Ducommun Posts Profit for 1989, Its 1st in 5 Years

Once-ailing Ducommun, a Carson-based aerospace supplier and one of California’s oldest companies, which spent most of the late 1980s losing money, apparently has turned things around, according to an earnings report issued Thursday.

During the first full year since Chairman Norman A. Barkeley stepped into the cockpit at Ducommun, the company posted net income of $602,000, contrasted with a loss of $19.4 million in 1988. Sales rose to $68.6 million in 1989 from $59.8 million the year before.

Barkeley, former chairman of Lear Siegler Corp., called 1989 “a transition year for the company.”

Barkeley instituted cost-cutting and other programs to mop up the company’s seemingly endless flow of red ink and to improve profit margins. From 1985 through 1988, Ducommun--founded in 1849 to sell watches and then general merchandise--lost $86.9 million.

But even 1989 was not a smooth ride for Ducommun, which manufactures various components for commercial and military aircraft as well as the space shuttle.

After three straight money-making quarters, Ducommun lost $257,000 in the fourth quarter on sales of $17.4 million. Ducommun blamed the loss on its AHF-Ducommun subsidiary, which enjoyed a large increase in business as well as a boost in overhead expenses.

Corporate turnarounds “are never a straight line up,” said Donald R. Schort, Ducommun’s senior vice president and chief financial officer. “It takes some time to shake out.”

He added that “1990 looks good and we’re optimistic,” noting that it is still too early to tell if Ducommun will be profitable in the first quarter of 1990. But, he added, “we’re back on the road to profitability.”

Income for 1989 from continuing operations--before income taxes and an extraordinary tax credit--was $1.07 million, contrasted with a 1988 net loss of $14.2 million. Ducommun recorded a $456,000 loss from discontinued operations in 1989 from the sale of its cable assembly business. In 1988, the loss from discontinued operations was $5.2 million.

Ducommun’s Aerochem and Jay-El Products units both experienced a sharp improvement in profitability during 1989.

Ducommun was able to reduce its bank debt during 1989 to a little more than $12 million, a decrease of $3.7 million.