DCO

Ducommun’s second quarter was marked by strong demand across its core aerospace and defense markets, resulting in financial results that exceeded Wall Street expectations and a positive market reaction. Management attributed this performance to continued execution of its VISION 2027 strategy, with particular emphasis on expanding engineered product content, capitalizing on commercial aerospace recovery, and robust growth in missile programs. CEO Stephen Oswald highlighted that a 68% increase in missile-related sales and new aftermarket retrofit orders for the 737 MAX platform were major contributors to quarterly momentum. Is now the time to buy DCO? Find out in our full research report (it’s free). Revenue: $224.5 million vs analyst estimates of $215.3 million (11.8% year-on-year growth, 4.3% beat) Adjusted EPS: $1.18 vs analyst estimates of $0.98 (20.2% beat) Adjusted EBITDA: $38.37 million vs analyst estimates of $36.34 million (17.1% margin, 5.6% beat) Operating Margin: 12.6%, up from 8.8% in the same quarter last year Market Capitalization: $3.04 billion While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention. John Godyn (Citi) asked about the pronounced acceleration in missile sales and the details behind the 68% growth. CEO Stephen Oswald attributed this primarily to PAC-3 orders and highlighted Ducommun’s position as a key supplier for critical missile components. John Godyn (Citi) also inquired about the nature and expected impact of the 737 MAX retrofit order. CFO Suman Mookerji explained this was a proprietary engineered win expected to generate recurring revenue as both retrofit and line-fit demand progresses. Michael Crawford (B. Riley Securities) questioned Ducommun’s engagement with emerging defense primes and opportunities in affordable mass production. Oswald responded that the company is actively working with new entrants like Anduril and AeroVironment, focusing on differentiated components such as composites and RF antennas. Michael Crawford (B. Riley Securities) further probed Ducommun’s M&A strategy, asking about appetite for larger deals. Mookerji confirmed that the company is actively evaluating larger, value-creating opportunities, with more details to be shared at Investor Day. Kenneth Herbert (RBC Capital Markets) sought clarity on margin tailwinds beyond volume and price, specifically the role of engineered product mix. Mookerji emphasized that further margin expansion is expected as engineered product revenue continues to grow, both organically and via M&A. Looking ahead, the StockStory team will be closely watching (1) the pace at which missile program ramps and new framework agreements convert into firm orders, (2) the continued expansion of engineered product content and associated margin improvement, and (3) signs of sustained commercial aerospace recovery in light of ongoing destocking and supply chain normalization. Execution on the M&A front and progress toward VISION 2027 milestones will also be key areas of focus. Ducommun currently trades at $201.13, up from $191.72 just before the earnings. Is there an opportunity in the stock? See for yourself in our full research report (it’s free for active Edge members). ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI is taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies. Our AI system flagged Palantir before it ran 1,662% between October 2022 and February 2026. AppLovin before it ran 753% between February 2024 and February 2026. Nvidia before it ran 1,178% between January 2023 and February 2026. Each week it produces 6 new names that pass the same tests. Get Our Top 6 Stocks for Free HERE. Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,552% between June 2020 and June 2025). Find your next big winner with StockStory today.

Image source: The Motley Fool. Thursday, Aug. 6, 2026 at 1 p.m. ET Vice President and Chief Financial Officer - Suman Mookerji Chairman, President and Chief Executive Officer - Stephen G. Oswald Operator: Good day, and welcome to the Ducommun Second Quarter 26 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press *11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, press *11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker, Mr. Suman Mookerji. Vice President and Chief Financial Officer. Please go ahead. Suman Mookerji: Thank you, and welcome to Ducommun's 26 Second Quarter Conference Call. With me today is Steve Oswald, Chairman, President and Chief Executive Officer. I am going to discuss certain limitations to any forward-looking statements regarding future events projections or performance that we may make during the prepared remarks or the Q and A session that follows. Certain statements today that are not historical facts, including any statements as to the company's progress and value creation opportunity for shareholders under our VISION 2027 game plan for investors, beliefs about the company's Vision 2032 strategic plan, potential destocking headwinds and their impact on the company's business for the remainder of 2026, expectations related to the US Department of War's long term framework agreements for key missile programs with defense prime, our share of potential orders from those prime, the increase in production on many of those missile programs and their impact on growth of our defense business estimated synergies to be realized under the company's facility consolidation project, and the outlook for the company's revenue and commercial aerospace and defense businesses for the full year 2026 are forward-looking statements under the Private Securities Litigation Reform Act of 2000 and are therefore prospective. Forward looking statements are subject to risks, uncertainties and other factors which could cause actual results to differ materially from the future results expressed or implied by such forward-looking statements. Although we believe that the expectations reflected in our forward-looking statements are reasonable, we can give no assurance that such expectations will prove to have been correct. In addition, estimates of future operating results are based on the company's current business, which is subject to change. Particular risks facing Ducommun include, amongst others, the cyclicality of our end use market, a level of US government defense spending, Our customers may experience changes in production rates or delays in the launch and certification of new product, timing of orders from our customers which are subject to cancellation, modification, or rescheduling, our ability to obtain additional financing and service existing debt, to fund capital expenditures, and meet our working capital needs. Legal and regulatory risks, including pending litigation matters generally, and as well as any potential losses arising from third-party subrogation claims related to the government's performance under fire that may become material the cost of expansion, consolidation, and acquisitions, competition, economic and geopolitical development, including supply chain issues, our ability to successfully implement restructuring, realignment, and cost reduction, activities that could adversely affect our ability to achieve our strategic objectives international trade restrictions, and our ability to obtain necessary US government approval for proposed sales to certain foreign customers the impact of tariffs and elevated interest rates, risks associated with a prolonged partial or total US federal government shutdown, the ability to attract and retain key personnel and avoid labor disruption, the ability to adequately protect and enforce intellectual property rights, Pandemics, disasters, natural or otherwise, and risk of cybersecurity attacks. Please refer to our annual report on Form 10-K and quarterly report on Form 10-Q, other reports filed from time to time with the SEC, as well as the press release issued today for a detailed discussion of the risks. Our forward-looking statements are subject to those risks. Statements made during this call are only as of the time made we do not intend to update any statements made in this presentation except if and as required by regulatory authorities. This call also includes non GAAP financial measures. Please refer to our filings with the SEC for a reconciliation of the GAAP to non GAAP measures referenced on this call. We filed our Q2 26 quarterly report on Form 10 Q with the SEC today. I would now like to turn the call over to Steve Oswald for a review of the operating results. Stephen G. Oswald: Okay. Thank you, Suman. Thanks, everyone, for joining us today for our second quarter conference call. Today and as usual, I will give an update of the current situation of the company, Afterwards, Suman will review our financials in detail. Let me start off again on this quarterly call with Ducommun's VISION 2027 game plan for our investors. As we continue to make great progress in our fourth year of the plan, heading into the final year of the vision starting this January. The strategy and vision were developed out of the COVID pandemic, over the summer and fall of 22. Unanimously approved by the Ducommun board in November 2022, and then presented the following month in New York City to investors we had excellent feedback. Since that time, the Ducommun managers have been executing the strategy by increasing the revenue percentage of engineered product content, is at 23% over the past year, and up from 15% in 2022. Consolidating our rooftop footprint in contract manufacturing, continuing our focused acquisition program, executing the offloading strategy with defense primes in high growth segments, driving value added pricing and expanding content on key commercial aerospace platforms. All of us here as well as my fellow board members continue to have a high level of conviction in our VISION 2027 strategy and financial goals, and believe the market catalyst ahead present a unique value creation opportunity for our shareholders. The Q2 26 results show again that strategy initiatives are working. Gross and adjusted EBITDA margins continue to stay on track to meet and exceed our VISION 2027 goals, along with revenues, and the level of engineered products in aftermarket at the company. For Q2, I am very happy to report that revenues reached the new quarterly record