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Here are 1-3 brief analogies to describe Ducommun (DCO):

• Like a highly specialized, B2B version of Foxconn, building critical high-performance components and electronic systems for aerospace, defense, and industrial equipment, rather than consumer electronics.
• Similar to how Magna International supplies a wide range of components for the automotive industry, Ducommun provides critical, highly engineered parts and assemblies for aerospace, defense, and industrial customers.

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• Aerostructures: Manufactures complex structural components, assemblies, and kitting solutions for commercial and military aircraft.
• Electronic Systems: Provides high-reliability interconnect solutions, radio frequency (RF) products, and integrated electronic assemblies for aerospace and defense applications.

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Ducommun (DCO) sells primarily to other companies (Business-to-Business, or B2B), serving original equipment manufacturers (OEMs) and tiered suppliers in the aerospace, defense, and industrial markets.

Based on their 2023 annual report (10-K filing), major customers include:

• The Boeing Company (NYSE: BA)
• Northrop Grumman Corporation (NYSE: NOC)
• RTX Corporation (NYSE: RTX) (formerly Raytheon Technologies)
• Lockheed Martin Corporation (NYSE: LMT)
• Airbus S.A.S. (EPA: AIR)
• Spirit AeroSystems, Inc. (NYSE: SPR)

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Stephen G. Oswald, Chairman, President & Chief Executive Officer

Mr. Oswald has been the President, Chief Executive Officer, and Chairman of Ducommun since 2018, having joined the company in 2017. He has over 35 years of experience in both large-cap multinational public companies and private equity. Prior to Ducommun, he served as Chief Executive Officer at Capital Safety Corporation from 2012 to 2015, which was a Kohlberg, Kravis and Roberts (KKR) private equity portfolio company. He built and sold Capital Safety to the 3M company in 2015 for $2.5 billion. Before that, he held various leadership roles at United Technologies Corporation (now RTX), including President of the Hamilton Sundstrand Industrial division. Mr. Oswald began his career at GE and also worked for Hoechst Celanese.

Suman Mookerji, Senior Vice President, Chief Financial Officer, Controller & Treasurer

Mr. Mookerji has served as Senior Vice President, Chief Financial Officer, Controller, and Treasurer of Ducommun since May 2023. Before this role, he held positions at Ducommun as Vice President of Corporate Development and Investor Relations from November 2021 to May 2023, and Vice President of Strategy, Acquisitions and Integration from 2017 to 2021. Previously, he held leadership roles at United Technologies Corporation.

Laureen S. Gonzalez, Vice President, Chief Human Resources Officer

Ms. Gonzalez has been the Vice President and Chief Human Resources Officer of Ducommun since September 2022. Her prior roles at Ducommun include acting Vice President of Human Resources from 2021 to 2022, and Director of Human Resources Shared Services from 2014 to 2021. Earlier in her career, she worked in various human resources roles at GUESS Inc. and First Consulting Group.

Jerry Redondo, Senior Vice President, Electronics & Structural Systems

Mr. Redondo serves as the Senior Vice President, Electronics & Structural Systems for Ducommun. He is also listed as Senior Vice President of Operations.

Rajiv A. Tata, Vice President, General Counsel & Corporate Secretary

Mr. Tata holds the position of Vice President, General Counsel, and Corporate Secretary at Ducommun, a role he has held since 2020.

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• Prolonged Commercial Aerospace Destocking: The ongoing destocking in the commercial aerospace sector is a significant challenge for Ducommun, with analysts projecting this trend to continue into 2026. This prolonged inventory adjustment could lead to reduced demand for the company's products and services, potentially impacting revenue and profitability. As aircraft manufacturers and suppliers optimize inventories, Ducommun may experience pressure on order volumes and pricing.

• Project Execution and Operational Risks: Ducommun is undertaking restructuring efforts and consolidating facilities, and the operational efficiency and ability to deliver on commitments at these new or consolidated production sites present a key near-term risk. Project execution risks could impact Ducommun's future earnings projections and affect margin and earnings reliability.

• Accounting Quality and Revenue Recognition Concerns: There are concerns regarding Ducommun's accounting practices, specifically a rapid increase in receivables and days-sales-outstanding (DSO) metrics, which some analyses suggest indicate an aggressive use of premature revenue recognition. This raises questions about the quality of reported earnings and cash flow, implying that reported results might be propped up by accounting choices rather than operational strength. The company also has a history of regulatory scrutiny tied to revenue recognition.

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The rapid advancement and increasing industrial adoption of additive manufacturing (3D printing) for high-performance aerospace and defense components. This technology enables the production of complex, lightweight, and custom-designed parts with fewer assembly steps and potentially shorter lead times compared to traditional manufacturing processes like machining and extensive assembly. While Ducommun may utilize some advanced manufacturing techniques, the accelerated pace of innovation and widespread adoption by competitors and original equipment manufacturers (OEMs) could diminish the competitive advantage of traditional precision machining and assembly services, potentially shifting market demand towards suppliers who are leaders in this disruptive manufacturing paradigm.

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Ducommun Inc. (DCO) specializes in providing engineering and manufacturing services for high-performance products and applications across the aerospace, defense, and industrial markets. The company's main products and services are categorized into two primary segments: Electronic Systems and Structural Systems.

