Litigation hit but Ducommun (NYSE: DCO) delivers record 2025 revenue and margins

Rhea-AI Filing Summary

Ducommun Incorporated reported strong fourth quarter and full-year 2025 operating results, highlighted by record revenue and margins but a GAAP loss driven by a large litigation charge.

Q4 2025 net revenue rose 9.4% year-over-year to $215.8 million, led by military and space demand, with gross margin improving to 27.7%. GAAP net income was $7.4 million, or $0.48 per diluted share, while non-GAAP adjusted net income was $16.2 million, or $1.05 per diluted share. Adjusted EBITDA increased to $37.9 million, or 17.5% of revenue.

For 2025, net revenue reached a record $824.7 million, the third consecutive annual record, and adjusted EBITDA was $135.6 million, or 16.4% of revenue. A $107.3 million litigation settlement and related costs drove a GAAP net loss of $33.9 million, or $2.27 per share, though non-GAAP adjusted diluted EPS was $3.75. Remaining performance obligations hit a record $1.106 billion, with a Q4 book-to-bill ratio of 1.3x, and backlog totaled $1.203 billion.

Positive

• Record revenue and margin expansion: 2025 net revenue reached $824.7 million, the third consecutive annual record, while adjusted EBITDA rose to $135.6 million (16.4% of revenue), and Q4 gross margin improved 420 bps year-over-year to 27.7%.

Negative

• Large litigation impact and GAAP loss: Litigation settlement and related costs of $107.3 million drove a 2025 GAAP net loss of $33.9 million and a Q4 GAAP operating cash outflow of $74.7 million, despite strong underlying operations.

Insights

Aerospace & Defense Equity Analyst

Strong underlying growth and margins, but a large litigation charge drove a GAAP loss.

Ducommun delivered solid Q4 2025 growth, with net revenue up 9.4% to $215.8 million and gross margin expanding to 27.7%. Defense demand, especially missile platforms, drove a record non-GAAP revenue backlog and remaining performance obligations of $1.106 billion.

Full-year net revenue reached a record $824.7 million and adjusted EBITDA margin improved to 16.4%, indicating healthier underlying profitability. However, a litigation settlement and related costs of $107.3 million turned the year into a GAAP net loss of $33.9 million, versus prior-year profit.

Cash from operations was pressured, with Q4 GAAP operating cash outflow of $74.7 million, though non-GAAP adjusted operating cash flow was positive at $26.5 million. Subsequent filings may provide more detail on how litigation-related payments and elevated debt of $298.8 million influence balance sheet flexibility.

0000030305FALSE600Anton Boulevard, Suite 1100Costa MesaCalifornia00000303052026-02-262026-02-26

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

____________________________

FORM 8-K

____________________________

 CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 26, 2026

____________________________

DUCOMMUN INCORPORATED

(Exact name of registrant as specified in its charter)

____________________________

Delaware			001-08174						95-0693330
(State or other jurisdiction of incorporation)			(Commission File Number)						(IRS Employer Identification No.)
			600Anton Boulevard, Suite 1100 , Costa Mesa, California						92626-7100
			(Address of principal executive offices)						(Zip Code)

Registrant’s telephone number, including area code (657) 335-3665

N/A

(Former name or former address, if changed since last report.)

____________________________ 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, $.01 par value per share

DCO

New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the
Exchange Act.						¨

Item 2.02 Results of Operations and Financial Condition.

Ducommun Incorporated issued a press release on February 26, 2026 in the form attached hereto as Exhibit 99.1.

 

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

Exhibit No.						Exhibit Title or Description
99.1						Ducommun Incorporated press release issued on February 26, 2026.
104						Cover Page Interactive Data File (embedded within the Inline XBRL document).

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

						DUCOMMUN INCORPORATED (Registrant)
Date: February 26, 2026						By:			/s/ Suman B. Mookerji
									Suman B. Mookerji
									Senior Vice President, Chief Financial Officer

EXHIBIT 99.1

NEWS RELEASE

Ducommun Incorporated Reports

Fourth Quarter 2025 Results

Strong Finish to 2025; Record Full Year Revenue and Gross Margins

COSTA MESA, CALIFORNIA (February 26, 2026) – Ducommun Incorporated (NYSE: DCO) (“Ducommun” or the “Company”) today reported results for its fourth quarter and year ended December 31, 2025.

