Santa Ana-based aerospace manufacturer Ducommun Inc. initiated more restructuring charges in the second quarter and shuttered its 100,000-square-foot plant in Phoenix, it disclosed in its recent earnings report.
Restructuring charges total $5.4 million, $3.6 million in its Structural Systems segment, $700,000 at its Electronic Systems unit, and $1.1 million at the corporate level.
“We expect to be operating with about 16% less manufacturing square footage and 6% fewer staff as we work to eliminate approximately $14 million in annualized expenses by 2019,” Chief Executive Stephen Oswald said in an Aug. 6 conference call with analysts.
Ducommun (NYSE: DCO) entered the year with 29 owned or leased facilities totaling 2.1 million square feet of manufacturing and office space, and 2,600 employees, according to its 10-K filing.
Based on those figures, more than 150 jobs will be cut, and its manufacturing operations would be downsized to about 1.7 million square feet. Operations at the Phoenix plant, part of its electrical systems business, will be transferred to its Huntsville, Ark., facility by year-end, the company said in a filing.
It appears its Southern California operations won’t be affected, according to Chief Financial Officer and Treasurer Doug Groves.
“In the restructuring that was announced, there was zero impact in most of our Southern California operations,” he told the Business Journal. “No significant reduction in Southern California headcount.”
The Business Journal estimated Ducommun’s local employment at 150 in its April ranking of largest public companies. It ranked No. 36 with a market value of $346 million. But traders have grown to like the 169-year-old company this summer, pushing its stock to an 11-year-high and a market value of $452 million.
The company projects it will incur an additional $5 million to $6 million in restructuring costs in the second half of the year, bringing the cost-cutting initiative to more than $20 million since the December quarter.
In November, the Business Journal reported the restructuring plan would entail $22 million to $25 million in related charges through the end of this year. About $9 million to $10 million of that was earmarked for severance packages and $13 million to $15 million for noncash write-downs of inventory and other impairments.
In the second quarter, it posted revenue of $154 million, up 10% year-over-year and besting Yahoo Finance analyst forecasts of $148.5 million. It posted net income of $1.6 million, or 14 cents per share, just below analyst estimates of 16 cents per share, or $1.8 million.
Ducommun moved its headquarters last year from Los Angeles to Santa Ana.
The company carries the distinction of being California’s oldest continuously running company and the oldest manufacturer in L.A. It’s worked on Boeing 737s since their inception in the 1960s. Ducommun’s aerostructures unit has had a milling facility in Orange since 1981.
Exec to Board
Steve Litchfield, one of the top executives at Microsemi Corp. who was pushed out after its $10.3 billion sale to Microchip Technology Inc. in May, has found a new role with a local tech company.
The former chief strategy officer at the Aliso Viejo-based chipmaker was appointed to the board of Virtium LLC.
The Rancho Santa Margarita-based company develops solid-state drives that use chips to store and transfer data.
Founder and Chief Executive Phu Hoang was one of five recipients of the Business Journal’s third annual Innovator of the Year Awards last year.
The Vietnamese refugee co-captained a boat with 66 passengers out of the country as bullets zoomed past. The vessel drifted to Indonesia after nine days at sea. He arrived in Ontario, Canada, in 1984 with just a shirt, a pair of pants and flip-flops.
Hoang moved to OC in 1991 for a job as a computer engineer designing memory and storage, and held several other jobs before starting the consultancy that grew into Virtium.
The company has expanded employment to more than 150, about 100 of them in OC, and revenue exceeds $75 million.
It didn’t take Litchfield long to find another executive role.
He was hired as chief financial officer and chief corporate strategy officer at Carlsbad-based chipmaker MaxLinear Inc. shortly after his ouster from Microsemi.
The Business Journal broke the story that Microchip Technology Chief Executive Steve Sanghi cleared out Microsemi’s entire management team after the sale closed.
The cuts, initiated on May 29, included Chief Executive Jim Petersen; Chief Operating Officer Paul Pickle; Chief Financial Officer John Hohener; Rick Goerner, executive vice president of marketing and sales; David Goren, senior vice president of business affairs, legal and compliance; Chief Technology Officer Jim Aralis; Sun Kim, senior vice president of global human resources; and Rob Adams, senior vice president of corporate development.