of $224 million 12% growth over last year, our 5th consecutive quarter of over $200 million in revenue, and our 20 first consecutive quarter with year over year revenue growth. We had strong growth across all our end markets with commercial aerospace and particular showing continued strength this year, 16% year-over-year growth. A very positive sign. We saw production and deliveries continue to ramp driven by higher OEM production rates and a gradual easing of the destocking impact. In addition, we benefited from new aftermarket content, that drove incremental retrofit revenues on the 37 MAX. We still expect some destocking to remain as a headwind to the end of this year, but the situation is improving. Military and space revenues grew 7%, with continued strength in our missile portfolio, and fixed wing aircraft. Partially offset by temporary weakness in our radar, space, and naval revenues. During the quarter, we also pulled ahead some production activity and associated revenues from the second half to level up production at our plants. Ahead of higher delivery commitments in the second half of this year. Another major highlight in Q2 was the company's remaining performance obligations continued growth. Reaching a record $1.16 billion which is over $250 million higher than prior year and $85 million higher than just last quarter. Represents a book to bill ratio of 1.4x for the quarter and 1.3x over the last 12 months. We added more than a quarter's worth of revenue to our backlog in the last year. Which is fantastic. Our business our business our defense business RPO grew $197 million year-over-year, and commercial aerospace grew $54 million. We closed on $310 million of bookings in Q2, have closed on $1.1 billion in the past 12 months. Is great work by our business development team and it still does not include our share of potential orders from defense primes under the 7-year missile framework agreements. Which are still being negotiated by RTX and the government, but also happy to see it is now completed as of last month for the PAC-3 and THAAD at Lockheed and L3Harris. We continued our discussions with the defense prime to support them on these major agreements and are well positioned as the incumbent supplier on many of the programs which is great news for DCO and shareholders. Production on many of these missile programs, such as the Tomahawk, PAC-3, and Standard Missile 3 and 6 are expected to grow several fold. And this will be a big driver of growth of DCO defense business over the next few years. Our performance centers are prepared for this increase in production. With most capacity already in place. And we will hit the ground running once the orders begin to flow. Gross margin grew by $9.9 million in the second quarter to 28%, a 160-basis-point improvement from 26.4% last year in Q2, we continue to see the benefits of our VISION 2027 strategy and gross margin expansion. Due to DCO's engineered product portfolio with aftermarket. Strategic value pricing initiatives, restructuring actions, and productivity improvements reading through to the P&L. Our cost saving expectations of $13 million annually from our facility consolidation program has almost been mostly realized at this time. For adjusted operating income margin in Q2, the team delivered 11.9%. Well above the prior year of 10.2%. This was supported by growth in adjusted operating income margins in both our operating segments. Adjusted EBITDA continues to improve to our VISION 2027 goal of 18% in 2027 from 13% in 2022. DCO achieved 17.1% in the quarter, or $38.4 million, up $6.7 million from Q2 25. We are also in great shape for 18% in 2027. GAAP EPS was $1.31, $0.31 per diluted share in Q2 26 versus 84¢ for Q2 25. With the adjustments, diluted EPS was $1.18 a share in Q2 versus $0.90 in the prior year quarter. A higher GAAP and adjusted diluted EPS during the quarter was driven by higher operating income. GAAP net income and EPS also benefited from a 1-time clawback of executive compensation as a result of a restatement published earlier this year. As I mentioned earlier, we closed on over $1.1 billion in bookings over the past 12 months, a trailing 12-month book-to-bill of 1.3x. Increased defense spending and positive momentum in commercial aerospace, we have strong tailwinds in both our primary end markets. On the outlook for the second half of 26, we expect to see continued growth from both our defense and commercial aerospace businesses. But at more muted levels versus the first half. We reiterate our previous guidance of mid to high single revenue growth for the full year and that holds. As I mentioned earlier, we pulled some forward production related revenue recognition into the first half to level load our facilities and to support high levels of delivery commitments in the second half. This is expected to unwind in the second half, resulting in low to mid single digit growth in Q3 and Q4, and keeping our full year expectations. Unchanged. Now let me provide some additional color on our markets, products, and programs. Beginning with our military and space sector, we saw revenues $124 million compared to $116 million in Q2 25. This represents 7% growth, and was driven by another quarter of strong performance in our missile franchise, that was up significantly. We also had nice growth in fixed wing aircraft, which was offset by year over year temporary declines in radar, naval, and space platforms, and this was due to timing of orders. I want to briefly expand on our missile business. DCO's missile business grew 68% in Q2 and is now up 29% over the past 12 months. Mentioned before that RTX, our largest customer, and Lockheed are expected to significantly increase production on many programs, including the PAC-3, SM-3, SM-6, Tomahawk, THAAD, AMRAAM, and we are in discussions on multiple opportunities. DCO is well positioned on all these programs and in great shape with capacity at our operations. To fully support the required ramp up. We sold the key supplier in these programs, and as the orders for replenishment will begin to work their way from announcement of firm orders, Ducommun's focus on capturing as much of this content as we can. This is an exceptional time to be operating in this segment. We are not only fortunate, but also excited. For the opportunity to drive much higher levels of shareholder value from this growth. Within our commercial aerospace operations, second quarter revenue increased 16% year over year to $89 million with strong growth in production, and deliveries on single aisle platforms, from both Boeing and Airbus. Our 37 MAX platform also benefited from an aftermarket retrofit order. This is an incremental content of engineered products for us on the 37 MAX, and the retrofit demand is expected to stay for the next few years, and an opportunity for line fit revenues as well in the future. This growth in our large commercial aerospace business helped offset declines in our business jet and commercial rotorcraft, business during the quarter. We continue to be optimistic on the commercial aerospace outlook. Boeing just last week announced they are continuing to make progress on increasing the 37 max builds from 42 to 47 and the new production line in Everett is now up and running. It was also great to see the MAX-7 recently certified after more than a 6-year-- after more than a 6-year delay. The MAX-10 is next. It will be another big lift for our second largest customer, BA. We see the impact of internal and external destocking coming to an end in the next couple of quarters, with a glide path for growth going into 2027. We continue to monitor closely the supply chain challenges at Airbus with engines. And note they are expecting rate increases in 2027 as well. In summary, the outlook for the next few years is the best I have seen. Since joining Ducommun. And the future is very exciting for the company and its shareholders. We like the balance of defense and commercial aerospace businesses that we have as well. And are strongly positioned to take advantage of the overall industry tailwinds. With that, I will have Suman review our financials in detail. Suman? Suman Mookerji: Thank you, Steve. As a reminder, please see the company's October and Q2 earnings release for a further description of information mentioned on today's call. As Steve discussed, our second quarter results reflect another strong quarter of revenue with continued recovery in commercial aerospace along with growth in our military end markets. Gross margins and EBITDA margins both continued to show improvement on a year over year basis and the synergies from our facility consolidation projects completed last year are now at the expected run rate. These actions, along with our strategic pricing initiatives, drove continued margin expansion in Q2 and keeps us on pace to achieve our vision 2027 goal of 18% adjusted EBITDA percentage of sales. Now turning to our second quarter results. Revenue for the second quarter of 26 was $225 million versus $200.8 million for the second quarter of 25. The year over year increase of 12% reflects strong growth in commercial aerospace of 16%, driven by growth on single aisle platforms, including the 737 MAX and A321, as well as growth on wide body platforms. The strength in the commercial aerospace business was supported by higher production and deliveries for OEM customers and aftermarket retrofit work on the MAX. We continue to see destocking in our commercial aerospace business, expect it to be largely caught up by the end of 26. Our defense business grew 7%, year-over-year, with continued strength in missiles and fixed-wing platforms, partially offset by temporary declines in radar, naval, and space platforms. The growth in our missile franchise was broad based with strength on several different programs, including PAC-3, SM-6, MiR, Tomahawk, and the naval strike missile. As Steve mentioned earlier, our missile business grew by 68% during the quarter and 29% over the past 12 months. And with that, our missiles, radar, and electronic warfare programs combined now represent approximately 35% of our LTM defense revenues. And more than 20% of total DCO revenue. it is a strong franchise with great platforms to drive significant upside for Ducommun in 2027 and