Ducommun Q2 2015 net revenue drops YoY

Ducommun Inc. (NYSE: DCO) said its net revenue for the second quarter of 2015 was USD174.8 million compared to USD186.5 million for the second quarter of 2014.

The net revenue decrease year-over-year primarily reflects 16.9 percent lower revenue in the company´s military and space end-use markets and 4.3 percent lower revenue in the company´s non-aerospace and defense end-use markets, partially offset by 9.4 percent higher revenue in the company´s commercial aerospace end-use markets, the company said.

The net income for the second quarter of 2015 was USD1.8 million, or USD0.16 per diluted share compared to USD6.6 million, or USD0.60 per diluted share, for the second quarter of 2014. The lower net income for the second quarter of 2015 was primarily due to lower revenue, loss of efficiencies resulting from lower manufacturing volume, loss on extinguishment of debt, unfavorable product mix, and higher forward loss reserves, partially offset by lower income tax expense, lower compensation and benefit costs, insurance recoveries related to property and equipment, and lower interest expense.

The current quarter effective income tax rate was 41.8 percent compared to an effective income tax rate of 32.6 percent for the comparable prior year´s quarter.

Operating income for the second quarter of 2015 was USD10.8 million, or 6.2 percent of revenue, compared to USD16.8 million, or 9.0 percent of revenue, in the comparable period last year. The decrease in operating income in the second quarter of 2015 was primarily due to lower revenue, loss of efficiencies resulting from lower manufacturing volume, unfavorable product mix, and higher forward loss reserves, partially offset by lower compensation and benefit costs.

During the three months ended July 4, 2015, the company recorded a USD2.8 million loss on extinguishment of debt as part of paying off the existing senior secured term loan and USD1.5 million of other income for insurance recoveries related to property and equipment and none in the comparable prior year period.

Founded in 1849, Ducommun provides engineering and manufacturing services to the aerospace, defense, and other industries through a wide spectrum of electronic and structural applications. It is an established supplier of critical components and assemblies for commercial aircraft and military and space vehicles as well as for the energy market, medical field, and industrial automation.