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Table of Contents

FORM 10-Q

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

x

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES AND EXCHANGE ACT OF 1934

For the quarterly period ended September 28, 2002

OR

o

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period form __________ to __________

Commission File Number 1-8174

 

DUCOMMUN INCORPORATED

 

 

 

 

(Exact name of registrant as specified in its charter)

 

 

 

 

 

Delaware

 

 

 

95-0693330

 

 

 

 

 

 

(State or other jurisdiction of incorporation or organization)

 

I.R.S. Employer Identification No.

 

 

 

 

111 W. Ocean Boulevard, Suite 900, Long Beach, California 90802

 

 

 

 

(Address of principal executive offices)                                         (Zip Code)

 

 

 

 

 

(562) 624-0800

 

 

 

 

(Registrant’s telephone number, including area code)

 

 

 

 

 

 

 

(Former name, former address and former fiscal year, if changed since last report)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes

x

No

o

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.  As of September 28, 2002, there were outstanding 9,863,885 shares of common stock.

Table of Contents

DUCOMMUN INCORPORATED
FORM 10-Q
INDEX

 

 

Page

 

 

Part I.

Financial Information

 

 

 

 

 

Item 1.

Financial Statements

 

 

 

 

 

 

 

Consolidated Balance Sheets at September 28, 2002 and December 31, 2001

3

 

 

 

 

 

 

Consolidated Statements of Income for Three Months Ended September 28, 2002 and September 29, 2001,

4

 

 

 

 

 

 

Consolidated Statements of Income for Nine Months Ended September 28, 2002 and September 29, 2001

5

 

 

 

 

 

 

Consolidated Statements of Cash Flows for Nine Months Ended September 28, 2002 and September 29, 2001,

6

 

 

 

 

 

 

Notes to Consolidated Financial Statements

7 - 12

 

 

 

 

 

Item 2.

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

13 - 24

 

 

 

 

 

Item 3.

Quantitative and Qualitative Disclosure About Market Risk

25

 

 

 

 

 

Item 4.

Controls and Procedures

25

 

 

 

Part II.

Other Information

 

 

 

 

 

 

Item 6.

Exhibits and Reports on Form 8-K

26

 

 

 

Signatures

27

 

 

Certifications

28 - 29
-2-

Table of Contents

PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

DUCOMMUN INCORPORATED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)

 

 

September 28,
2002

 

December 31,
2001

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

135

 

$

2,414

 

 

Accounts receivable (less allowance for doubtful accounts of $406 and $366)

 

 

24,213

 

 

27,975

 

 

Inventories

 

 

43,084

 

 

43,436

 

 

Deferred income taxes

 

 

6,281

 

 

5,664

 

 

Prepaid income taxes

 

 

79

 

 

134

 

 

Other current assets

 

 

4,301

 

 

3,753

 

 

Assets of discontinued operation held for sale

 

 

2,971

 

 

7,980

 

 

 

 

 

 

 

Total Current Assets

 

 

81,064

 

 

91,356

 

Property, Plant and Equipment, Net

 

 

63,020

 

 

66,298

 

Deferred Income Taxes

 

 

1,468

 

 

160

 

Goodwill (Net of Accumulated Amoritzation of $10,996 and $10,996)

 

 

55,532

 

 

55,532

 

Other Assets

 

 

2,426

 

 

2,729

 

 

 

 

 

 

 

$

203,510

 

$

216,075

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

 

 

Current portion of long-term debt

 

$

1,956

 

$

3,160

 

 

Accounts payable

 

 

14,726

 

 

17,023

 

 

Accrued liabilities

 

 

24,455

 

 

23,909

 

 

Liabilities of discontinued operation held for sale

 

 

1,387

 

 

1,445

 

 

 

 

 

 

 

Total Current Liabilities

 

 

42,524

 

 

45,537

 

Long-Term Debt, Less Current Portion

 

 

31,331

 

 

49,138

 

Deferred Income Taxes

 

 

2,688

 

 

2,688

 

Other Long-Term Liabilities

 

 

4,403

 

 

4,110

 

 

 

 

 

 

Total Liabilities

 

 

80,946

 

 

101,473

 

 

 

 

 

Commitments and Contingencies

 

 

 

 

 

 

 

Shareholders’ Equity:

 

 

 

 

 

 

 

 

Common stock -- $.01 par value; authorized 35,000,000 shares; issued 9,863,885 shares in
   2002 and 9,695,458 shares in 2001

 

 

99

 

 

97

 

 

Additional paid-in capital

 

 

37,909

 

 

35,913

 

 

Retained earnings

 

 

84,556

 

 

78,592

 

 

 

 

 

 

 

Total Shareholders’ Equity

 

 

122,564

 

 

114,602

 

 

 

 

 

 

 

 

$

203,510

 

$

216,075

 

 

 

 

 

Data above have been reclassified to reflect Brice Manufacturing Company, Inc., as a discontinued operation.

