Ducommun Inc. Files 2023 Annual Report on Form 10-K

TL;DR

<b>Ducommun Inc. has filed its 2023 10-K report detailing its financial performance and business operations for the fiscal year ending December 31, 2023.</b>

AI Summary

DUCOMMUN INC /DE/ (DCO) filed a Annual Report (10-K) with the SEC on February 22, 2024. Ducommun Inc. filed its 2023 Form 10-K on February 22, 2024, reporting on its fiscal year ending December 31, 2023. The company is incorporated in Delaware and operates in the Aircraft Part & Auxiliary Equipment sector. Its principal business address is located at 200 Sandpointe Avenue, Suite 700, Santa Ana, CA 92707. The filing includes financial data for the fiscal years 2021, 2022, and 2023. Key segments mentioned include Electronic Systems, Structural Systems, and BLR Aerospace.

Why It Matters

For investors and stakeholders tracking DUCOMMUN INC /DE/, this filing contains several important signals. This 10-K filing provides a comprehensive overview of Ducommun's financial health, operational segments, and strategic positioning within the aerospace and defense industry for the past fiscal year. Investors and analysts can use this report to assess the company's performance, identify trends, and evaluate potential risks and opportunities moving forward.

Risk Assessment

Risk Level: medium — DUCOMMUN INC /DE/ shows moderate risk based on this filing. The filing is a standard 10-K, which is a routine annual report. While it contains detailed financial information, it does not indicate any immediate or severe financial distress or significant new risks beyond those typically associated with publicly traded companies in the aerospace sector.

Analyst Insight

Review the detailed financial statements and segment performance within the 10-K to understand Ducommun's revenue drivers and profitability trends for 2023.

Key Numbers

• 2023-12-31 — Fiscal Year End (Conformed period of report)
• 2024-02-22 — Filing Date (Filed as of date)
• 2023 — Fiscal Year (Reporting period)
• 2022 — Prior Fiscal Year (Comparative financial data)
• 2021 — Prior Fiscal Year (Comparative financial data)

Key Players & Entities

• DUCOMMUN INC /DE/ (company) — Filer name
• DCO (company) — Ticker symbol
• 20231231 (date) — Conformed period of report
• 20240222 (date) — Filed as of date
• 3728 (industry_code) — Standard Industrial Classification
• DE (jurisdiction) — State of incorporation
• SANTA ANA (location) — Business address city
• BLR Aerospace (company) — Business segment

FAQ

Industry Context

Ducommun Inc. operates within the aerospace and defense industry, supplying components and services to manufacturers of aircraft, missiles, and space systems.

Regulatory Implications

As a publicly traded company, Ducommun Inc. is subject to the reporting requirements of the Securities and Exchange Commission (SEC), including the annual filing of Form 10-K.

What Investors Should Do

1. Analyze the full financial statements for the fiscal year ended December 31, 2023, to understand revenue, expenses, and profitability.
2. Examine the details of each business segment (Electronic Systems, Structural Systems, BLR Aerospace) to assess their individual contributions and growth.
3. Review any disclosed risk factors and management's discussion and analysis (MD&A) for insights into the company's challenges and strategies.

Year-Over-Year Comparison

This filing is the annual 10-K report for the fiscal year 2023, providing a comprehensive update compared to previous filings.

Key Financial Figures

• $115.0 m — atforms. The initial purchase price was $115.0 million, net of cash acquired. We paid a
• $117.0 million — acquired. We paid a gross aggregate of $117.0 million in cash upon the closing of the transac
• $23.3 billion — is estimating industry-wide profits of $23.3 billion for 2023, an increase from its forecast
• $4.6 billion — 2023, an increase from its forecast of $4.6 billion a year ago. For 2024, IATA is forecasti
• $25.7 billion — year ago. For 2024, IATA is forecasting $25.7 billion in profits for the industry globally. T

Filing Documents

• dco-20231231.htm (10-K) — 2217KB
• exhibit4_1descriptionducom.htm (EX-4.1) — 34KB
• exhibit19_1insidertradingp.htm (EX-19.1) — 14KB
• dco10-k2023_ex21.htm (EX-21) — 13KB
• dco10-k2023_ex23.htm (EX-23) — 3KB
• dco10-k2023_ex31x1.htm (EX-31.1) — 10KB
• dco10-k2023_ex31x2.htm (EX-31.2) — 10KB
• dco10-k2023_ex32.htm (EX-32) — 10KB
• exhibit97_1clawbackpolicyx.htm (EX-97.1) — 10KB
• dco-20231231_g1.jpg (GRAPHIC) — 59KB
• dco-20231231_g2.jpg (GRAPHIC) — 76KB
• dco-20231231_g3.jpg (GRAPHIC) — 77KB
• 0001628280-24-006363.txt (&nbsp;) — 13456KB
• dco-20231231.xsd (EX-101.SCH) — 85KB
• dco-20231231_cal.xml (EX-101.CAL) — 144KB
• dco-20231231_def.xml (EX-101.DEF) — 425KB
• dco-20231231_lab.xml (EX-101.LAB) — 1122KB
• dco-20231231_pre.xml (EX-101.PRE) — 739KB
• dco-20231231_htm.xml (XML) — 2112KB