Fourth Quarter 2025 Recap

•Net revenue of $215.8 million, an increase of 9.4% over Q4 2024

•Gross margin of 27.7% showed year-over-year growth of 420 bps

•Net income of $7.4 million increased 10% year-over-year, or $0.48 per diluted share, or 3.4% of revenue

•Non-GAAP adjusted net income for the quarter of $16.2 million which increased 43% year-over-year, or $1.05 per diluted share

•Adjusted EBITDA of $37.9 million (increase of 39% year-over-year), or 17.5% of revenue, up 370 bps year-over-year

•Revenue Remaining Performance Obligations (“RPO”) at a new record of $1.1 billion with book-to-bill ratio of 1.3x

“We continued to make excellent progress to close out year three of our five year VISION 2027 with gross margin and Adjusted EBITDA margins at record levels along with Engineered Products at 23% of our revenue mix. In addition, I am very happy to report that in 2025, the Company set a new record for revenue for the third consecutive year, exceeding $800 million for the first time, and getting to $825 million for 2025. In Q4, net revenue grew 9.4% to a new quarterly record of $215.8 million, led by our military and space business,” said Stephen G. Oswald, chairman, president and chief executive officer. “Our defense business was fueled by growth in DCO's missiles platforms, fixed-wing aircraft and rotorcraft platforms. Book-to-bill remained strong during the quarter at 1.3x with orders from missile components driving bookings. With the Department of War's focus on ramping up production and long-term agreements now in place with RTX, our largest customer and Lockheed, we expect our missile franchise to continue to gain strength in 2026 and beyond.

“Ducommun also continues to make strong progress in its margin expansion journey with quarterly gross margins expanding 420 bps year-over-year to 27.7%, and full year gross margins at 26.9%, both new records for us. Adjusted EBITDA margins as well benefited from favorable product mix, expanding 370 bps year-over-year to 17.5%, with full year 2025 Adjusted EBITDA margins at 16.4%. Solid progress continues towards our VISION 2027 commitment of 18% Adjusted EBITDA with eight quarters to go.

“The tariff environment has not had a material impact on our financial results thus far and with the recent Supreme Court decision, it further mitigates risk on this front. At this time, we do not expect tariffs to have any material impact on our financial outlook. Ducommun is largely a U.S. manufacturer with U.S. workers and our domestic facilities generate more than 95% of Ducommun’s revenue. We are also making progress in mitigating raw materials tariff exposures through either duty exemptions on military products or by passing through to our customers under the terms of our contracts.

“In summary, Q4 was another strong performance for our team and 2025 was another record year for the Company. With Boeing continuing to make significant progress on their production rate ramp and destocking headwinds easing through 2026, our commercial aerospace business is better positioned in the back half of this year and

beyond. Growth in defense spending, particularly the significant ramp in missile production activity will be a boost for our military and space segment in 2026 and several years after that. These drivers accompanied by our continued work to expand margins positions us and the DCO shareholder very well going forward.”

Fourth Quarter Results

Net revenue for the fourth quarter of 2025 was $215.8 million, compared to $197.3 million for the fourth quarter of 2024. The 9.4% increase year-over-year was primarily due to the following in the Company’s key end-use markets:

•$14.7 million higher revenue within the Company’s military and space end-use markets due to higher rates on selected fixed-wing and rotary-wing aircraft platforms, a classified program, and missile platforms, partially offset by lower rates on electronic warfare platforms; and

•$0.5 million higher revenue within the Company’s commercial aerospace end-use markets due to growth in Airbus and higher revenues from in-flight entertainment, partially offset by lower revenues from Boeing on the 737 MAX.

In addition, revenue for the Company’s industrial end-use markets for the fourth quarter of 2025 increased $3.3 million compared to the fourth quarter of 2024 mainly due to restocking and last time buys.

Remaining Performance Obligations as of December 31, 2025 reached a new record of $1,106.0 million driven by strong bookings during the quarter and a book-to-bill ratio of 1.3x. Bookings were driven by strong order flow for missile platforms.

Net income for the fourth quarter of 2025 was $7.4 million, or $0.48 per diluted share, compared to $6.8 million, or $0.45 per diluted share, for the fourth quarter of 2024. This reflects higher gross profit of $13.4 million, partially offset by higher litigation settlement and related costs of $7.6 million, higher selling, general and administrative (“SG&A”) expenses of $3.4 million, and higher income tax expense of $2.5 million. Non-GAAP adjusted net income for the fourth quarter of 2025 was $16.2 million, or $1.05 per diluted share, compared to $11.4 million, or $0.75 per diluted share for the fourth quarter of 2024.

Gross profit for the fourth quarter of 2025 was $59.8 million, or 27.7% of revenue, compared to gross profit of $46.4 million, or 23.5% of revenue, for the fourth quarter of 2024. The increase in gross margin percentage year-over-year was primarily due to higher manufacturing volume and favorable product mix, partially offset by lower restructuring and other one-time charges related to the shutdown of the Company’s Monrovia performance center.

