lease Right-of-Use Assets 31,827 34,632 Goodwill 244,600 203,407 Intangibles, Net 170,665 127,201 Other Assets 26,648 22,705 Total Assets $ 1,142,351 $ 1,021,506 Liabilities and Shareholders’ Equity Current Liabilities Accounts payable $ 78,455 $ 90,143 Contract liabilities 51,477 47,068 Accrued and other liabilities 45,920 48,820 Operating lease liabilities 8,001 7,155 Current portion of long-term debt 6,250 6,250 Total Current Liabilities 190,103 199,436 Long-Term Debt, Less Current Portion 264,992 240,595 Non-Current Operating Lease Liabilities 24,836 28,841 Deferred Income Taxes 10,624 13,953 Other Long-Term Liabilities 16,394 12,721 Total Liabilities 506,949 495,546 Commitments and Contingencies Shareholders’ Equity Common Stock 146 121 Additional Paid-In Capital 204,993 112,042 Retained Earnings 416,870 406,052 Accumulated Other Comprehensive Income 13,393 7,745 Total Shareholders’ Equity 635,402 525,960 Total Liabilities and Shareholders’ Equity $ 1,142,351 $ 1,021,506
DUCOMMUN INCORPORATED AND SUBSIDIARIES
Three Months Ended Nine Months Ended September 30, October 1, September 30, October 1, Net Revenues $ 196,250 $ 186,590 $ 564,761 $ 524,269 Cost of Sales 151,648 148,003 443,270 418,565 Gross Profit 44,602 38,587 121,491 105,704 Selling, General and Administrative Expenses 32,182 24,803 88,755 72,340 Restructuring Charges 3,811 567 12,750 3,270 Operating Income 8,609 13,217 19,986 30,094 Interest Expense (5,370 ) (2,998 ) (15,324 ) (8,056 ) Loss on Extinguishment of Debt — (295 ) — (295 ) Other Income — — 7,945 3,000 Income Before Taxes 3,239 9,924 12,607 24,743 Income Tax Expense 26 1,462 1,789 4,035 Net Income $ 3,213 $ 8,462 $ 10,818 $ 20,708 Earnings Per Share Basic earnings per share $ 0.22 $ 0.70 $ 0.81 $ 1.72 Diluted earnings per share $ 0.22 $ 0.69 $ 0.79 $ 1.68 Weighted-Average Number of Common Shares Outstanding Basic 14,625 12,112 13,408 12,057 Diluted 14,814 12,350 13,661 12,346 Gross Profit % 22.7 % 20.7 % 21.5 % 20.2 % SG&A % 16.4 % 13.3 % 15.7 % 13.8 % Operating Income % 4.4 % 7.1 % 3.5 % 5.7 % Net Income % 1.6 % 4.5 % 1.9 % 3.9 % Effective Tax Rate 0.8 % 14.7 % 14.2 % 16.3 %
DUCOMMUN INCORPORATED AND SUBSIDIARIES
Three Months Ended Nine Months Ended % September October % % % September October % % Net Revenues Electronic Systems (2.4 ) % $ 110,707 $ 113,404 56.4 % 60.8 % 0.9 % $ 323,457 $ 320,602 57.3 % 61.2 % Structural Systems 16.9 % 85,543 73,186 43.6 % 39.2 % 18.5 % 241,304 203,667 42.7 % 38.8 % Total Net Revenues 5.2 % $ 196,250 $ 186,590 100.0 % 100.0 % 7.7 % $ 564,761 $ 524,269 100.0 % 100.0 % Segment Operating Income Electronic Systems $ 12,710 $ 13,881 11.5 % 12.2 % $ 32,249 $ 36,902 10.0 % 11.5 % Structural Systems 6,743 6,687 7.9 % 9.1 % 16,873 12,839 7.0 % 6.3 % 19,453 20,568 49,122 49,741 Corporate General and Administrative Expenses (1) (10,844 ) (7,351 ) (5.5 ) % (3.9 ) % (29,136 ) (19,647 ) (5.2 ) % (3.7 ) % Total Operating Income $ 8,609 $ 13,217 4.4 % 7.1 % $ 19,986 $ 30,094 3.5 % 5.7 % Adjusted EBITDA Electronic Systems Operating Income $ 12,710 $ 13,881 $ 32,249 $ 36,902 Other Income — — 222 — Depreciation and Amortization 3,567 3,510 10,626 10,500 Stock-Based Compensation Expense (2) 97 — 321 — Restructuring Charges 1,794 340 5,739 1,624 18,168 17,731 16.4 % 15.6 % 49,157 49,026 15.2 % 15.3 % Structural Systems Operating Income 6,743 6,687 16,873 12,839 Depreciation and Amortization 4,852 4,100 13,619 12,659 Stock-Based Compensation Expense (3) 76 — 259 — Restructuring Charges 2,205 227 7,113 2,174 Guaymas fire related expenses 548 1,496 3,896 3,451 Other fire related expenses — — 477 — Inventory Purchase Accounting Adjustments 2,041 107 2,807 1,381 16,465 12,617 19.2 % 17.2 % 45,044 32,504 18.7 % 16.0 % Corporate General and Administrative Expenses (1) Operating loss (10,844 ) (7,351 ) (29,136 ) (19,647 ) Depreciation and Amortization 59 59 176 176 Stock-Based Compensation Expense (4) 5,479 2,714 13,189 7,904 Restructuring Charges — — 86 — Other Debt Refinancing Costs — 224 — 224 (5,306 ) (4,354 ) (15,685 ) (11,343 ) Adjusted EBITDA $ 29,327 $ 25,994 14.9 % 13.9 % $ 78,516 $ 70,187 13.9 % 13.4 % Capital Expenditures Electronic Systems $ 978 $ 3,192 $ 4,752 $ 7,831 Structural Systems 3,802 1,175 11,043 7,033 Corporate Administration — — — — Total Capital Expenditures $ 4,780 $ 4,367 $ 15,795 $ 14,864
(1) Includes costs not allocated to either the Electronic Systems or Structural Systems operating segments.
(2) The three and nine months ended September 30, 2023 included less than $0.1 million and $0.1 million , respectively, of stock-based compensation expense recorded as cost of sales. The three and nine months ended October 1, 2022 both included zero stock-based compensation expense recorded as cost of sales.
(3) The three and nine months ended September 30, 2023 included $0.1 million and $0.2 million , respectively, of stock-based compensation expense recorded as cost of sales. The three and nine months ended October 1, 2022 both included zero stock-based compensation expense recorded as cost of sales.
(4) The three and nine months ended September 30, 2023 included $1.4 million and $2.7 million , respectively, and the three and nine months ended October 1, 2022 included $0.3 million and $0.8 million , respectively, of stock-based compensation expense for awards with both performance and market conditions that will be settled in cash.
Three Months Ended Nine Months Ended GAAP To Non-GAAP Operating Income September October % % September October % % GAAP Operating income $ 8,609 $ 13,217 $ 19,986 $ 30,094 GAAP Operating income - Electronic Systems $ 12,710 $ 13,881 $ 32,249 $ 36,902 Adjustment: Other income — — 222 — Restructuring charges 1,794 340 5,739 1,624 Amortization of acquisition-related intangible assets 373 374 1,120 1,120 Adjusted operating income - Electronic Systems 14,877 14,595 13.4 % 12.9 % 39,330 39,646 12.2 % 12.4 % GAAP Operating income - Structural Systems 6,743 6,687 16,873 12,839 Adjustment: Restructuring charges 2,205 227 7,113 2,174 Guaymas fire related expenses 548 1,496 3,896 3,451 Other fire related expenses — — 477 — Inventory purchase accounting adjustments 2,041 107 2,807 1,381 Amortization of acquisition-related intangible assets 1,935 1,236 4,873 3,719 Adjusted operating income - Structural Systems 13,472 9,753 15.7 % 13.3 % 36,039 23,564 14.9 % 11.6 % GAAP Operating loss - Corporate (10,844 ) (7,351 ) (29,136 ) (19,647 ) Adjustment: Restructuring charges — — 86 — Other debt refinancing costs — 224 — 224 Adjusted operating loss - Corporate (10,844 ) (7,127 ) (29,050 ) (19,423 ) Total adjustments 8,896 4,004 26,333 13,693 Adjusted operating income $ 17,505 $ 17,221 8.9 % 9.2 % $ 46,319 $ 43,787 8.2 % 8.4 %
DUCOMMUN INCORPORATED AND SUBSIDIARIES