beyond, as we see an uptick in OEM production activity on the various missile platforms. Overall, Q2 was a very strong revenue quarter for us but did also benefit from some pull forward of production and related revenue from the second half as we look to level load activity in anticipation of higher deliveries in Q3 and Q4. We posted total gross profit of 62.9 million, or 28 percent of revenue for the quarter, versus $53 million, or 26.4% of revenue in the prior year period. The record gross margin was driven by realization of our planned synergies from the facility consolidation program which are now at their full run rate along with the benefit of higher manufacturing volume. Operating income for the second quarter was $28.3 million or 12% of revenue compared to operating income of $17.7 million or 8.8% of revenue in the prior year period. The year over year increase of $10.6 million was primarily due to higher gross profit and flat SG&A with the latter benefiting from the onetime compensation clawback. Adjusted operating income was $26.7 million, or 11.9% of revenue this quarter, compared to $20.6 million, or 10.2% of revenue in the comparable period last year. The adjusted operating income excluded the onetime benefit of compensation clawback and was up 170 basis points versus prior year. Company reported net income for the second quarter of $20.4 million or $1.31 per diluted share compared to $12.8 million or $0.84 per diluted share a year ago. On an adjusted basis, the company reported net income of $18.4 million or $1.18 per diluted share compared to adjusted net income of $13.6 million or $0.90 in Q2 25. The higher net income and adjusted net income during the quarter were driven by the higher adjusted operating income. Now let me turn to our segment results. Our Structural Systems segment posted revenue of $93 million in the second quarter of 26 versus $91 million last year. The year over year change reflected $4 million higher revenue in our commercial aerospace business driven by single aisle platforms, including the MAX, and the a 23 as well as wide body platforms. The military and space business within this segment was down $2 million on a year-over-year basis with temporary weakness in military rotorcraft partially offset by growth in missiles. Structural systems operating income for the quarter was $12.8 million, or 13.7% of revenue compared to $9.3 million or 10.2% of revenue for the prior year quarter. Excluding restructuring charges and other adjustments in both years, segment operating margin was 15.7% in Q2 26 versus 12.8% in Q2 25. The increase in the year-over-year margin was driven by savings from the facility consolidation program, and higher manufacturing volume. Our electronic systems segment posted revenue of $131 million in the second quarter of 26, versus $110 million in the prior year period. An increase of 20%. The year over year change reflected $10 million in higher revenues in military and space applications driven by strong growth in missiles and military fixed wing aircraft partially offset by temporary weakness in our radar and space business. Commercial aerospace in the quarter grew $8 million, driven by growth in Boeing platforms. Our industrial business also grew $3.8 million during Q2 due to timing of production orders. Electronic Systems operating income for the second quarter was $25.5 million or 19.4% of revenue versus $20.5 million or 18.6% of revenue in the prior year period. Excluding restructuring charges and other adjustments in both years, segment operating margin was 19.7% in Q2 26, versus 19.1% in Q2 25. The year over year increase was driven by higher manufacturing volume. Turning to liquidity and capital resources. In Q2 26, we generated $33.5 million in cash flow from operating activities compared to $22.4 million in Q2 of last year. Our strong cash generation was driven by higher net income partially offset by higher working capital during the quarter. Year to date cash flow from operating activities was $44.8 million, and year-to-date free cash flow was $38.3 million representing free cash flow conversion against adjusted net income of 127%. Q4 of last year, the company amended its credit agreement now included a $200 million term loan and a $450 million revolver. This new $650 million facility lowers our cost of capital gives us incremental capacity to execute on our acquisition strategy. As of the end of the second quarter, we had available liquidity of $410 million, comprising of the unutilized portion of our revolver, and cash on hand. Interest expense in Q2 was $3.5 million compared to $3 million in Q2 of 25. Year over year increase in interest cost was primarily due to higher debt balances, offset by lower interest rates on our debt due to more favorable terms in our new credit agreement. Also, as a reminder, in November 2021, we had put in place an interest rate hedge that went into effect for a 7-year period starting January 2024 and pegged the 1-month term SOFR at a 170 basis points for $150 million of our debt. The hedge is still in place and will continue to drive significant interest cost savings in 2026 and beyond. Conclude the financial overview, I would like to say that the second quarter results continue to affirm that our VISION 2027 strategy is working and that we are well positioned to achieve our vision 2027 goals. I will now turn it back to Steve for his closing remarks. Steve? Stephen G. Oswald: Okay. Thanks, Suman. In closing, Q2 was another record quarter for DCO. Could not be happier. We ended the first half as well with record revenue and EBITDA margins. I am seeing strong tailwinds across our primary end markets. It was also our 5th consecutive quarter of revenue of over $200 million. Gross margin and adjusted EBITDA margins were at 28% and 17.1%, respectively. Wonderful news and on track to meet our vision 2027 goals. In addition, the company's engineered product revenues over the past 12 months is 23% and excellent shape as we drive higher OEM and aftermarket products through the P&L. As everyone knows, driving this percentage as high as possible is our #1 strategic focus with 100% commitment. Finally, I look forward to sharing the next chapter of Ducommun. California's oldest company, still operating today. When we unveil our Vision 2032 on September 17th at our Investor Day in New York City. We cannot be more positive about the future of DCO over the next 6 years. And are excited to share the strategy and game plan with all of you next month. With that, now, let's go to questions. Operator: Thank you. Thank you. As a reminder, to ask a question, please press 11 on your telephone and wait for your name to be announced. To withdraw your question, press 11 again. Our first question will come from the line of John Godyn with Citi. Your line is open. John Godyn: Hey, guys. Thanks for taking my question. I wanted to just hone in on a couple of things from the prepared remarks and then maybe ask a bigger picture 1. But in the prepared remarks, the missile growth number I think I heard 68%. That was a very large acceleration from last quarter. I would love obviously, there is a theme there, but I would love a little bit more color on kind of whatever you are willing to share on the large inflection there. And then, separately, you mentioned a large retrofit order, which I thought was very interesting and perhaps offering a little bit more color there would be useful as well. Stephen G. Oswald: Sure. Great. Great to be with you. Thank you for the question. The questions. I will handle the first 1. Yeah. We are thrilled with the 68%. You know, a lot of it is PAC-3. So, great job by our team, our whole group that supports the PAC-3. Lockheed, in general, is on this replenishment even though these are this is this order was not for the 7 year. it is obviously, 7 year was just done. Last month in July. There are, you know, very focused on PAC-3. We are a major supplier for cards. For the PAC-3. And, so that was a big part of the 68%. And, Suman, want to handle the other 1? Suman Mookerji: Yeah. And, John, just to make sure, the second part outside of the missile growth it is the Carson-- yeah, the Carson-- the retrofit. Yeah. So that really is a great win for us. With engineered products. So Carson is an engineered product business We own the design IP in the revenues that come out of that performance center. And they were able to design a switch which is going to be retrofitted on the max. And, you know, that was a big win. And, we expect that we will also be part of the line fit. And will drive recurring revenue for us. But even prior to that, the retrofit order is you know, it is a large fleet out there. And it is going to drive revenue for us for the next few years, just the retrofit alone. But it is a big win, and that helped with the max. Stephen G. Oswald: This-- that is John, that is a home run for us. That retrofit. John Godyn: Excellent. Excellent. And maybe if we just take a step back and sure we are going to hear more of this at the Investor Day, but just taking a step back on the margin outlook, I think sometimes the pushback that we hear from investors is on contract manufacturing exposure and the margins that, that kind of generates. I think you have demonstrated that you are able to generate higher than normal margins on contract manufacturing. And Steve, maybe there is something to kind of dig in there a little bit and just shed some light on how your contract manufacturing is a little bit different, maybe a little bit more specialized, and how it is generating that margin profile? Stephen G. Oswald: Yeah. it is a great question. And, yeah, I think I am happy to have this answer. You know, contract manufacturing is a challenging business. But if you find the right niches, you can make good money. And, you know, have some pricing power. And that is a good example. that is our titanium business. You know, we do super plastic forming and hot forming of titanium. In the structures, which is, you know, a contract manufacturing built to print business. And there is only a few folks that do that in the entire world. And, you know, outside of Toulouse, which Airbus has even though they are a customer, they also have their own internal titanium operation. We are the