Operating income for the fourth quarter of 2025 was $14.0 million, or 6.5% of revenue, compared to $10.4 million, or 5.3% of revenue, in the comparable period last year. The year-over-year increase was primarily due to higher gross profit noted above, partially offset by higher litigation settlement and related costs and higher SG&A expenses. Non-GAAP adjusted operating income for the fourth quarter of 2025 was $24.6 million, or 11.4% of revenue, compared to $16.1 million, or 8.2% of revenue, in the comparable period last year.

Interest expense for the fourth quarter of 2025 was $3.5 million compared to $3.6 million in the comparable period of 2024. The year-over-year decrease was primarily due to lower interest rates partially offset by a higher debt balance in the fourth quarter of 2025.

Adjusted EBITDA for the fourth quarter of 2025 was $37.9 million, or 17.5% of revenue, compared to $27.3 million, or 13.8% of revenue, for the comparable period in 2024.

During the fourth quarter of 2025, the net cash used in operations was $74.7 million compared to net cash provided by operations of $18.4 million during the fourth quarter of 2024. The lower net cash provided by operations year-over-year was primarily due to litigation settlement and related costs, net, higher accounts receivable, and lower accounts payable, partially offset by lower inventories and higher contract liabilities. Due to the size and one-time nature of litigation settlement and related payments made during the fourth quarter of 2025, the Company is disclosing Non-GAAP adjusted cash flow from operations. Non-GAAP adjusted net cash provided by operating activities was $26.5 million during the fourth quarter of 2025 compared to $18.4 million during the fourth quarter of 2024.

Business Segment Information

Electronic Systems

Electronic Systems reported net revenue for the current quarter of $119.6 million, compared to $107.0 million for the fourth quarter of 2024. The year-over-year increase was primarily due to the following:

•$9.4 million higher revenue within the Company’s military and space end-use markets due to higher rates on selected fixed-wing aircraft, a classified program, and missile platforms, partially offset by lower rates on electronic warfare platforms; partially offset by

•$0.1 million lower revenue within the Company’s commercial aerospace end-use markets due to lower rates on large commercial aircraft platforms, partially offset by higher revenues from in-flight entertainment.

In addition, revenue for the Company’s industrial end-use markets for the fourth quarter of 2025 increased $3.3 million compared to the fourth quarter of 2024 mainly due to restocking and last time buys.

Electronic Systems operating income for the current year fourth quarter was $22.0 million, or 18.4% of revenue, compared to $19.0 million, or 17.7% of revenue, for the comparable quarter in 2024. The year-over-year increase was primarily due to higher manufacturing volume and favorable product mix, partially offset by higher other manufacturing costs. Non-GAAP adjusted operating income for the fourth quarter of 2025 was $22.2 million, or 18.6% of revenue, compared to $19.0 million, or 17.7% of revenue, in the comparable period last year.

Structural Systems

Structural Systems reported net revenue for the current quarter of $96.2 million, compared to $90.3 million for the fourth quarter of 2024. The year-over-year increase was primarily due to the following:

•$5.3 million higher revenue within the Company’s military and space end-use markets due to higher rates on selected rotary-wing aircraft and fixed-wing aircraft platforms; and

•$0.5 million higher revenue within the Company’s commercial aerospace end-use markets due to growth in Airbus, partially offset by lower revenues from Boeing on the 737 MAX.

Structural Systems operating income for the current-year fourth quarter was $14.6 million, or 15.2% of revenue, compared to $3.2 million, or 3.6% of revenue, for the fourth quarter of 2024. The year-over-year increase was primarily due to higher manufacturing volume, favorable product mix, and lower restructuring and other one-time charges related to the shutdown of the Company’s Monrovia performance center. Non-GAAP adjusted operating income for the fourth quarter of 2025 was $17.2 million, or 17.8% of revenue, compared to $8.3 million, or 9.2% of revenue, in the comparable period last year.

Corporate General and Administrative (“CG&A”) Expense

CG&A expense for the fourth quarter of 2025 was $22.5 million, or 10.4% of total Company revenue, compared to $11.8 million, or 6.0% of total Company revenue, in the comparable quarter in the prior year. The year-over-year increase in CG&A expenses was primarily due to higher litigation settlement and related costs of $7.6 million, higher stock-based compensation expense of $1.9 million, and higher compensation and benefits costs of $1.3 million, partially offset by lower professional services fees of $0.9 million. Non-GAAP adjusted CG&A expense excluding litigation settlement and related costs for the fourth quarter of 2025 was $14.9 million compared to $11.8 million for the fourth quarter of 2024.

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, February 26, 2026, 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-conf.media-server.com/register/BIf51bd118478b4ed0a4f6689b03110c30

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 Q4 2025 Earnings Presentation available at Ducommun.com.