See accompanying notes to consolidated financial statements.

-3-

Table of Contents

DUCOMMUN INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)

 

 

For Three Months Ended

 

 

 

 

 

 

September 28,
2002

 

September 29,
2001

 

 

 

 

 

Net Sales

 

$

51,403

 

$

63,857

 

Operating Costs and Expenses:

 

 

 

 

 

 

 

 

Cost of goods sold

 

 

42,250

 

 

48,091

 

 

Selling, general and administrative expenses

 

 

4,589

 

 

6,553

 

 

Goodwill amortization expense

 

 

—  

 

 

1,168

 

 

 

 

 

 

 

Total Operating Costs and Expenses

 

 

46,839

 

 

55,812

 

 

 

 

 

Operating Income

 

 

4,564

 

 

8,045

 

Interest Expense

 

 

(360

)

 

(977

)

 

 

 

 

Income from Continuing Operations Before Taxes

 

 

4,204

 

 

7,068

 

Income Tax Expense

 

 

(1,514

)

 

(2,686

)

 

 

 

 

Income from Continuing Operations

 

 

2,690

 

 

4,382

 

Loss From Discontinued Operation, Net of Tax

 

 

(603

)

 

(593

)

 

 

 

 

Net Income

 

$

2,087

 

$

3,789

 

 

 

 

 

Basic Earnings Per Share:

 

 

 

 

 

 

 

 

Continuing operations

 

$

0.27

 

$

0.45

 

 

Discontinued operation

 

 

(0.06

)

 

(0.06

)

 

 

 

 

 

 

Basic earnings per share

 

$

0.21

 

$

0.39

 

 

 

 

 

Diluted Earnings Per Share:

 

 

 

 

 

 

 

 

Continuing operations

 

$

0.27

 

$

0.45

 

 

Discontinued operation

 

 

(0.06

)

 

(0.06

)

 

 

 

 

 

 

Diluted earnings per share

 

$

0.21

 

$

0.39

 

 

 

 

 

Weighted Average Number of Common Shares Outstanding:

 

 

 

 

 

 

 

 

Basic

 

 

9,852

 

 

9,680

 

 

Diluted

 

 

10,055

 

 

9,769

 

Data above have been reclassified to reflect Brice Manufacturing Company, Inc., as a discontinued operation.

See accompanying notes to consolidated financial statements.

-4-

Table of Contents

DUCOMMUN INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)

 

 

For Nine Months Ended

 

 

 

 

 

 

September 28,
2002

 

September 29,
2001

 

 

 

 

 

Net Sales

 

$

162,183

 

$

155,283

 

Operating Costs and Expenses:

 

 

 

 

 

 

 

 

Cost of goods sold

 

 

127,220

 

 

115,169

 

 

Selling, general and administrative expenses

 

 

19,053

 

 

18,298

 

 

Goodwill amortization expense

 

 

—  

 

 

2,442

 

 

 

 

 

 

 

Total Operating Costs and Expenses

 

 

146,273

 

 

135,909

 

 

 

 

 

Operating Income

 

 

15,910

 

 

19,374

 

Interest Expense

 

 

(1,342

)

 

(1,883

)

 

 

 

 

Income from Continuing Operations Before Taxes

 

 

14,568

 

 

17,491

 

Income Tax Expense

 

 

(5,245

)

 

(6,646

)

 

 

 

 

Income From Continuing Operations

 

 

9,323

 

 

10,845

 

Loss From Discontinued Operation, Net of Tax

 

 

(1,034

)

 

(766

)

Cumulative Effect of Accounting Change, Net of Tax

 

 

(2,325

)

 

—  

 

 

 

 

 

Net Income

 

$

5,964

 

$

10,079

 

 

 

 

 

Basic Earnings Per Share:

 

 

 

 

 

 

 

 

Continuing operations

 

$

0.95

 

$

1.12

 

 

Discontinued operation

 

 

(0.10

)

 

(0.08

)

 

Cumulative effect of accounting change

 

 

(0.24

)

 

—  

 

 

 

 

 

 

Basic earnings per share

 

$

0.61

 

$

1.04

 

 

 

 

 

Diluted Earnings Per Share:

 

 

 

 

 

 

 

 

Continuing operations

 

$

0.94

 

$

1.11

 

 

Discontinued operation

 

 

(0.10

)

 

(0.08

)

 

Cumulative effect of accounting change

 

 

(0.24

)

 

—