largest. And there is very, very few that can do the work we do. So that is 1 example. The only example I would give you is our Joplin facility, which makes harnesses. All types of ruggedized harnesses, all types of applications for high heat, for pressure, for all types of environments, and very few people can do that too. So when you are looking to come in a contract manufacturer, you cannot look at us as, you know, we are just doing, like, machining with 5 and 6 axis machines, and there is a hundred companies that could do that worldwide. Okay? You really got to think about our contract manufacturing business. it is just really things that are really hard to make and there is few people doing it in the world. Excellent. Thanks for the color, guys. Hi, John. Thanks. Operator: 1 moment for our next question. And that will come from the line of Mike Crawford with B. Riley Securities. Your line is open. Michael Crawford: Thank you. So we know you are embedded on these large traditional prime missile and munitions programs, but what are you doing to address all the opportunities coming with affordable mass and emerging new primes such as, like, Anduril. Stephen G. Oswald: Yeah. Well, first of all, great question again. We are engaged. We are engaged with AeroVironment. We are engaged with Anduril. You know, obviously, somewhat as well with Kratos. So we are absolutely on top of this, you know, as far as trying to find areas where we can we can drive value. Do I see us on a $5 thousand drone? You know, I am I am not sure. Okay? But, you know, I do see us, being able to provide value in different areas. Such as composites, possibly RF, antennas, those type of things. So we are actively quoting, actively engaged, We have high levels of relationship now with their management. And, yeah, we continue to move forward. So we are we are we are right on top of it, Mike. Michael Crawford: Alright. Thanks, Steve. Just for 1 follow-up. Question. We know you have been super patient on M&A. I mean, super successful as well and patient, in recent years to not do anything that is not good for shareholders. But do you have a good temperament to look at larger, more transformational deals? And related, if any other updates on the existing pipeline? Stephen G. Oswald: Mike, you are a great straight man. Okay. Look forward to talking to you in September. Well, that is some good news for you. I do not I do mean that, but that is somebody. You wanna jump in real quick? Suman Mookerji: Yeah. No. We continue to remain active in the market in terms of looking at opportunities. We beefed up the team and so we are, absolutely looking at a number of things that we are going to do. We are going to pull the trigger when we think the opportunity is right and there is we have the ability to create value for our shareholders. So we do we you know, stay tuned. And I think you asked another good question, which is Steve said, we will we will be better positioned to answer. Stephen G. Oswald: Yeah. More to come next month, Mike. Michael Crawford: I will be there. Alright. Thank you. Stephen G. Oswald: Great. I look forward to seeing you. Thank you. Thanks for coming all that way. Operator: 1 moment for our next question. And that will come from the line of Kenneth Herbert with RBC Capital Markets. Your line is open. Kenneth Herbert: Yeah. Hey, Steve and Suman. I just wanted to follow-up on the margin question, again, without getting too far ahead of potential September news. But you have done a lot from a restructuring standpoint, facility or manufacturing footprint. As we think about gross margins, moving forward, obviously, volume would be an important tailwind Sounds like you are getting better price. Is there anything else we should think about from just an organizational structure standpoint anything else that could be a tailwind to margins beyond volume and price as we think about sort of the potential over the next few years? Suman Mookerji: Kenneth, great question. We certainly believe there is a lot of margin runway ahead of the company. Again, more color to be provided on Investor Day. You noted a couple of key drivers I would say the other big driver for us is going to be the continued shift to engineered products. that is been, an important part of our story over the last 4 or 5 years. Well, ever since, you know, Steve took on leadership of the company. And it is going to continue to be part of our story going forward. And that will help improve our margin moving to higher IP products, which are more engineered where we are able to make better margins. Stephen G. Oswald: Yeah. Kenneth, the other thing is we just and just the top the next level down is that our engineering, Kenneth, on the engineered product side is just so much better. So great example is this retrofit. You know, with the max. Kenneth Herbert: So-- Yeah. We are not moving the yeah. Go ahead, please. I am sorry, Steve. that is okay. I was just gonna ask, is most of the missile exposure engineered products? Because it just seems like you have got phenomenal opportunity there, but a, you know, significant mix benefit is just gonna face headwinds from growth in a lot of the nonengineered products parts of the portfolio. Suman Mookerji: that is right. No. that is a good point as well. And that is where kind of acceleration on the in M&A is going to play a factor as well. Again, more to come at Investor Day. But, we are growing our engineered products organically too. If you look at the performance over the last 4 years in VISION 2027, with the 1 acquisition, which contributed, maybe 300 basis points to the mix shift, we have gone from 15% to 23% of revenue from engineered products. So that is reflective of the strong organic growth in the business, and there is an expectation with the investments made in that business that we will continue to see strong organic growth And that supplemented with M&A will help keep moving the shift. I think the other question you had around missiles, a lot of the missile work is these ruggedized interconnects or cables which are which are not, in our definition, engineered product, but they are highly proprietary in terms of the process capability that we have. So but they are not technically part of engineering. Stephen G. Oswald: It leads more to [Inaudible] on the missile, Kenneth. But, again, we are working you know, it is obviously build out more engineered products, and, you know, we are we are really happy where we are, and we are gonna I think we are gonna have a really nice story for you guys next month. Kenneth Herbert: On that. No. Sounds great. If I could, just 1 final question. Where are you from a capacity standpoint? I mean, you are seeing the growth like, in the rugged interconnects in these areas, or do you have sufficient capacity in Joplin and these other, you know, centers of excellence to drive that, or are you looking at maybe more CapEx or hiring to really support that? Stephen G. Oswald: Yeah. Hiring for sure, Kenneth. Okay? Thankfully, on the capital side and footprint side, we are in really good shape. Obviously, we are gonna have to make some investments over the next few years, but you know, Joplin, for instance, guys are doing a great job. We just opened up another part of the building that was really not being used for another 25, 30 thousand square feet. You know, the tomahawk is gonna go in there. And that is being lined out. it is gonna be a world class facility, but, you know, we are hiring quite a bit in Joplin, for instance. I think we probably hired over 80 or 90 people since January. So that is a lot for us. So we are we are moving forward. And I think we will be in good shape. Kenneth Herbert: Perfect, Steve. Thanks, Suman. All right, Kenneth. Okay. Thanks. Operator: Thank you. As a reminder, if you would like to ask a question, please press *11. Our next question will come from Alexandra Eleni Mandery with Truist Securities. Your line is open. Alexandra Eleni Mandery: Hey. Nice results, and thanks for taking my question. In relation to missiles, have you started taking a look at your supply chain there to secure components to align with the demand? And what might those constraints be? Stephen G. Oswald: Yeah, it is a good question. Look, it is always a concern. I think we have a really effective, supply chain group. We have been doing this game for a long time, as you know. it is a big part of our business. So, we know how to look at the market. We know as you know, we certainly do some buffer stock when needed. You know, we feel overall that with the capacity and the footprint that we still are which is still underutilized, right, which is gonna start you know, going way up as far as the hiring, which is obviously ongoing right now. You know, we obviously have to monitor, but we feel good about supply chain. We are not uptight about really any kind of components other than you just we need to manage it and, you know, and we do that right now. So I think it is all green light. Alexandra Eleni Mandery: Great. Thank you. Thank you for the question. Operator: Thank you. I am showing no further questions in the queue at this time. I would now like to turn the call over to Mr. Steve Oswald for any closing remarks. Stephen G. Oswald: Okay. Great. Well, let me just wrap it up. First, thank you again for joining us for the Q2 call. As I said in my press release, which I have done over the past few days. The first sentence is, I cannot be happier, and that is true. You know, the first 6 months and this quarter has been wonderful for DCO, wonderful for our employees and our customers, and obviously, our shareholders. and equally important. So we are looking forward to another great second half in 2026. We are also very excited about our Investor Day next month. We hope you can join us again thank you for being with us today. And have a safe day. Operator: This concludes today's program. Thank you all for participating. You may now disconnect. 