About Ducommun Incorporated

Ducommun Incorporated is a leading designer and manufacturer of and provider of manufacturing solutions for high-performance products often used in high-cost-of failure applications primarily in the aerospace and defense, industrial, medical, and other industries. 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 its progress towards the financial goals stated in its VISION 2027 strategy, expectations related to the ramp-up in missile production activity serving as a boost for the military and space segment of the Company's defense business in 2026 and beyond, expectations relating to the impact of the current tariff environment on the Company's financial outlook and the Company's progress in mitigating raw materials tariff exposures through duty exemptions or pass-throughs to customers, and expectations relating to the growth of the Company’s commercial aerospace business due to the expected rate ramps and easing of headwinds during the second half of 2026 and beyond. 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: the cyclicality of our end-use markets, the level of U.S. government defense spending, our customers may experience changes in production rates or delays in the launch and certification of new products, timing of orders from our customers which are subject to cancellation, modification or rescheduling, our ability to obtain additional financing and service existing debt to fund capital expenditures and meet our working capital needs, legal and regulatory risks, including pending litigation matters generally and as well as any potential losses arising from third party subrogation claims related to the Guaymas performance center fire that may become material, the cost of expansion, consolidation and acquisitions, competition, economic and geopolitical developments – including supply chain issues, our ability to successfully implement restructuring, realignment and cost reduction activities that could adversely impact our ability to achieve our strategic objectives, international trade restrictions and our ability to obtain necessary U.S. government approvals for proposed sales to certain foreign customers, the impact of tariffs and elevated interest rates, risks associated with a prolonged partial or total U.S. federal government shutdown, the ability to attract and retain key personnel and avoid labor disruptions, the ability to adequately protect and enforce intellectual property rights, pandemics, disasters – natural or otherwise, and risk of cybersecurity attacks 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, February 26, 2026, 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 (benefit), depreciation, amortization, stock-based compensation expense, restructuring charges, professional fees related to unsolicited non-binding acquisition offer, litigation settlement and related costs, net, loss extinguishment of debt, other debt refinancing costs, gain on sale of property and other assets, and inventory purchase accounting adjustments), including as a percentage of net revenues, non-GAAP operating income, including as a percentage of net revenues, non-GAAP net income, non-GAAP diluted earnings per share, non-GAAP cash flow from operating activities, 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 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 may or may not be 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 some of the Company’s programs.

CONTACT:

Suman Mookerji, Senior Vice President, Chief Financial Officer, 657.335.3665

[Financial Tables Follow]

DUCOMMUN INCORPORATED AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Unaudited)

(Dollars In thousands)

						December 31, 2025						December 31, 2024
Assets
Current Assets
Cash and cash equivalents						$	45,289					$	37,139
Accounts receivable, net						124,442						109,716
Contract assets						249,845						200,584
Inventories						182,788						196,881
Production cost of contracts						7,178						6,802
Other current assets						16,435						16,959
Total Current Assets						625,977						568,081
Property and Equipment, Net						107,223						109,812
Operating Lease Right-of-Use Assets						40,077						28,611
Goodwill						244,600						244,600
Intangibles, Net						132,839						149,591
Deferred Income Taxes						15,317						2,239
Other Assets						20,192						23,167
Total Assets						$	1,186,225					$	1,126,101
Liabilities and Shareholders’ Equity
Current Liabilities
Accounts payable						$	74,653					$	75,784
Contract liabilities						40,694						34,445
Accrued and other liabilities						50,934						44,214
Operating lease liabilities						7,817						8,531
Current portion of long-term debt						5,000						12,500
Total Current Liabilities						179,098						175,474
Long-Term Debt, Less Current Portion						298,790						229,830
Non-Current Operating Lease Liabilities						34,223						21,284
Other Long-Term Liabilities						12,004						16,983
Total Liabilities						524,115						443,571
Commitments and Contingencies
Shareholders’ Equity
Common stock						149						148
Additional paid-in capital						235,878						217,523
Retained earnings						419,537						453,475
Accumulated other comprehensive income						6,546						11,384
Total Shareholders’ Equity						662,110						682,530
Total Liabilities and Shareholders’ Equity						$	1,186,225					$	1,126,101

DUCOMMUN INCORPORATED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Quarterly Information Unaudited)

(Dollars in thousands, except per share amounts)

