• Revenue: $194.1 million, a 1.7% increase over the prior year.

• Gross Margin: 26.6%, up 200 basis points year-over-year.

• Adjusted Operating Income Margin: 9.9%, a 90 basis point improvement from the prior year.

• Adjusted EBITDA: 15.9% of sales, up $3.5 million from the prior year.

• GAAP Diluted EPS: $0.69 per share, compared to $0.46 per share in Q1 2024.

• Adjusted Diluted EPS: $0.83 per share, compared to $0.70 per share in the prior-year quarter.

• Consolidated Backlog: $1.05 billion, an $8 million increase year-over-year.

• Defense Backlog: $620 million, up over $50 million compared to the prior-year quarter.

• Commercial Aerospace Revenue: Declined 10% year-over-year to $72 million.

• Military and Space Revenue: $114 million, a 15% increase over Q1 2024.

• Cash Flow from Operating Activities: $0.8 million, an improvement from a use of $1.6 million in Q1 2024.

• Interest Expense: $3.3 million, down from $3.9 million in Q1 2024.

• Warning! GuruFocus has detected 3 Warning Signs with DCO.

Release Date: May 06, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Ducommun Inc (NYSE:DCO) reported Q1 2025 sales of $194.1 million, marking the 16th consecutive quarter of year-over-year revenue growth.

• The company's gross margin reached a new quarterly record of 26.6%, up 200 basis points from the previous year.

• Military and space revenue grew by 15% year-over-year, driven by strong growth in missile and electronic warfare programs.

• Ducommun Inc (NYSE:DCO) achieved a record adjusted EBITDA margin of 15.9% of sales, reflecting strong operational performance.

• The company's backlog remains robust at $1.05 billion, with a significant increase in the defense backlog.

Negative Points

• Commercial Aerospace revenue declined by 10% in Q1 2025, marking the first decline in 15 quarters.

• The company faces challenges from destocking at major customers like Boeing and Spirit AeroSystems.

• Ducommun Inc (NYSE:DCO) continues to strategically prune its non-core industrial business, impacting short-term revenue.

• The company is experiencing some headwinds in the in-flight entertainment segment, which is expected to remain soft.

• There are ongoing restructuring costs associated with facility consolidations, which are expected to continue into late 2025.

Q & A Highlights

Q: How would you characterize any delay in when your shipset rates to Boeing and Spirit would increase if Boeing does get production up to 38 a month? A: We are seeing rates from Boeing in the low 20s and from Spirit ramping up to the mid- to high 20s. Boeing is likely producing in the low 30s currently. Despite some destocking impact, we are optimistic about continued growth in demand and expect Boeing to reach a rate of 38 by the end of this year. (Suman Mookerji, CFO)