LOS ANGELES -- Ducommun reported first quarter net revenue at its Electronic Systems unit was approximately $78.1 million, down 22.6% on facility divestitures and sagging aerospace orders.

The EMS unit saw revenues drop $15.4 million as a result of the divestiture of the Pittsburgh operation in January and the closure of the Houston operation in December; and $8.7 million due to lower demand for fixed-wing and helicopter platforms. Ducommun saw $3.9 million increase in sales for commercial aerospace products during the period.

Operating income was approximately $7.1 million, up 12.7% on improved operating efficiencies related to ongoing cost improvement initiatives, partially offset by the divestiture of the Pittsburgh EMS operation.

Adjusted EBITDA was approximately $29.6 million for the current-year quarter, compared to $10.6 million the prior year. The increase was primarily due to an approximate $18.8 million pretax gain on divestitures of the Pittsburgh and Miltec operations.

As a result of the closure of the Houston operation and divestitures of the Pittsburgh and Miltec operations, Electronic Systems revenue will be lower by approximately $20 million per quarter for the balance of 2016.

Overall revenue was $142.1 million for the period ended Apr. 2, down 17.8%. Net income was $13.6 million, up from a net loss of $2 million a year ago. Operating income was approximately $4.3 million, compared to $3.6 million last year. Cash from operations was $5.5 million, up from $3.5 million in 2015.

“Our 2016 first quarter results validate that Ducommun is taking the right steps to improve long-term operating performance,” said Anthony J. Reardon, chairman and chief executive officer. “Ongoing efficiency-enhancement efforts, along with supply chain initiatives, generated much higher gross margins -- both sequentially and year-over-year -- even in the face of lower defense spending. Our commercial aerospace backlog remains near record levels, and we continue to win new and expanded content on both commercial and military blue-chip platforms.

“In addition, we successfully completed the divestitures of our Pittsburgh and Miltec operations during the quarter, using net proceeds of $50 million to reduce debt to $190 million versus $280 million a year ago. With these transactions behind us, Ducommun is stronger and more focused on serving our core aerospace and defense markets with innovative electronic and structural solutions. We will continue to deleverage the Company’s balance sheet this year, unlocking shareholder value and reducing interest expense in tandem.”

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