						Three Months Ended												Years Ended
						December 31, 2025						December 31, 2024						December 31, 2025						December 31, 2024
Net Revenues						$	215,798					$	197,292					$	824,730					$	786,551
Cost of Sales						155,993						150,885						603,115						589,286
Gross Profit						59,805						46,407						221,615						197,265
Selling, General and Administrative Expenses						37,557						34,112						144,377						138,610
Restructuring Charges						620						1,896						2,237						6,444
Litigation Settlement and Related Costs, Net						7,630						—						107,305						—
Operating Income (Loss)						13,998						10,399						(32,304)						52,211
Interest Expense						(3,478)						(3,617)						(12,676)						(15,304)
Loss on Extinguishment of Debt						(581)						—						(581)						—
Other Income, Net						—						—						1,746						—
Income (Loss) Before Taxes						9,939						6,782						(43,815)						36,907
Income Tax Expense (Benefit)						2,495						8						(9,877)						5,412
Net Income (Loss)						$	7,444					$	6,774					$	(33,938)					$	31,495
Earnings (Loss) Per Share
Basic earnings (loss) per share						$	0.50					$	0.46					$	(2.27)					$	2.13
Diluted earnings (loss) per share						$	0.48					$	0.45					$	(2.27)					$	2.10
Weighted-Average Number of Common Shares Outstanding
Basic						14,989						14,820						14,942						14,774
Diluted						15,416						15,098						14,942						15,013
Gross Profit %						27.7		%				23.5		%				26.9		%				25.1		%
SG&A %						17.4		%				17.3		%				17.5		%				17.7		%
Operating Income (Loss) %						6.5		%				5.3		%				(3.9)		%				6.6		%
Net Income (Loss) %						3.4		%				3.4		%				(4.1)		%				4.0		%
Effective Tax Rate						25.1		%				0.1		%				22.5		%				14.7		%

DUCOMMUN INCORPORATED AND SUBSIDIARIES

GAAP TO NON-GAAP NET INCOME TO ADJUSTED EBITDA RECONCILIATION

(Unaudited)

(Dollars in thousands)

						Three Months Ended												Years Ended
						December 31, 2025						December 31, 2024						December 31, 2025						December 31, 2024
GAAP net income (loss)						$	7,444					$	6,774					$	(33,938)					$	31,495
Non-GAAP Adjustments:
Interest expense						3,478						3,617						12,676						15,304
Income tax expense (benefit)						2,495						8						(9,877)						5,412
Depreciation						4,053						3,989						16,358						16,328
Amortization						4,409						4,320						17,299						17,110
Stock-based compensation expense (1)(2)						7,009						5,083						24,520						17,836
Restructuring charges (3)						620						2,251						2,237						7,656
Professional fees related to unsolicited non-binding acquisition offer						—						738						—						3,145
Litigation settlement and related costs, net						7,630						—						107,305						—
Loss on extinguishment of debt						581						—						581						—
Other debt refinancing costs						152						—						152						—
Gain on sale of property and other assets						—						—						(1,746)						—
Inventory purchase accounting adjustments						—						524						—						2,269
Adjusted EBITDA						$	37,871					$	27,304					$	135,567					$	116,555
Net income (loss) as a % of net revenues						3.4		%				3.4		%				(4.1)		%				4.0		%
Adjusted EBITDA as a % of net revenues						17.5		%				13.8		%				16.4		%				14.8		%

(1) The three and twelve months ended December 31, 2025 included $1.0 million and $3.0 million, respectively, of stock-based compensation expense for awards with both performance and market conditions that will be settled in cash. The three and twelve months ended December 31, 2024 included $0.9 million and $3.7 million, respectively, of stock-based compensation expense for awards with both performance and market conditions that will be settled in cash.

(2) The three and twelve months ended December 31, 2025 included $0.2 million and $0.5 million, respectively, of stock-based compensation expense recorded as cost of sales. The three and twelve months ended December 31, 2024 included $0.2 million and $0.5 million, respectively, of stock-based compensation expense recorded as cost of sales.

(3) The three and twelve months ended December 31, 2024 included $0.3 million and $1.2 million, respectively, of restructuring charges that were recorded as cost of sales.

DUCOMMUN INCORPORATED AND SUBSIDIARIES

BUSINESS SEGMENT PERFORMANCE

(Unaudited)

(Dollars in thousands)