Three Months Ended Nine Months Ended GAAP To Non-GAAP Earnings September 30, October 1, September 30, October 1, GAAP Net income $ 3,213 $ 8,462 $ 10,818 $ 20,708 Adjustments: Restructuring charges (1) 3,199 453 10,350 3,038 Guaymas fire related expenses (1) 439 1,197 3,117 2,761 Other fire related expenses (1) — — 382 — Insurance recoveries related to loss on operating assets (1) — — (4,450 ) — Insurance recoveries related to business interruption (1) — — (1,728 ) (2,400 ) Inventory purchase accounting adjustments (1) 1,633 86 2,246 1,105 Amortization of acquisition-related intangible assets (1) 1,846 1,288 4,794 3,871 Loss on extinguishment of debt (1) — 236 — 236 Other debt refinancing costs (1) — 179 — 179 Total adjustments 7,117 3,439 14,711 8,790 Adjusted net income $ 10,330 $ 11,901 $ 25,529 $ 29,498
Three Months Ended Nine Months Ended GAAP Earnings Per Share To Non-GAAP Earnings Per Share September 30, October 1, September 30, October 1, GAAP Diluted earnings per share (“EPS”) $ 0.22 $ 0.69 $ 0.79 $ 1.68 Adjustments: Restructuring charges (1) 0.22 0.03 0.76 0.25 Guaymas fire related expenses (1) 0.03 0.10 0.23 0.22 Other fire related expenses (1) — — 0.03 — Insurance recoveries related to loss on operating assets (1) — — (0.33 ) — Insurance recoveries related to business interruption (1) — — (0.13 ) (0.19 ) Inventory purchase accounting adjustments (1) 0.11 0.01 0.17 0.09 Amortization of acquisition-related intangible assets (1) 0.12 0.10 0.35 0.31 Loss on extinguishment of debt (1) — 0.02 — 0.02 Other debt refinancing costs (1) — 0.01 — 0.01 Total adjustments 0.48 0.27 1.08 0.71 Adjusted diluted EPS $ 0.70 $ 0.96 $ 1.87 $ 2.39 Shares used for adjusted diluted EPS 14,814 12,350 13,661 12,346
(1) Includes effective tax rate of 20.0% for both 2023 and 2022 adjustments.
DUCOMMUN INCORPORATED AND SUBSIDIARIES
September 30, December 31, Consolidated Ducommun Military and space $ 494,447 $ 457,354 Commercial aerospace 422,728 450,092 Industrial 41,371 53,374 Total $ 958,546 $ 960,820 Electronic Systems Military and space $ 368,036 $ 361,582 Commercial aerospace 91,801 125,590 Industrial 41,371 53,374 Total $ 501,208 $ 540,546 Structural Systems Military and space $ 126,411 $ 95,772 Commercial aerospace 330,927 324,502 Total $ 457,338 $ 420,274
* 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 September 30, 2023 was $958.5 million compared to $960.8 million as of December 31, 2022. 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 September 30, 2023 were $947.9 million compared to $853.0 million as of December 31, 2022.
What is Ducommun Incorporated's ticker symbol?
The ticker symbol for Ducommun Incorporated is DCO.
What were the net revenue and net income for Q3 2023?
The net revenue for Q3 2023 was $196.3 million, and the net income was $3.2 million.
What was the adjusted EBITDA for Q3 2023?
The adjusted EBITDA for Q3 2023 was 14.9% of revenue.
What was the percentage increase in the Company's gross margins year-over-year?
The Company's gross margins expanded by 200 basis points year-over-year, reaching 22.7% for the quarter.
What were the reasons for the year-over-year increase in net revenue for Q3 2023?
The increase was primarily due to higher build rates on twin-aisle commercial aircraft platforms, A220 platform, commercial rotary-wing aircraft platforms, and other commercial aerospace business, as well as higher build rates on military rotary-wing aircraft platforms and other military and space platforms.
When will the conference call to review the financial results be held?
The conference call will be held on November 8, 2023, at 10:00 a.m. PT (1:00 p.m. ET).