Addressable Market Sizes for Ducommun's Main Products and Services:

• Electronic Systems: This segment provides high-reliability interconnect systems, printed circuit board assemblies, electronic and electromechanical components, and integrated assemblies for technology-driven markets.
  • For the broader Global Interconnect Solutions Market, which includes connectors, cables, and systems for signal and power interconnection across various sectors including aerospace & defense, industrial, and medical devices, the market was valued at approximately USD 8.8 billion in 2023 and is projected to reach USD 26.68 billion by 2032, growing at a Compound Annual Growth Rate (CAGR) of 13.12%.
  • The larger Global Electronic Components Market was valued at USD 393.63 billion in 2024 and is projected to grow to USD 847.88 billion by 2032, exhibiting a CAGR of 10.3%. Asia Pacific held the largest share of this market in 2024.
• Structural Systems: This segment designs, engineers, and manufactures complex contoured aerostructure components, structural assembly products, aerodynamic systems, and metal and composite bonded structures and assemblies for aerospace and other applications.
  • The Global Aerospace Structural Parts Market was valued at USD 30,865 million in 2024 and is projected to reach USD 46,152 million by 2031, with a CAGR of 6.1%.
  • The broader Global Aerostructures Market was valued at USD 123.25 billion in 2024 and is projected to reach USD 210.65 billion by 2032, demonstrating a CAGR of 6.93%. North America held a significant share (37.62%) of this market in 2023.
  • The Global High Performance Composites Market, which are materials utilized in structural systems, was valued at USD 60.9 billion in 2023 and is projected to grow at a CAGR of 9.1% from 2024 to 2030.
• Medical Industry: Ducommun also serves the medical industry with its engineered materials and components.
  • The Global Medical Engineered Materials Market was valued at approximately USD 27.86 billion in 2024 and is projected to reach nearly USD 98.03 billion by 2034, expanding at a CAGR of 13.4%. Another estimate places the market size at USD 19.41 billion in 2024, increasing to USD 67.32 billion by 2034 with a CAGR of 13.24%.
• Industrial Markets: Ducommun provides innovative manufacturing solutions for sophisticated industrial applications.
  • The Global Engineering Materials Market, relevant to various industrial applications, is valued at USD 62,045.85 million in 2024 and is expected to expand at a CAGR of 14.20% from 2024 to 2031. North America accounted for over 40% of this market in 2024.

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Expected Drivers of Future Revenue Growth for Ducommun (DCO)

Ducommun Inc. (DCO) is anticipated to drive revenue growth over the next 2-3 years through several key strategies and market trends:

1. Continued Strength in Defense and Space Sector: Ducommun expects sustained growth in its military and space end-use markets. This includes higher rates on various missile, fixed-wing aircraft, rotary-wing aircraft, and ground vehicle weapon platforms. The defense business has consistently shown strong performance and is a primary growth engine for the company.
2. Commercial Aerospace Recovery and Increased Production Rates: While facing some recent destocking challenges, Ducommun is optimistic about a recovery in the commercial aerospace sector. The Federal Aviation Administration's (FAA) decision to allow increased production rates for Boeing's 737 MAX is seen as a significant positive, which is expected to help burn down inventory and lead to higher revenue in this segment. The company anticipates commercial aerospace to stabilize in 2026.
3. Expansion of Engineered Products: Ducommun is strategically focused on expanding its portfolio of engineered products. This initiative is a core part of its "VISION 2027" goals, which aim for engineered products to constitute 25% or more of total revenue by 2027, up from approximately 23% in Q3 2025.
4. Strategic Acquisitions: Acquisitions are a component of Ducommun's growth strategy under its "VISION 2027" plan. The company has a demonstrated merger and acquisition (M&A) strategy and execution, indicating that future acquisitions could contribute to revenue expansion.
5. Pricing Strategy and Operational Efficiency: Ducommun is implementing a pricing strategy focused on value, alongside cost reduction initiatives and facility rationalization. These efforts are aimed at improving gross margins and adjusted EBITDA margins, contributing to overall revenue growth and profitability.

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Share Repurchases

• In 2024, Ducommun repurchased approximately $7.457 million in stock related to the exercise of stock options and vested stock awards.
• In 2023, approximately $8.682 million in stock was repurchased, primarily related to the exercise of stock options and vested stock awards.
• The company has not disclosed significant open market share repurchase programs over the past 3-5 years.

Share Issuance

• As of December 31, 2024, there were 621,818 shares outstanding under equity compensation plans.
• The 2024 Stock Incentive Plan, effective April 24, 2024, authorized the issuance of 604,000 common shares, along with any shares remaining from the prior 2020 Stock Incentive Plan.
• Stock awards vested amounted to 163,532 shares in 2022 and 247,235 shares in 2021.

Inbound Investments

• Ducommun received an unsolicited non-binding offer from Albion River LLC in April 2024 to acquire all outstanding shares for $60.00 per share, which was revised to $65.00 per share in July 2024.
• The Board of Directors unanimously determined that pursuing these offers was not in the best interests of Ducommun and its shareholders.
• Albion River LLC subsequently liquidated its holdings and no longer held Ducommun shares as of December 31, 2024.

Outbound Investments

• In March 2023, Ducommun acquired BLR Aerospace, a provider of aerospace engineering, certifying, manufacturing, and marketing services.
• Acquisitions are considered an important element of Ducommun's growth strategy.

Capital Expenditures

• Capital expenditures totaled $4.263 million in 2024 and $3.339 million in 2023.
• In 2021, capital expenditures were $19.134 million. The company had anticipated spending $16.0 million to $18.0 million for capital expenditures in 2021 to support new contract awards in Electronic Systems and Structural Systems.
• The primary focus of capital expenditures includes investing in product design and development, supporting new contract awards, and enhancing technological capabilities.