						Three Months Ended																														Years Ended
						% Change						December 31, 2025						December 31, 2024						% of Net  Revenues 2025						% of Net  Revenues 2024						% Change						December 31, 2025						December 31, 2024						% of Net  Revenues 2025						% of Net  Revenues 2024
Net Revenues
Electronic Systems						11.8		%				$	119,626					$	106,972					55.4		%				54.2		%				7.3		%				$	462,682					$	431,363					56.1		%				54.8		%
Structural Systems						6.5		%				96,172						90,320						44.6		%				45.8		%				1.9		%				362,048						355,188						43.9		%				45.2		%
Total Net Revenues						9.4		%				$	215,798					$	197,292					100.0		%				100.0		%				4.9		%				$	824,730					$	786,551					100.0		%				100.0		%
Segment Operating Income
Electronic Systems												$	21,962					$	18,981					18.4		%				17.7		%										$	82,174					$	73,666					17.8		%				17.1		%
Structural Systems												14,573						3,248						15.2		%				3.6		%										46,417						24,964						12.8		%				7.0		%
												36,535						22,229																								128,591						98,630
Corporate General and Administrative Expenses (1)												(22,537)						(11,830)						(10.4)		%				(6.0)		%										(160,895)						(46,419)						(19.5)		%				(5.9)		%
Total Operating Income (Loss)												$	13,998					$	10,399					6.5		%				5.3		%										$	(32,304)					$	52,211					(3.9)		%				6.6		%
Adjusted EBITDA
Electronic Systems
Operating Income												$	21,962					$	18,981																							$	82,174					$	73,666
Depreciation and Amortization												3,608						3,586																								14,302						14,455
Stock-Based Compensation Expense												111						110																								405						351
Restructuring (Credits) Charges												(101)						(385)																								141						177
												25,580						22,292						21.4		%				20.8		%										97,022						88,649						21.0		%				20.6		%
Structural Systems
Operating Income												14,573						3,248																								46,417						24,964
Depreciation and Amortization												4,751						4,638																								18,933						18,696
Stock-Based Compensation Expense												96						114																								477						375
Restructuring Charges												721						2,636																								2,096						7,479
Inventory Purchase Accounting Adjustments												—						524																								—						2,269
												20,141						11,160						20.9		%				12.4		%										67,923						53,783						18.8		%				15.1		%
Corporate General and Administrative Expenses (1)
Operating loss												(22,537)						(11,830)																								(160,895)						(46,419)
Depreciation and Amortization												103						85																								422						287
Stock-Based Compensation Expense												6,802						4,859																								23,638						17,110
Other Debt Refinancing Costs												152						—																								152						—
Professional Fees related to Unsolicited Non-Binding Acquisition Offer												—						738																								—						3,145
Litigation Settlement and Related Costs, Net												7,630						—																								107,305						—
												(7,850)						(6,148)																								(29,378)						(25,877)
Adjusted EBITDA												$	37,871					$	27,304					17.5		%				13.8		%										$	135,567					$	116,555					16.4		%				14.8		%
Capital Expenditures
Electronic Systems												$	1,712					$	1,958																							$	5,976					$	4,908
Structural Systems												2,243						2,109																								8,515						6,281
Corporate Administration												44						196																								166						3,220
Total Capital Expenditures												$	3,999					$	4,263																							$	14,657					$	14,409

(1)Includes costs not allocated to either the Electronic Systems or Structural Systems operating segments.

DUCOMMUN INCORPORATED AND SUBSIDIARIES

GAAP TO NON-GAAP OPERATING INCOME (LOSS) RECONCILIATION

(Unaudited)

(Dollars in thousands)

						Three Months Ended																								Years Ended
GAAP To Non-GAAP Operating Income						December 31, 2025						December 31, 2024						% of Net  Revenues 2025						% of Net  Revenues 2024						December 31, 2025						December 31, 2024						% of Net  Revenues 2025						% of Net  Revenues 2024
GAAP Operating income (loss)						$	13,998					$	10,399																	$	(32,304)					$	52,211
GAAP Operating income - Electronic Systems						$	21,962					$	18,981																	$	82,174					$	73,666
Adjustments to GAAP operating income - Electronic Systems:
Restructuring (credits) charges						(101)						(385)																		141						177
Amortization of acquisition-related intangible assets						373						373																		1,493						1,493
Total adjustments to GAAP operating income - Electronic Systems						272						(12)																		1,634						1,670
Non-GAAP adjusted operating income - Electronic Systems						22,234						18,969						18.6		%				17.7		%				83,808						75,336						18.1		%				17.5		%
GAAP Operating income - Structural Systems						14,573						3,248																		46,417						24,964
Adjustments to GAAP operating income - Structural Systems:
Restructuring charges						721						2,636																		2,096						7,479
Inventory purchase accounting adjustments						—						524																		—						2,269
Amortization of acquisition-related intangible assets						1,859						1,859																		7,437						7,437
Total adjustments to GAAP operating income - Structural Systems						2,580						5,019																		9,533						17,185
Non-GAAP adjusted operating income - Structural Systems						17,153						8,267						17.8		%				9.2		%				55,950						42,149						15.5		%				11.9		%
GAAP Operating loss - Corporate						(22,537)						(11,830)																		(160,895)						(46,419)
Adjustments to GAAP operating loss - Corporate:
Professional fees related to unsolicited non-binding acquisition offer						—						738																		—						3,145
Other debt refinancing costs						152						—																		152						—
Litigation settlement and related costs, net						7,630						—																		107,305						—
Total adjustments to GAAP operating loss - Corporate						7,782						738																		107,457						3,145
Non-GAAP adjusted operating loss - Corporate						(14,755)						(11,092)																		(53,438)						(43,274)
Total non-GAAP adjustments to GAAP operating income						10,634						5,745																		118,624						22,000
Non-GAAP adjusted operating income						$	24,632					$	16,144					11.4		%				8.2		%				$	86,320					$	74,211					10.5		%				9.4		%

