Ducommun Incorporated · NYSE:DCO
Ducommun — Investor Presentation (August 2017)
18 slides from Ducommun's investor presentation, August 2017
Slide 1: Investor Presentation
Investor Presentation August 2017
Slide 2: Disclosures
Disclosures Forward-Looking Statements: This presentation 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 the words “believes,” “expects,” “anticipates,” “intends,”
Slide 3: Company Snapshot
Company Snapshot Manufacturer of complex electronics and structural systems for commercial aircraft, military and space programs, and industrial applications Strategically positioned on Commercial aerospace Defense spending has key platforms: Boeing backlog and build rates stabilized in strategic 73
Slide 4: Investment Highlights
Investment Highlights • Unique, sought-after range of capabilities Defendable • Established relationships with blue-chip industry leaders Niche • Strategically positioned on key commercial aerospace and defense platforms • Strong cash flow to reduce debt and fund long-term growth Improving • Focused
Slide 5: Two Business Segments – Revenues
Two Business Segments – Revenues Structural Systems (43% of LTM Q2 2017 Revenues) LTM Q2 2017 Revenues 24% $552.3 million 10% 76% 45% 45% Electronic Systems (57% of LTM Q2 2017 Revenues) 17% Military and Commercial Industrial 21% Space Aerospace 62% 5
Slide 6: Backlog Supports Focus on Aerospace and Defense Strategy
Backlog Supports Focus on Aerospace and Defense Strategy Structural Systems (57% of Total Backlog) Total Backlog at July 1, 2017 15% $610.6 million 5% 85% 40% 55% Electronic Systems (43% of Total Backlog) 12% Military and Commercial 16% Industrial Space Aerospace 72% 6
Slide 7: We Go to Market as One Company with Broad Capabilities
We Go to Market as One Company with Broad Capabilities Each SBU is built on a unique set of competencies Strategic Business Units Electronic Systems Structural Systems Circuit Electronic Bonded Structural Structural Interconnect Board Integrated Component Assembly Systems Solutions Solutions Solutio
Slide 8: Expansive Footprint on Commercial and Military Fixed Wing Aircraft
Expansive Footprint on Commercial and Military Fixed Wing Aircraft Trends helping to drive significant long-term growth opportunities in aerospace segment: • OEM/Tier 1 outsourcing and supplier consolidation • Expansion of titanium capabilities and content • Strategically positioned on key platforms
Slide 9: Expansive Footprint on Commercial and Military Rotary Aircraft
Expansive Footprint on Commercial and Military Rotary Aircraft Trends helping to drive significant long-term growth opportunities in defense segment: • Supplier consolidation favors larger suppliers • Increasing defense budget with solid funding on missile platforms • Platform upgrades • Foreign mil
Slide 10: Diverse Content on Key Missile Platforms Land, Sea and Air
Diverse Content on Key Missile Platforms Land, Sea and Air 10
Slide 11: Macro Trends
Macro Trends Historical Defense Spending(1) Post-Korea Post-Vietnam Post-Cold War Current Peak-Trough Peak-Trough Peak-Trough Peak-Trough Total Active Military Troops (In Thousands) (43%) (32%) (35%) (25%) 900 4,000 DoD Budget Authority ($bn) 800 3,500 700 3,000 600 2,500 500 2,000 400 1,500 300 200
Slide 12: Where Our Growth Will Come From
Where Our Growth Will Come From % of LTM Q2 % of 2017 Backlog at Growth Revenue 7/1/17 Key Platforms Outlook Commentary Boeing 737, 737 MAX Commercial & 787 Dreamliner Aircraft and engine OEM build rates Aerospace 45% 55% Airbus A320, A320neo, and shipset gains support growth A330 & A350 4-6% throug
Slide 13: Why We Win
Why We Win Innovative, value-added solutions for tough technical challenges (e.g., temperature, weight, vibration, pressure) Diverse product capabilities – customers want fewer, more sophisticated supplier-partners Agile, flexible and adaptable Electronics and structural integration capabili
Slide 14: Why to Invest in Ducommun
Why to Invest in Ducommun • Defendable niche – Unique range of capabilities are in demand – Long-term relationships with broad base of blue-chip customers • Well-positioned in large, growing A&D markets – Strategically positioned on key platforms • Transformation into higher margin innovative soluti
Slide 15: Appendix
Appendix =) Ducommun
Slide 16: Key Facts
Key Facts Ducommun Incorporated Exchange/Ticker NYSE: DCO Share price(1) $28.96 52-week high/low(1) $35.58/$18.70 Diluted shares outstanding(2) 11.5 million Market cap(1) $326.4 million Cash(2) $7.4 million Net debt outstanding(2) $164.8 million Enterprise value $491.2 million LTM Q2 2017 pro forma
Slide 17: Non-GAAP Financial Measures
Non-GAAP Financial Measures Note Regarding Non-GAAP Financial Information: This presentation contains non-GAAP financial measures, including Adjusted EBITDA (which excludes interest expense, income tax expense (benefit), depreciation, amortization, stock-based compensation expense, net gain on dives
Slide 18: Consolidated EBITDA for LTM Q2 2017
Consolidated EBITDA for LTM Q2 2017 (dollars in thousands) Net income $ 13,788 Interest expense 7,440 Income tax expense (benefit) 5,356 Depreciation 13,241 Amortization 9,818 Stock-based compensation 4,186 Gain on divestitures (w.c. adj in Q4) 1,211 Consolidated EBITDA $ 55,040 18