Divestures Behind, Ducommun LaBarge Sees Turn in Fortunes Coming
PITTSBURGH -- Ducommun LaBarge Technologies posted revenue of $95.6 million in its fourth quarter, down 12.5% year-over-year. The segment's revenue drop was primarily due to a 20% decrease in the industrial end-market and a 10% decrease in military and space sales.
Electronic Systems took an operating loss of $27 million for the quarter, compared to operating income of $8.5 million in 2014.
For 2016 the divestitures of Ducommun's Pittsburgh and Miltec operations and the closing of its Houston facility will reduce 2016 full year revenue within the Electronic Systems segment by approximately $80 million, while also eliminating the company's exposure to the energy market. On a pro forma basis, excluding these operations, Electronic Systems would have posted revenue of $313 million in 2015.
The overall company net loss for the period ended Dec. 31 was $63.6 million, versus net income of $5.2 million in the fourth quarter 2014. Net sales were $156.6 million, down 16% from 2014 as military and space end-markets fell 19%. The operating loss was was $88.6 million, compared to operating income of $10.1 million a year ago.
The firm took one-time pretax charges of $91.3 million, approximately $57 million related to a non-cash writeoff of goodwill in its Structures business and roughly $33 million was related to a non-cash writeoff of the LaBarge trade name along with $1.3 million in restructuring. It also shed two businesses, including its Pittsburgh EMS facility, with total annual revenue of $70 million.
Overall, the company reported 2015 sales of $666 million, down 10% from $742 million in 2014. The military and space end-markets fell 21% year-over-year, and industrial declined 4%, partially offset by a 3% increase in commercial aerospace revenue.
The company's chief executive feels the volatility in 2015 will not carry over to 2016, however.
"We believe the defense spending across our platforms have stabilized such that the company should not see the type of severe program swings experienced last year," Anthony Reardon told analysts on a conference call today. "We have actually taken measures to reduce our industrial and market exposure as we should and which would also lower the volatility for this year."
Recent program wins last year included a 10% growth in aerospace electronics content, and helicopter sales and regional business jet revenue are expected to mirror 2015.