DUCOMMUN INCORPORATED AND SUBSIDIARIES

GAAP TO NON-GAAP NET INCOME AND EARNINGS PER SHARE RECONCILIATION

(Unaudited)

(Dollars in thousands, except per share amounts)

						Three Months Ended												Years Ended
GAAP To Non-GAAP Net Income						December 31, 2025						December 31, 2024						December 31, 2025						December 31, 2024
GAAP net income (loss)						$	7,444					$	6,774					$	(33,938)					$	31,495
Adjustments to GAAP net income (loss):
Restructuring charges						620						2,251						2,237						7,656
Litigation settlement and related costs, net						7,630						—						107,305						—
Gain on sale of property and other assets						—						—						(1,746)						—
Professional fees related to unsolicited non-binding acquisition offer						—						738						—						3,145
Inventory purchase accounting adjustments						—						524						—						2,269
Amortization of acquisition-related intangible assets						2,232						2,232						8,930						8,930
Loss on extinguishment of debt						581						—						581						—
Other debt refinancing costs						152						—						152						—
Total adjustments to GAAP net income before provision for income taxes						11,215						5,745						117,459						22,000
Income tax effect on non-GAAP adjustments (1)						$	(2,426)					$	(1,149)					$	(26,067)					$	(4,400)
Non-GAAP adjusted net income						$	16,233					$	11,370					$	57,454					$	49,095

						Three Months Ended												Years Ended
GAAP Earnings (Loss) Per Share To Non-GAAP Earnings Per Share						December 31, 2025						December 31, 2024						December 31, 2025						December 31, 2024
GAAP Diluted Earnings (Loss) Per Share (“EPS”)						$	0.48					$	0.45					$	(2.27)					$	2.10
Adjustments to GAAP diluted EPS:
Restructuring charges						0.04						0.15						0.15						0.51
Litigation settlement and related costs, net						0.49						—						7.01						—
Gain on sale of property and other assets						—						—						(0.11)						—
Professional fees related to unsolicited non-binding acquisition offer						—						0.05						—						0.21
Inventory purchase accounting adjustments						—						0.03						—						0.15
Amortization of acquisition-related intangible assets						0.14						0.15						0.58						0.59
Loss on extinguishment of debt						0.04						—						0.04						—
Other debt refinancing costs						0.01						—						0.01						$	—
Total adjustments to GAAP diluted EPS before provision for income taxes						0.72						0.38						7.68						1.46
Income tax effect on non-GAAP adjustments (1)						$	(0.15)					$	(0.08)					$	(1.70)					$	(0.29)
Non-GAAP adjusted diluted EPS (2)						$	1.05					$	0.75					$	3.75					$	3.27
GAAP weighted-average shares - basic						14,989						14,820						14,942						14,774
GAAP weighted-average shares - diluted						15,416						15,098						14,942						15,013
Non-GAAP weighted-average shares - diluted (3)						15,416						15,098						15,315						15,013

(1)Includes effective tax rate of 20.0% for both 2025 and 2024 adjustments, except for litigation settlement and related costs, net, which utilized the incremental tax rate of 22.4%.

(2)Non-GAAP adjusted diluted EPS will not foot for the twelve months ended December 31, 2025 as the GAAP net loss per share was calculated using the GAAP weighted-average shares - basic but the adjustments to GAAP diluted EPS and Non-GAAP adjusted diluted EPS were calculated using the Non-GAAP weighted-average shares - diluted.

(3)In periods of GAAP net loss, non-GAAP weighted-average shares differs from GAAP weighted-average shares due to the non-GAAP net income reported.

