Ducommun Incorporated 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, defense, industrial, natural resources, medical
and other industries. Ducommun differentiates itself as a full-service solution-based
provider, offering a wide range of value-added products and services in our
primary businesses of electronics, structures and integrated solutions. We operate
through two primary business units: Ducommun LaBarge Technologies and Ducommun
AeroStructures. We are the successor to a business that was founded in California
in 1849 and reincorporated in Delaware in 1970.
We operate through two primary strategic businesses, Ducommun LaBarge Technologies
(“DLT”) and Ducommun Aerostructures (“DAS”), each of
which is a reportable operating segment. The results of operations among our
operating segments vary due to differences in competitors, customers, extent
of proprietary deliverables and performance. DLT designs, engineers and manufactures
high-reliability products used in worldwide technology-driven markets including
aerospace, defense, natural resources, industrial, and medical and other end-use
markets. DLT’s product offerings primarily range from prototype development
to complex assemblies as discussed in more detail below. DAS designs, engineers
and manufactures large, complex contoured aerospace structural components and
assemblies and supplies composite and metal bonded structures and assemblies.
DAS’s products are primarily used on commercial aircraft, military fixed-wing
aircraft and military and commercial rotary-wing aircraft.
Commercial Aerospace End-Use Market
The commercial aerospace end-use market is highly cyclical and is impacted by
the level of global air passenger traffic in general, which in turn is influenced
by global economic conditions, fleet fuel and maintenance costs and geopolitical
developments. Sales into the commercial aerospace end-use market represented
approximately 33% of our net revenues.
Growth in the world’s gross domestic product (“GDP”) is a
contributor to global air passenger traffic expansion. Emerging economies in
Asia, the Middle East and Latin America, where the GDP per capita expands at
a faster rate than the developed markets, are contributing to the growth rate
for new commercial aircraft. The demand for air travel is also expected to be
influenced by a cyclical rebound and improvement in the economies of the more
mature markets of Europe and North America.
Fuel performance has been and will continue to be an increasingly important
component of the commercial airlines’ profitability and will continue
to be driving demand for newer, more fuel efficient engine designs. Market acceptance
is growing for these types of more fuel efficient aircraft from The Boeing Company
(“Boeing”) and Airbus Group, formerly known as the European Aeronautic,
Defense & Space Company (“EADS”), through their wholly owned
subsidiary Airbus (“Airbus”). Replacement of aging fleets due to
increasing costs of maintenance or obsolescence and availability of newer, more
efficient aircraft also influences commercial aircraft build rates, but to a
lesser degree.
Defense End-Use Market
Our defense end-use market includes products used in military and space, including
technologies and structures applications. The defense end-use market is highly
cyclical and is impacted by the level of government defense spending. Government
defense spending is impacted by national defense policies and priorities, political
climates, fiscal budgetary constraints, U.S. Federal budget deficits, projected
economic growth and the level of global military or security threats, or other
conflicts. Sales into the military and space end-use market represented approximately
49% of our net revenues.
We derive a significant portion of our business from customers whose principal
sales are to the U.S. Government and from direct sales by us to the U.S. Government.
3.23% 
57.51 %