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This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has positions in and recommends Ducommun. The Motley Fool has a disclosure policy. Ducommun (DCO) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Interested in Ducommun Incorporated? Here are five stocks we like better. Record Q2 performance: Revenue rose 12% year over year to $224.5 million, while adjusted EBITDA margin improved to 17.1% from 15.1%. GAAP earnings increased to $1.31 per diluted share from $0.84. Defense and aerospace demand remained strong: Missile revenue surged 68%, supported by PAC-3, SM-6, AMRAAM, Tomahawk and other programs, while commercial aerospace sales grew 16% on higher Boeing and Airbus production and a 737 MAX retrofit opportunity. Outlook reiterated despite slower second-half growth: Ducommun maintained its full-year 2026 forecast for mid- to high-single-digit revenue growth, but said some production pulled forward into the first half will lead to low- to mid-single-digit growth in the third and fourth quarters. Record remaining performance obligations reached $1.16 billion, with a 1.4x quarterly book-to-bill ratio. 3 Aerospace Suppliers That Could Benefit as Aircraft Makers Face Bottlenecks Ducommun (NYSE:DCO) reported record second-quarter revenue as growth in commercial aerospace and military programs lifted sales, margins and earnings. The company said it remains on track to meet its full-year revenue outlook despite expecting lower growth rates in the second half after pulling forward some production activity into the first half. Second-quarter revenue rose 12% year over year to $224.5 million, marking the company’s fifth consecutive quarter above $200 million and its 21st consecutive quarter of year-over-year revenue growth. Chairman, President and CEO Steve Oswald said commercial aerospace revenue increased 16%, while military and space revenue grew 7%. → Meta’s Earnings Drop Shows Wall Street Wants More Than Ad Growth Don’t Miss These 3 Hidden Aerospace Gems Before They Take Off “The Q2 2026 results show again that the strategy initiatives are working,” Oswald said, citing expansion in engineered products, facility consolidation, strategic pricing and aftermarket content. Gross profit increased to $62.9 million, or 28.0% of revenue, from $53.0 million, or 26.4% of revenue, a year earlier. The company attributed the margin improvement to savings from its facility consolidation program, strategic pricing initiatives and higher manufacturing volume. → Sandisk Just Delivered a Blowout Quarter—Here's Why the Stock Is Falling Top 3 Aerospace and Defense Stocks Flying Under the Radar Ducommun said it has mostly realized its expected $13 million in annual savings from the facility consolidation program. Adjusted operating income rose to $26.7 million, or 11.9% of revenue, compared with $20.6 million, or 10.2% of revenue, in the prior-year quarter. Adjusted EBITDA increased to $38.4 million, or 17.1% of revenue, from $31.7 million a year earlier. The company’s Vision 2027 plan targets adjusted EBITDA margin of 18% in 2027. → 4 Oil and Gas ETF Plays as Prices Stay Sky-High GAAP net income was $20.4 million, or $1.31 per diluted share, compared with $12.8 million, or $0.84 per diluted share, in the second quarter of 2025. Adjusted net income rose to $18.4 million, or $1.18 per diluted share, from $13.6 million, or $0.90 per diluted share. CFO Suman Mookerji said GAAP results also benefited from a one-time executive compensation clawback associated with a restatement published earlier this year. Military and space revenue reached $124 million, up from $116 million a year ago. Growth was led by the company’s missile portfolio and fixed-wing aircraft programs, partly offset by temporary declines in radar, naval and space programs due to order timing. Ducommun’s missile business grew 68% during the quarter and was up 29% over the trailing 12 months. Mookerji said growth was broad-based across PAC-3, SM-6, AMRAAM, Tomahawk and Naval Strike Missile programs. Missiles, radar and electronic warfare programs together represented about 35% of the company’s trailing-12-month defense revenue and more than 20% of total company revenue. Oswald said PAC-3 was a significant contributor to the quarterly missile growth. He added that the company expects production on programs including PAC-3, SM-3, SM-6, Tomahawk, THAAD and AMRAAM to increase as defense primes ramp output. The company said its remaining performance obligations reached a record $1.16 billion, up more than $250 million from a year earlier and $85 million sequentially. Ducommun recorded $310 million in second-quarter bookings and $1.1 billion in bookings over the past 12 months, producing a quarterly book-to-bill ratio of 1.4x and a trailing-12-month ratio of 1.3x. Defense remaining performance obligations increased $197 million year over year, while commercial aerospace obligations rose $54 million. Management said the backlog does not include the company’s potential share of orders related to certain multiyear missile framework agreements between the government and defense primes. Commercial aerospace revenue rose to $89 million, driven by higher production and deliveries on Boeing and Airbus single-aisle platforms, including the 737 MAX and A320, as well as growth on wide-body platforms. The quarter also included revenue from an aftermarket retrofit order on the 737 MAX. Mookerji said Ducommun designed the switch involved in the retrofit program and owns the related intellectual property. The company expects the retrofit work to generate revenue for several years and said the product could eventually become line-fit content on the aircraft. Commercial aerospace growth offset declines in business jet and commercial rotorcraft operations. Management said it expects destocking in commercial aerospace to be largely resolved by the end of 2026, though it remains a headwind through the remainder of the year. Structural Systems: Revenue increased to $93 million from $91 million. Adjusted segment operating margin rose to 15.7% from 12.8%, supported by consolidation savings and higher volume. Electronic Systems: Revenue increased 20% to $131 million, reflecting higher military and space sales, Boeing-related commercial aerospace growth and increased industrial production orders. Adjusted segment operating margin increased to 19.7% from 19.1%. Cash flow from operations was $33.5 million in the quarter, compared with $22.4 million a year earlier. Year-to-date free cash flow totaled $38.3 million, representing 127% conversion against adjusted net income, according to the company. Ducommun ended the quarter with $410 million of available liquidity. Management reiterated its expectation for mid- to high-single-digit revenue growth for full-year 2026. However, Oswald said revenue pulled forward from the second half to support plant scheduling and expected higher delivery commitments later in the year will result in low- to mid-single-digit growth in the third and fourth quarters. Ducommun plans to present its Vision 2032 strategic plan at an investor day in New York on Sept. 17. Ducommun Incorporated, through its Electronics and Structures segments, provides engineered products and integrated systems for the global aerospace, defense and space markets. The Electronics segment focuses on high-reliability electronic assemblies, cable and wire harnesses, connector systems and harsh environment electronics for flight-critical applications. In the Structures segment, Ducommun manufactures complex metallic and composite components such as flight control surfaces, skin panels, heat exchangers and other aerostructures for commercial and military platforms. Founded in 1849 in California as a hardware and stagecoach parts supplier, Ducommun expanded into aerospace manufacturing during World War II and has since grown its capabilities through targeted acquisitions and organic investments. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Ducommun Q2 Earnings Call Highlights" was originally published by MarketBeat. 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This article first appeared on GuruFocus. Release Date: August 06, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Record Q2 revenue of $224 million, up 12% year-over-year, marking the fifth consecutive quarter above $200 million. Strong growth across all end markets, with commercial aerospace up 16% and military/space up 7%. Record backlog of $1.16 billion, up $250 million year-over-year, with a book-to-bill ratio of 1.4x in the quarter. Gross margin expanded to 28% (up 160 bps) and adjusted EBITDA margin reached 17.1%, on track for the 18% Vision 2027 goal. Missile business grew 68% in Q2 and 29% over the past 12 months, with strong positioning for future defense prime orders. Facility consolidation program synergies are now fully realized, contributing to margin expansion. New aftermarket retrofit order for the 737 MAX (Carson switch) provides multi-year revenue opportunity and supports engineered product growth. Strong liquidity of $410 million and a new credit facility with lower cost of capital to support M&A. Adjusted EPS of $1.18, up from $0.90 year-over-year, driven by higher operating income. Positive outlook for 2027 with easing destocking and expected production rate increases from Boeing and Airbus. Destocking in commercial aerospace remains a headwind, expected to last through the end of 2026. Q2 results benefited from pulling forward production from H2, leading to more muted growth (low-to-mid single digits) in Q3 and Q4. Temporary weakness in radar, space, and naval revenues due to timing of orders. Supply chain challenges at Airbus, particularly with engines, could impact production rates. Cash flow from operations in Q2 was only $3.5 million, down from $22.4 million last year, due to higher working capital. Interest expense increased year-over-year due to higher debt balances, despite lower rates. The company's contract manufacturing business, while profitable, is not considered engineered products, which may limit margin expansion in that segment. Potential for further delays in missile framework agreements with defense primes, which could impact order flow. The company faces risks from tariffs, elevated interest rates, and potential government shutdowns. The company's growth is partly dependent on successful execution of M&A strategy, which has been slow to materialize. Warning! GuruFocus has detected 6 Warning Sign with DCO. Is DCO fairly valued? Test your thesis with our free DCF calculator. Q: Can you provide