DUCOMMUN INCORPORATED AND SUBSIDIARIES

GAAP TO NON-GAAP CORPORATE GENERAL AND ADMINISTRATIVE EXPENSE TO

ADJUSTED CORPORATE GENERAL AND ADMINISTRATIVE EXPENSE RECONCILIATION

(Unaudited)

(Dollars in thousands)

						Three Months Ended												Years Ended
						December 31, 2025						December 31, 2024						December 31, 2025						December 31, 2024
GAAP Corporate general and administrative expenses						$	22,537					$	11,830					$	160,895					$	46,419
Non-GAAP Adjustments:
Litigation settlement and related costs, net						(7,630)						—						(107,305)						—
Non-GAAP adjusted corporate general and administrative expenses						$	14,907					$	11,830					$	53,590					$	46,419

DUCOMMUN INCORPORATED AND SUBSIDIARIES

GAAP TO NON-GAAP CASH FLOW FROM OPERATING ACTIVITIES TO

ADJUSTED CASH FLOW FROM OPERATING ACTIVITIES RECONCILIATION

(Unaudited)

(Dollars in thousands)

						Three Months Ended												Years Ended
						December 31, 2025						December 31, 2024						December 31, 2025						December 31, 2024
GAAP net cash (used in) provided by operating activities						$	(74,687)					$	18,424					$	(33,405)					$	34,180
Non-GAAP Adjustments:
Litigation settlement and related costs, net						101,212						—						103,220						—
Non-GAAP adjusted net cash provided by operating activities						$	26,525					$	18,424					$	69,815					$	34,180

DUCOMMUN INCORPORATED AND SUBSIDIARIES

NON-GAAP BACKLOG* BY REPORTING SEGMENT

(Unaudited)

(Dollars in thousands)

						(In thousands)
						December 31, 2025						December 31, 2024
Consolidated Ducommun
Military and space						$	706,546					$	624,785
Commercial aerospace						477,641						415,905
Industrial						18,762						20,129
Total						$	1,202,949					$	1,060,819
Electronic Systems
Military and space						$	517,727					$	459,546
Commercial aerospace						90,031						76,291
Industrial						18,762						20,129
Total						$	626,520					$	555,966
Structural Systems
Military and space						$	188,819					$	165,239
Commercial aerospace						387,610						339,614
Total						$	576,429					$	504,853

* 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 (“RPO”) disclosed under ASC 606 as of December 31, 2025 were $1,106.0 million. The Company defines backlog as 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 December 31, 2025 was $1,202.9 million compared to $1,060.8 million as of December 31, 2024.

Beginning January 1, 2026, Ducommun will no longer disclose backlog information but instead, will be disclosing only RPO as the Company believes it will be more useful to investors in assessing future revenue of the Company.

DUCOMMUN INCORPORATED AND SUBSIDIARIES

NON-GAAP BOOK-TO-BILL RATIO CALCULATION - SUPPLEMENTAL DATA

(Unaudited)

(Dollars in thousands)

						Three Months Ended												Years Ended
						December 31, 2025						December 31, 2024						December 31, 2025						December 31, 2024
Non-GAAP Bookings, net						$	290,617					$	252,798					$	918,145					$	972,457
GAAP Net revenues						215,798						197,292						824,730						786,551
Non-GAAP book-to-bill ratio						1.3						1.3						1.1						1.2

FAQ

How did Ducommun (DCO) perform financially in Q4 2025?

Ducommun posted Q4 2025 net revenue of $215.8 million, up 9.4% year-over-year, with gross margin improving to 27.7%. GAAP net income was $7.4 million ($0.48 per diluted share), while non-GAAP adjusted net income reached $16.2 million, or $1.05 per diluted share.

What were Ducommun’s full-year 2025 results and profitability?

For 2025, Ducommun generated record net revenue of $824.7 million and adjusted EBITDA of $135.6 million, or 16.4% of revenue. A $107.3 million litigation settlement and related costs led to a GAAP net loss of $33.9 million, versus non-GAAP adjusted net income of $57.5 million.

How did litigation costs affect Ducommun (DCO) in 2025?

Litigation settlement and related costs totaled $107.3 million in 2025, significantly impacting profitability and cash flow. These charges turned an otherwise profitable year into a GAAP net loss of $33.9 million and contributed to a Q4 GAAP operating cash outflow of $74.7 million.

What were Ducommun’s non-GAAP earnings and margins in 2025?

Non-GAAP adjusted diluted EPS for 2025 was $3.75, up from $3.27 in 2024. Adjusted EBITDA reached $135.6 million, representing a 16.4% margin versus 14.8% a year earlier, reflecting improved manufacturing volume and favorable product mix across military, space, and commercial aerospace programs.

How strong is Ducommun’s (DCO) backlog and book-to-bill ratio?

Remaining performance obligations were $1.106 billion as of December 31, 2025, with total backlog at $1.203 billion. Q4 2025 non-GAAP bookings were $290.6 million, yielding a book-to-bill ratio of 1.3x, supported mainly by strong missile platform orders.

What drove Ducommun’s segment performance in Q4 2025?

In Q4 2025, Electronic Systems revenue rose to $119.6 million and Structural Systems to $96.2 million. Growth was driven by higher rates on selected fixed-wing and rotary-wing aircraft, missile platforms, and Airbus programs, with both segments expanding operating income and margins year-over-year.

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