LOS ANGELES Ducommun Inc.
said stretchouts, rather than outright defunding, are a more
likely result of the U.S. federal budget sequestration,
although the company is taking a wait-and-see approach.
The Los Angeles-based
manufacturer of aerospace, defense and industrial products
believes the fallout from the current taxation and spending
impasse between Congress and the Obama administration "will
play out over the next several months," and its "too
early for us to discern any potential impact on our defense
business going forward," chairman, president and chief
executive officer Anthony J. Reardon said during a March 4
conference call with securities analysts to discuss the
companys fourth-quarter and full-year earnings.
doesnt expect work in Ducommuns end-of-year backlog
of $657 million to be "cut or defunded," whats more
likely is that "some of those programs are moved to the right,"
or stretched outfor example, Sikorsky Aircraft
Corp.s Black Hawk helicopter.
Military and aerospace business
accounted for 51 percent of Ducommuns revenues last year,
he said. That business included such programs as the Black
Hawk, Boeing Co.s AH-64 Apache helicopter and F-15
fighter, and missile defense programs.
Reardon said Ducommun was "very
disappointed in the lack of effort in Washington" to resolve
the countrys budget issues.
Ducommun posted fourth-quarter
net income of nearly $3.44 million in contrast to a net loss of
$48.49 million in the same period a year earlier, when it
incurred pre-tax merger-related expenses of $3.2 million and a
pre-tax non-cash goodwill impairment charge of $54.3 million.
Fourth-quarter sales increased 3 percent to $193.89 million,
driven primarily by military helicopter, military fixed-wing
and large commercial aircraft products.
Full-year net income of nearly
$16.44 million was in sharp contrast to a $47.58-million net
loss in 2011 as sales jumped 28.6 percent to $747.04
AeroStructures segment, whose specialties include titanium
parts and components, posted fourth-quarter net earnings of
$7.22 million, more than double earnings of $3.39 million a
year earlier on sales that climbed 19.3 percent to $82.15
million from $68.87 million.
The segments full-year
operating earnings increased 11.6 percent to $28.79 million
from $25.8 million in 2011 on sales that rose 5.9 percent to
$309.98 million from $292.76 million.
Reardon, who is also acting
president of Ducommun AeroStructures, told analysts that the
company expects corporate sales to be flat in 2013, or "at
least through the first half," due to the timing of some
programs booked later in the year and an expected decline in
build rates in other programs as the war in Afghanistan winds
Ducommuns military and
space backlog totaled $370 million at the end of 2012, up 4
percent from a year earlier, Reardon said.
aerospaces share of the backlog was smaller at $230
million, it nevertheless represented a 19-percent
year-over-year gain and is expected to grow further in 2013, he
told analysts, although he acknowledged that the regional jet
and general aviation markets, which declined substantially last
year, remain weak.