Forward-Looking Statements and Risk Factors

Forward-Looking Statements and Risk Factors 3

Risk Factors

Item 1A. Risk Factors 10

Unresolved Staff Comments

Item 1B. Unresolved Staff Comments 22

Cybersecurity

Item 1C. Cybersecurity 22

Properties

Item 2. Properties 23

Legal Proceedings

Item 3. Legal Proceedings 23

Mine Safety Disclosures

Item 4. Mine Safety Disclosures 23 PART II

Market for the Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Item 5. Market for the Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 24

[Reserved]

Item 6. [Reserved] 24

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 25

Quantitative and Qualitative Disclosures About Market Risk

Item 7A. Quantitative and Qualitative Disclosures About Market Risk 38

Financial Statements and Supplementary Data

Item 8. Financial Statements and Supplementary Data 38

Changes in and Disagreements With Accountants on Accounting and Financial Disclosures

Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosures 38

Controls and Procedures

Item 9A. Controls and Procedures 38

Other Information

Item 9B. Other Information 40

Disclosure Regarding Foreign Jurisdictions That Prevent Inspections

Item 9C. Disclosure Regarding Foreign Jurisdictions That Prevent Inspections 40 PART III

Directors, Executive Officers and Corporate Governance

Item 10. Directors, Executive Officers and Corporate Governance 41

Executive Compensation

Item 11. Executive Compensation 41

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 41

Certain Relationships and Related Transactions, and Director Independence

Item 13. Certain Relationships and Related Transactions, and Director Independence 42

Principal Accountant Fees and Services

Item 14. Principal Accountant Fees and Services 42 PART IV

Exhibits and Financial Statement Schedules

Item 15. Exhibits and Financial Statement Schedules 43

Form 10-K Summary

Item 16. Form 10-K Summary 86

Signatures

Signatures 86 2 Table of Contents

FORWARD-LOOKING STATEMENTS AND RISK FACTORS

FORWARD-LOOKING STATEMENTS AND RISK FACTORS This Annual Report on Form 10-K ("Form 10-K") contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be preceded by, followed by or include words such as "could," "may," "believe," "expect," "anticipate," "plan," "estimate," "expect," "would," or similar expressions. These statements are based on the beliefs and assumptions of our management at the time such statements are made. Generally, forward-looking statements include information concerning our possible or assumed future actions, events or results of operations. Forward-looking statements specifically include, without limitation, the information in this Form 10-K regarding: future sales, earnings, cash flow, revenue recognition, uses of cash and other measures of financial performance, projections or expectations for future operations, including costs to complete contracts, goodwill impairment evaluations, useful life of intangible assets, unrecognized tax benefits and effective tax rate, environmental remediation costs, insurance recoveries, industry trends and expectations, including ramp up times for build rates, our plans with respect to restructuring activities, capital expenditures, completed acquisitions, future acquisitions and dispositions, and expected business opportunities that may be available to us. Although we believe that the expectations reflected in the forward-looking statements are based on reasonable assumptions, these forward-looking statements are subject to numerous factors, risks and uncertainties that could cause actual outcomes and results to be materially different from those projected. We cannot guarantee future results, performance or achievements. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements. All written and oral forward-looking statements made in connection wit

BUSINESS

ITEM 1. BUSINESS GENERAL Ducommun Incorporated ("Ducommun," "the Company," "we," "us" or "our") is a leading global provider of engineering and manufacturing services for high-performance products and high-cost-of failure applications used primarily in the aerospace and defense ("A&D"), industrial, medical and other industries (collectively, "Industrial"). Ducommun differentiates itself as a full-service solution-based provider, offering innovative, value-added proprietary products and manufacturing solutions to our customers in our primary businesses of electronics, structures, and integrated solutions. We operate through two primary business segments: Electronic Systems and Structural Systems. We are the successor to a business that was founded in California in 1849 and reincorporated in Delaware in 1970. ACQUISITIONS Acquisitions have been an important element of our growth strategy. We have supplemented our organic growth by identifying, acquiring and integrating acquisition opportunities that result in broader, more sophisticated product and service offerings while diversifying and expanding our customer base and markets. For example, on April 25, 2023, we acquired 100% of the outstanding equity interests of BLR Aerospace L.L.C. ("BLR"), a privately-held leading provider of aerodynamic systems that enhance the productivity, performance, and safety of rotary and fixed-wing aircraft on commercial and military platforms. The initial purchase price was $115.0 million, net of cash acquired. We paid a gross aggregate of $117.0 million in cash upon the closing of the transaction. We utilized the 2022 Revolving Credit Facility (as defined below) to complete the acquisition. The acquisition of BLR adds to our strategy to diversify and offer more customized, value-driven engineered products with aftermarket opportunities, and was included in our Structural Systems segment. PRODUCTS AND SERVICES Business Segment Information We operate through two primary strategic

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View this 10-K filing on SEC EDGAR