Aerospace and defense products maker Ducommun in Santa Ana says it has “cemented” its relationship with European airplane maker Airbus, while second-quarter net revenue was up almost 9%.
Ducommun (NYSE: DCO) recently announced that it has been selected as an Airbus Detail Parts Partner (D2P) and was awarded a five-year contract to provide key products for that company’s A320 and A330 planes.
Steve Oswald, the president and CEO, said Ducommun had been working with Airbus and supplying products to the European airplane and aerospace company since 2017 and it “just culminated in this award.”
“We really cemented our relationship with them,” Oswald said of the Airbus connection.
The supply contract is for “titanium package” consisting of aircraft structural components produced by heating titanium—a strong metallic element—at a high temperature and forming it in a press.
“Airbus has the biggest backlog in the market for commercial aerospace,” Oswald told the Business Journal on Aug. 18.
Airbus Deal
The A320 is the equivalent to the Boeing 737, while the A330 is a twin-aisle wide-body.
Oswald can’t disclose the amount in the Airbus deal but said “it’ll be material.”
As for the possibility of expanding ties with Airbus? “That’s what we’re obviously hoping for,” the Ducommun CEO said.
“We’re hoping the [economic] rebound [in the aerospace industry] takes full effect, hopefully in the next year or two, especially in the narrow-bodies and hopefully a little later on the wide-bodies.”
Ducommun said it is optimistic about growth acceleration in the future.
The company ranks No. 24 on this year’s Business Journal list of largest aerospace and defense contractors in Orange County, down three notches from last year (see list and story, page 22). It also ranked No. 5 on last year’s list of fastest-growing large public companies locally.
Since August 2020, shares in the company had risen more than 40% as of late last month, for a market cap of nearly $640 million.
Boeing Supplier
Oswald heads the oldest business in California, with a history stretching back 172 years long before commercial airplane flight was even imaginable.
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.
Oswald joined Ducommun as president and CEO in 2017.
Along with Airbus, the exec emphasizes that Ducommun has worked for a long time with rival Boeing on the commercial and defense sides.
“We’ve been a long-time supplier of Boeing. They’re struggling right now. We’re supporting them,” he said. “We feel that in a couple years they’ll be back. We’re excited to get on that train with them and go for some more growth.”
For the second quarter ended July 3, Ducommun’s revenue was $160.2 million, up 8.7% from the same period a year ago while net income was $8.4 million.
Military Work
The company said second-quarter revenue grew $18.5 million higher in the “military and space end-use markets.”
“We’re proud of our defense business. That’s kind of what really made it happen for us last year,” Oswald said.
Oswald said in last month’s earnings release that the company’s results “benefited from the continual improvements in our defense markets along with strong operating management and a slowly improving commercial aerospace market.”
“The second quarter’s military space revenue represented more than 70% of Ducommun’s revenue in the period,” Oswald told investors last month. Oswald expects military and commercial “to balance out a little bit” in the coming years.
On the M&A; side of business, “We’ve done three acquisitions, which have been excellent for Ducommun and for shareholders,” he said. “We’re in the hunt for more.”
Overall, he is very optimistic about future growth.
“We want to build this company up. We want to gain more scale.”