more color on the large inflection in missile growth, which accelerated to 68% in Q2, and also on the large retrofit order mentioned in the prepared remarks? A: Steve Oswald, Chairman, President and CEO: We're thrilled with the 68% growth, a lot of it driven by PAC-3. Our team supporting Lockheed on the PAC-3 program is doing a great job, and we are a major supplier of cards for PAC-3. Regarding the retrofit order, it's a significant win for our engineered products business. Carson, our engineered products unit where we own the design IP, designed a switch that will be retrofitted on the 737 Max. This is a large fleet, and the retrofit alone will drive revenue for the next few years, with expectations that it will also become part of line fit, creating recurring revenue. Q: Can you shed light on how your contract manufacturing business generates higher-than-normal margins, given investor pushback on contract manufacturing exposure? A: Steve Oswald, Chairman, President and CEO: Contract manufacturing is challenging, but if you find the right niches, you can make good money and have pricing power. For example, our titanium business does super plastic forming and hot forming, which only a few companies in the world can do. Our Dropping facility makes ruggedized harnesses for high-heat and high-pressure applications, which very few can replicate. You can't look at us as just doing standard machining; our CM business focuses on things that are really hard to make with few global competitors. Q: What are you doing to address opportunities with affordable mass and emerging new primes like Anduril? A: Steve Oswald, Chairman, President and CEO: We are actively engaged with AeroVironment, Anduril, and others. While we may not be on a $5,000 drone, we see opportunities to provide value in areas like composites and RF antennas. We are actively quoting and have high-level relationships with management, so we are right on top of this trend. Q: Are you looking at larger, more transformational M&A deals, and are there any updates on the existing pipeline? A: Steve Oswald, Chairman, President and CEO: We continue to remain active in the market and have beefed up our team. We are looking at a number of opportunities and will pull the trigger when we think the opportunity is right and can create value for shareholders. Stay tuned for more details at our Investor Day in September. Q: Beyond volume and price, what other tailwinds should we think about for margin expansion over the next few years? A: Suman Mukherjee, VP and CFO: The other big driver is the continued shift to engineered products, which has been an important part of our story. Moving to higher IP products where we have better margins will help improve our overall margin profile. Steve Oswald added that the engineering on the engineered product side is much better, citing the Max retrofit as a great example. Q: Is most of the missile exposure engineered products, and will growth in non-engineered products face headwinds from mix? A: Suman Mukherjee, VP and CFO: A lot of the missile work is ruggedized interconnects or cables, which are not technically in our definition of engineered products, but they are highly proprietary in terms of process capability. We are growing our engineered products organically, going from 15% to 23% of revenue, and M&A will supplement this growth. Steve Oswald added that while missile work leans more towards CM, they are building out more engineered products and will have a nice story to share at Investor Day. Q: Where are you from a capacity standpoint to support growth in rugged interconnects and other areas, and are you looking at more CapEx or hiring? A: Steve Oswald, Chairman, President and CEO: We are in really good shape on the capital and footprint side. For example, in Joplin, we just opened up another 25,000-30,000 square feet of previously unused space for Tomahawk production, which will be a world-class facility. We are hiring quite a bit, with over 80-90 hires in Joplin since January, and we will be in good shape to support the ramp. Q: Have you started securing your supply chain for components to align with missile demand, and what might be the pinch points? A: Steve Oswald, Chairman, President and CEO: We have a very effective supply chain group with long experience in this business. We know how to look at the market and do buffer stock when needed. With our underutilized capacity and ongoing hiring, we feel good about the supply chain and are not uptight about any components. It's all green light for us. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Ducommun (DCO) came out with quarterly earnings of $1.18 per share, beating the Zacks Consensus Estimate of $0.94 per share. This compares to earnings of $0.88 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +25.53%. A quarter ago, it was expected that this aerospace industry supplier would post earnings of $0.44 per share when it actually produced earnings of $0.75, delivering a surprise of +70.45%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. Ducommun, which belongs to the Zacks Aerospace - Defense Equipment industry, posted revenues of $224.49 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 5.07%. This compares to year-ago revenues of $202.26 million. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Ducommun shares have added about 101.5% since the beginning of the year versus the S&P 500's gain of 12.8%. While Ducommun has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Ducommun was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $1.09 on $224.32 million in revenues for the coming quarter and $4.07 on $880.24 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Aerospace - Defense Equipment is currently in the top 36% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Another stock from the same industry, Innovative Solutions and Support, Inc. (ISSC), has yet to report results for the quarter ended June 2026. The results are expected to be released on August 13. This company is expected to post quarterly earnings of $0.24 per share in its upcoming report, which represents a year-over-year change of +71.4%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Innovative Solutions and Support, Inc.'s revenues are expected to be $24.4 million, up 1% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Ducommun Incorporated (DCO) : Free Stock Analysis Report Innovative Solutions and Support, Inc. (ISSC) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Performance was driven by a record quarterly revenue of $224 million, marking the 21st consecutive quarter of year-over-year growth, supported by a 16% increase in commercial aerospace. The company is successfully shifting its portfolio toward engineered products, which now represent 23% of revenue compared to 15% in 2022, enhancing margin profiles and intellectual property ownership. Missile franchise revenue grew 68% in the quarter, benefiting from high demand for programs like PAC-3 and Tomahawk as defense primes move toward replenishment cycles. Gross margin expansion to 28% was attributed to the full realization of $13 million in annual synergies from facility consolidations and strategic value-added pricing initiatives. Management noted that while commercial aerospace is strong, they are navigating a 'glide path' as internal and external destocking headwinds gradually ease through the end of 2026. Operational efficiency was maintained by pulling forward some production into the first half to level-load facilities ahead of significant delivery commitments scheduled for the second half. Management reiterated full-year 2026 revenue growth guidance of mid-to-high single digits, though second-half growth is expected to be more 'muted' at low-to-mid single digits due to the Q2 production pull-forward. The company remains on track to reach its 18% adjusted EBITDA margin goal by 2027, supported by continued mix shift and operational leverage. Significant growth is anticipated from 7-year missile framework agreements with defense primes, with production for programs like SM-3 and SM-6 expected to grow 'several fold' over the next few years. Commercial aerospace growth is expected to accelerate into 2027 as Boeing targets production rate increases and the MAX-7 and MAX-10 certifications provide additional tailwinds. The company plans to unveil 'Vision 2032' in September 2026, which will outline the strategic roadmap for the next six years beyond the current 2027 plan. GAAP EPS benefited from a one-time clawback of executive compensation related to a previously published financial restatement. Remaining Performance Obligations (RPO) reached a record $1.16 billion, providing high visibility with a trailing 12-month book-to-bill ratio of 1.3x. Management identified temporary weakness in radar, space, and naval revenues due to the timing of orders, though they view these as short-term fluctuations. The company maintains an interest rate hedge on $150 million of debt at 170 basis points through 2031, mitigating the impact of elevated market interest rates. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. The surge was primarily driven by the PAC-3 program, where Ducommun is a major supplier of circuit cards for Lockheed Martin. Management emphasized that this growth occurred even before the full impact of the new 7-year framework agreements begins to flow through orders. The order involves a proprietary engineered switch designed by Ducommun's Carson performance center. This represents a 'home run' for the company as it provides recurring revenue from the existing fleet for several years and creates a path for future line-fit revenue. Management avoids 'commodity' machining, focusing instead on high-barrier niches like super-plastic forming of titanium and ruggedized harnesses for extreme environments. These specialized capabilities provide pricing power and higher margins than typical build-to-print contract manufacturing. The company has sufficient physical footprint and capacity, having recently opened 25,000-30,000 square feet of previously unused space in Joplin for the Tomahawk program. The primary focus is currently on aggressive hiring, with nearly 100 new employees added in Joplin since the start of the year to support the ramp.

