Ducommun Returns to Black; Cost Cuts, New Orders Cited
Ducommun Inc., mired in losses for the last four years, earned $360,000 in its first quarter largely from sharp cost reductions and increased orders for aircraft parts.
The aerospace company, based in Carson, said sales rose 4% to $16.5 million for the first quarter from $15.7 million during the first three months of 1988. Ducommun lost $1 million during the same quarter of last year.
Ducommun’s first-quarter costs were more than $800,000 less than in the first quarter a year ago, said Chief Financial Officer Donald R. Schort, resulting from work force reductions and reduced overhead. Ducommun has reduced its work force by 10%, or 1,000 employees, since last summer.
Schort, in an interview, said the company’s AHF-Ducommun and Aerochem units both reported increased sales, thanks to additional aircraft orders. Both units build parts for the space shuttle, and AHF-Ducommun also supplies Boeing, McDonnell Douglas and Airbus Industrie. The company doesn’t report the sales of the units separately.
Schort said Ducommun’s Jay-El unit, which makes switches for aircraft panels, continued to lose money. Last year, Ducommun took a $1.5-million inventory writedown for work started at Jay-El without an order.
Ducommun’s stock rose slightly Thursday, since Ducommun had previously announced it would report a profit in the first quarter. Its shares closed at $2.75, up 62 1/2 cents in trading on the American Stock Exchange. Its share price has risen 70% in the last month.
“We are now beginning to see signs that the turnaround efforts, which began during the second half of 1988, are producing positive results,” Norman A. Barkeley, chairman, president and chief executive, said in a statement. Barkeley, the former chairman and chief executive of Lear Siegler, became Ducommun’s president and chief executive last July, and took charge as chairman in January.
Schort said the company had negotiated a new $17-million credit line with Security Pacific. The line expires next April.