Record Revenue and Gross Margin; Remaining Performance Obligations at All-Time High COSTA MESA, Calif., Aug. 06, 2026 (GLOBE NEWSWIRE) -- Ducommun Incorporated (NYSE: DCO) (“Ducommun” or the “Company”) today reported results for its second quarter ended July 4, 2026. Second Quarter 2026 Recap Record Net Revenue was $224.5 million, an increase of 12% over Q2 2025* Record Gross margin of 28.0%, year-over-year growth of 160 bps Net income of $20.4 million (increase of 60% year-over-year) or $1.31 per diluted share, and 9.1% of revenue, up 270 bps year-over-year Non-GAAP adjusted net income of $18.4 million (increase of 35% year-over-year), or $1.18 per diluted share Adjusted EBITDA of $38.4 million (increase of 21% year-over-year), or 17.1% of revenue, up 130 bps year-over-year Remaining performance obligations (“RPO”) at an all-time high of $1.2 billion with strong bookings of $309.7 million during the quarter at a book-to-bill of 1.4x “An outstanding second quarter and first half of 2026 for Ducommun. I could not be happier. Our team continued to make great progress towards our VISION 2027 goals with another record for revenue and gross margin during the second quarter. Net revenue grew by double digits at 12%, led by the continued ramp in commercial aerospace, along with solid gains in our defense business,” said Stephen G. Oswald, chairman, president and chief executive officer. “Significant growth on single-aisle aircraft including the Boeing 737 MAX and the Airbus A320 drove 16% year-over-year increase as our commercial aerospace business ramps up and DCO continues to build upon the strong momentum from the first quarter. Ducommun’s defense business saw significant growth once again across our missile franchise and particularly on the PAC-3 and SM-6 missile platforms, along with growth on fixed-wing aircraft platforms notably the F-15, partially offset by temporal weakness on radar, space and naval programs. The 1.4x book-to-bill was also an impressive performance in the quarter and dramatically better than Q2 2025. “Margin expansion was very strong in the quarter expanding 160 bps year-over-year to an all-time record 28.0%. Adjusted EBITDA expanded by 130 bps year-over-year from 15.8% to 17.1% and DCO is in excellent shape working towards the VISION 2027 financial goal of 18% Adjusted EBITDA. “Halfway through year four, our strong performance across revenue, gross margin, and Adjusted EBITDA margins along with our record level of Remaining Performance Obligations positions us well towards meeting our VISION 2027 targets. While we expect to see some continued destocking headwinds in the remaining quarters of 2026, we have begun to see those pressures ease gradually. Ducommun’s missile franchise also continues to gain strength both in revenue and orders, and we are well positioned to benefit from the expected major ramp-up in missile production.” Second Quarter Results Net revenue for the second quarter of 2026 was $224.5 million compared to $200.8 million for the second quarter of 2025. The year-over-year increase was primarily due to the following in the Company's key end-use markets: $12.0 million higher revenue in the Company’s commercial aerospace end-use markets due to higher rates on large aircraft platforms; and $7.9 million higher revenue in the Company’s military and space end-use markets due to higher rates on several missiles and fixed-wing aircraft platforms, partially offset by lower rates on a classified program, selected radar, rotary-wing aircraft, and naval platforms. In addition, revenue for the Company’s industrial end-use markets for the second quarter of 2026 increased $3.8 million compared to the second quarter of 2025 mainly due to timing of orders. Net income for the second quarter of 2026 was $20.4 million, or 9.1% of revenue, or $1.31 per diluted share, compared to net income of $12.8 million, or 6.4% of revenue, or $0.84 per diluted share, for the second quarter of 2025. This mainly reflects higher gross profit of $9.9 million. Selling, general and administrative (“SG&A”) expenses in the second quarter of 2026 compared to the second quarter of 2025 was flat as the second quarter of 2026 includes compensation clawback of $3.9 million, which is a reduction to SG&A expenses. Gross profit for the second quarter of 2026 was $62.9 million, or 28.0% of revenue, compared to gross profit of $53.0 million, or 26.4% of revenue, for the second quarter of 2025. The increase in gross profit as a percentage of net revenue year-over-year was primarily due to higher manufacturing volume and savings from the facility consolidation program, partially offset by unfavorable product mix. Operating income for the second quarter of 2026 was $28.3 million, or 12.6% of revenue, compared to operating income of $17.7 million, or 8.8% of revenue, in the comparable period last year. The year-over-year increase of $10.6 million was primarily due to higher gross profit and compensation clawback included as a reduction in selling, general and administrative expenses. Non-GAAP adjusted operating income for the second quarter of 2026 was $26.7 million, or 11.9% of revenue, compared to $20.6 million, or 10.2% of revenue, in the comparable period last year. Adjusted EBITDA for the second quarter of 2026 was $38.4 million, or 17.1% of revenue, compared to $31.6 million, or 15.8% of revenue, for the comparable period in 2025. Interest expense for the second quarter of 2026 was $3.5 million compared to $3.0 million in the comparable period of 2025. The year-over-year increase was primarily due to a higher outstanding debt balance, partially offset by lower interest rates. During the second quarter of 2026, the net cash provided by operations was $33.5 million compared to $22.4 million during the second quarter of 2025. The higher net cash provided by operations during the second quarter of 2026 was primarily due to higher net income, higher accounts payable, and higher contract liabilities, partially offset by higher accounts receivable and higher inventories. * As restated in the Company's Form 10-K/A filed with the Securities and Exchange Commission on May 8, 2026. Business Segment Information Electronic Systems Electronic Systems segment net revenue for the quarter ended July 4, 2026 was $131.4 million, compared to $109.7 million for the second quarter of 2025. The year-over-year increase was primarily due to the following in the Company's key end-use markets: $10.0 million higher revenue within the Company’s military and space end-use markets due to higher rates on several missiles and fixed-wing aircraft platforms, partially offset by lower rates on a classified program, radar, and naval platforms; and $7.9 million higher revenue in the Company’s commercial aerospace end-use markets due to higher rates on large aircraft and other commercial aerospace platforms. In addition, revenue for the Company’s industrial end-use markets for the second quarter of 2026 increased $3.8 million compared to the second quarter of 2025 mainly due timing of orders. Electronic Systems segment operating income for the quarter ended July 4, 2026 was $25.5 million, or 19.4% of revenue, compared to $20.5 million, or 18.6% of revenue, for the comparable quarter in 2025. The year-over-year increase of $5.0 million was primarily due to higher manufacturing volume, partially offset by unfavorable product mix. Non-GAAP adjusted operating income for the second quarter of 2026 was $25.9 million, or 19.7% of revenue, compared to $20.9 million, or 19.1% of revenue, in the comparable period last year. Structural Systems Structural Systems segment net revenue for the quarter ended July 4, 2026 was $93.1 million, compared to $91.1 million for the second quarter of 2025. The year-over-year increase was primarily due to the following: $4.1 million higher revenue within the Company’s commercial aerospace end-use markets due to higher rates on large aircraft platforms; partially offset by $2.1 million lower revenue within the Company’s military and space end-use markets due to lower rates on selected military rotary-wing aircraft platforms, partially offset by higher rates on selected missiles platforms. Structural Systems segment operating income for the quarter ended July 4, 2026 was $12.8 million, or 13.7% of revenue, compared to $9.3 million, or 10.2% of revenue, for the comparable quarter in 2025. The year-over-year increase of $3.5 million was primarily due to higher manufacturing volume and savings from the facility consolidation program, partially offset by unfavorable product mix. Non-GAAP adjusted operating income for the second quarter of 2026 was $14.6 million, or 15.7% of revenue, compared to $11.7 million, or 12.8% of revenue, in the comparable period last year. Corporate General and Administrative (“CG&A”) Expenses CG&A expenses for the second quarter of 2026 were $9.9 million, or 4.4% of total Company revenue, compared to $12.0 million, or 6.0% of total Company revenue, for the comparable quarter in the prior year. The year-over-year decrease in CG&A expenses was primarily due to compensation clawback of $3.9 million, which is a reduction to CG&A expenses, partially offset by higher compensation and benefits costs of $1.5 million and higher professional services fees of $0.5 million. Conference Call A teleconference hosted by Stephen G. Oswald, the Company’s chairman, president and chief executive officer, and Suman B. Mookerji, the Company’s senior vice president, chief financial officer will be held today, August 6, 2026 at 10:00 a.m. PT (1:00 p.m. ET) to review these financial results. To access the conference call, please pre-register using the following registration link: https://register-conf.media-server.com/register/BId79a3549545545bbb662a173a75704e4 Registrants will receive a confirmation with dial-in details. Mr. Oswald and Mr. Mookerji will be speaking on behalf of the Company and anticipate the call (including Q&A) to last approximately 45 minutes. A live webcast of the event can be accessed using the link above. A replay of the webcast will be available on the Ducommun website at Ducommun.com. Additional information regarding Ducommun's results can be found in the Q2 2026 Earnings Presentation available at Ducommun.com. About Ducommun Incorporated Ducommun Incorporated delivers value-added innovative manufacturing solutions to customers in the aerospace, defense and industrial markets. Founded in 1849, the Company specializes in two core areas - Electronic Systems and Structural Systems - to produce complex products and components for commercial aircraft platforms, mission-critical military and space programs, and sophisticated industrial applications. For more information, visit Ducommun.com. Forward Looking Statements This press release and any attachments include “forward-looking statements,” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including, in particular, expectations relating to the Company's VISION 2027 Strategy and its progress towards the financial goals stated therein, including but not limited to those relating to Adjusted EBITDA, potential destocking headwinds related to the Company's commercial aerospace business through the remainder of 2026, our expectations relating to the ability to continue the strong momentum from the Company's first quarter and our expectations related to the expected ramp up in missile production. The Company generally uses the words “may,” “will,” “could,” “expect,” “anticipate,” “believe,” “estimate,” “plan,” “intend,” “continue” and similar expressions in this press release and any attachments to identify forward-looking statements. The Company bases these forward-looking statements on its current views with respect to future events and financial performance. Actual results could differ materially from those projected in the forward-looking statements. These forward-looking statements are subject to risks, uncertainties and assumptions, including, among other things: the cyclicality of our end-use markets, the level of U.S. government defense spending, our customers may experience changes in production rates or delays in the launch and certification of new products, timing of orders from our customers which are subject to cancellation, modification or rescheduling, our ability to obtain additional financing and service existing debt to fund capital expenditures and meet our working capital needs, legal and regulatory risks, including pending litigation matters generally and as well as any potential losses arising from third party subrogation claims related to the Guaymas performance center fire that may become material, the cost of expansion, consolidation and acquisitions, competition, economic and geopolitical developments – including supply chain issues, our ability to successfully implement restructuring, realignment and cost reduction activities that could adversely impact our ability to achieve our strategic objectives, international trade restrictions and our ability to obtain necessary U.S. government approvals for proposed sales to certain foreign customers, the impact of tariffs and elevated interest rates, risks associated with a prolonged partial or total U.S. federal government shutdown, the ability to attract and retain key personnel and avoid labor disruptions, the ability to adequately protect and enforce intellectual property rights, pandemics, disasters – natural or otherwise, and risk of cybersecurity attacks, and other risks and uncertainties, including those detailed from time to time in the Company’s periodic reports filed with the Securities and Exchange Commission. You should not put undue reliance on any forward-looking statements. You should understand that many important factors, including those discussed herein, could cause the Company’s results to differ materially from those expressed or suggested in any forward-looking statement. Except as required by law, the Company does not undertake any obligation to update or revise these forward-looking statements to reflect new information or events or circumstances that occur after the date of this news release, August 6, 2026, or to reflect the occurrence of unanticipated events or otherwise. Readers are advised to review the Company’s filings with the Securities and Exchange Commission (which are available from the SEC’s EDGAR database at www.sec.gov). Note Regarding Non-GAAP Financial Information This release contains non-GAAP financial measures, including Adjusted EBITDA (which excludes interest expense, net, income tax expense, depreciation, amortization, stock-based compensation expense, restructuring charges, gain on sale of property and other assets, and compensation clawback), including as a percentage of revenue, non-GAAP operating income, including as a percentage of net revenues, non-GAAP net income, non-GAAP earnings per share, and non-GAAP book-to-bill ratio. In addition, certain other prior period amounts have been reclassified to conform to current year’s presentation. The Company believes the presentation of these non-GAAP measures provide important supplemental information to management and investors regarding financial and business trends relating to its financial condition and results of operations. The Company’s management uses these non-GAAP financial measures along with the most directly comparable GAAP financial measures in evaluating the Company’s actual and forecasted operating performance, capital resources and cash flow. The non-GAAP financial information presented herein should be considered supplemental to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. The Company discloses different non-GAAP financial measures in order to provide greater transparency and to help the Company’s investors to more meaningfully evaluate and compare Ducommun’s results to its previously reported results. The non-GAAP financial measures that the Company uses may not be comparable to similarly titled financial measures used by other companies. CONTACT: Suman Mookerji, Senior Vice President, Chief Financial Officer, 657.335.3665 [Financial Tables Follow] Under generally accepted accounting principles in the United States Accounting Standards Codification 606, the Company defines performance obligations as customer placed purchase orders (“PO”) with firm fixed price and firm delivery dates. The unrecognized revenue on POs are the remaining performance obligations.

Curtiss-Wright (CW) came out with quarterly earnings of $3.72 per share, beating the Zacks Consensus Estimate of $3.62 per share. This compares to earnings of $3.23 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +2.76%. A quarter ago, it was expected that this engineering firm would post earnings of $3.32 per share when it actually produced earnings of $3.48, delivering a surprise of +4.82%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. Curtiss-Wright, which belongs to the Zacks Aerospace - Defense Equipment industry, posted revenues of $924.01 million for the quarter ended June 2026, missing the Zacks Consensus Estimate by 0.71%. This compares to year-ago revenues of $876.58 million. The company has topped consensus revenue estimates two times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Curtiss-Wright shares have added about 37.4% since the beginning of the year versus the S&P 500's gain of 13%. While Curtiss-Wright has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Curtiss-Wright was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $3.85 on $937.97 million in revenues for the coming quarter and $15.22 on $3.78 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Aerospace - Defense Equipment is currently in the top 31% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Ducommun (DCO), another stock in the same industry, has yet to report results for the quarter ended June 2026. The results are expected to be released on August 6. This aerospace industry supplier is expected to post quarterly earnings of $0.94 per share in its upcoming report, which represents a year-over-year change of +6.8%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Ducommun's revenues are expected to be $213.67 million, up 5.6% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Curtiss-Wright Corporation (CW) : Free Stock Analysis Report Ducommun Incorporated (DCO) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

BWX Technologies (BWXT) came out with quarterly earnings of $1.07 per share, beating the Zacks Consensus Estimate of $1.01 per share. This compares to earnings of $1.02 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +5.94%. A quarter ago, it was expected that this supplier of nuclear fuel and components to the U.S. government would post earnings of $0.92 per share when it actually produced earnings of $1.12, delivering a surprise of +21.74%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. BWX, which belongs to the Zacks Aerospace - Defense Equipment industry, posted revenues of $901.63 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 1.10%. This compares to year-ago revenues of $764.04 million. The company has topped consensus revenue estimates four times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. BWX shares have lost about 2.4% since the beginning of the year versus the S&P 500's gain of 9.4%. While BWX has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for BWX was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $1.24 on $983.93 million in revenues for the coming quarter and $4.61 on $3.78 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Aerospace - Defense Equipment is currently in the top 26% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. One other stock from the same industry, Ducommun (DCO), is yet to report results for the quarter ended June 2026. The results are expected to be released on August 6. This aerospace industry supplier is expected to post quarterly earnings of $0.94 per share in its upcoming report, which represents a year-over-year change of +6.8%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Ducommun's revenues are expected to be $213.67 million, up 5.6% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report BWX Technologies, Inc. (BWXT) : Free Stock Analysis Report Ducommun Incorporated (DCO) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research