Ducommun Incorporated Jefferies Global Industrials Conference 2026

Okay. Thank you, Simon. Thanks, everyone, for joining us. Good to be together. I am going to give you a quick maybe 35 minutes, so I will probably go 15 minutes plus, and we will do some Q&A. It is my pleasure to talk to you about Ducommun. First, just as a fun fact, we are the oldest company in California still active today, so we are really proud of that. We have had the doors open since 1849. Okay. We started as a humble general store for miners. Charles is our founder, Charles L. Ducommun, and he walked across the country to get to California in 1849. Took him nine months. He almost starved to death and some other things. The Ducommun family, believe it or not, is still about a 4% owner. So a lot of longevity there. We are proud of our history. One other quick fun fact.

Does anybody know next year is the 100th anniversary of what in aerospace? I am sorry. Spirit of St. Louis, Lindbergh's flight. So I am proud also, and we are going to do something for it because we supplied the tubular steel for the Spirit of St. Louis way back in the day. That plane was actually built in San Diego. People do not know that. It was built in San Diego, and Ducommun was a part of it. So look for us next year to celebrate that wonderful achievement, and we will keep going here. Just real quick, just some profile of Ducommun. Since I have been there, I started January of 2017. I came from private equity. I was one of the KKR CEOs, and before that, I was a long-term employee or leader in a large caps UTX, started my career at GE. You can see here what we have done.

This is LTM Q2 2026. It shows you the work we have been at. I think we have a lot more to do. I will talk more about that. You can see we are really proud of our work, especially around our EBITDA margins and the stock price and rewarding our loyal investors. A little bit about our company. Hopefully, you can see that. At least at this point, we are still, I think, probably around 60% defense, 55%. That is probably going to hold, even though commercial is going to come up now. You can see the top left, our LTM is our revenue. You can see our margins. End of Q2 2026. Really proud of our orders.

If you look at our order book and what's happened at Ducommun, especially the last year or so, we've had a really nice run in orders, and makes sense with defense and Boeing finally getting healthy and waking up and really, I think, doing an excellent job turning things around. So thank you to Kelly and his team. The bottom here, when you think about our business and commercial aerospace, I think it's a great story for investors. We're primarily narrow-body people, which is what you want, especially what we make. We're volume people. So we love narrow body. Business jets have been good, and they continue to be good. Wide body is holding. I think it's just going to go up. On the right, you'll see all the franchises we're on. We're absolutely very busy. You can see with the PAC-3.

Congratulations to Raytheon on their $22 billion order for Tomahawk. We are very involved with Iron Dome. Radar systems, we're really coming up now. Our radar system business just gets better and better, so I think that's very positive for investors. About our commercial business here, you can see we're on all the main platforms. Military aircraft, again, on lots of important programs. Other platforms, and you can see the range of our customers. Got lots of OEMs. We're primarily an OEM first tier, but we do a good amount of work as second tier, too, which we're fine as well, but primarily a first tier. Breaking down our segments here, you can see how we report things. We have Electronic Systems and Structural Systems. On the left there, you can see some of the products that we make.

We've had a big focus on engineered products in the last 7, 8 years since I've taken the job. You can see here lightning protection, motion control, HMI, human machine interface. Those things on the right, those are all very high margin with great aftermarket. On the right, you can see the Structural Systems business. We do a lot there. I think one thing when you think about Ducommun and you think about what's titanium, what's hot forming is that we do a lot of things that really no one else in the world does, and that's the way we like it. Okay? So for instance, if you look at our titanium hot form business and superplastic forming, there's Toulouse that makes their, because they're integrated, they love all that, fine. So they make a lot of it. We also supply them. But other than that, there's very few suppliers in the world that can do what we do.

And that's what you want, right? So if you think about a moat, you think about pricing power, you think about success when you go into market, that's a big part of our strategy. Okay? We're never going to be a machine company. Everybody has a 5-axis, everybody has a 6-axis. You program the machine, you get your part. Okay? You're not going to make any money because there's 50 other people that can do it. So when you think about Ducommun, we're really very niche-y on our, we call it contract manufacturing, which is our titanium work. Then, obviously we have an engineered product business, which is, like you can see here, magnetic seals and handling systems, ammunition. And these are all world leaders.

These are all companies we bought. When we go to buy things, you always can ask for the moon, but when we're really looking at our opportunities, we really want things that are leading products, leading markets, and low capital intensity. It's very important for our model as well. That's a little bit about our businesses there. You can see the customers. In December of 2022, after we came out of the terrible COVID, even though we're still working through things, we had an investor day, right here in New York in December. We launched our Vision 2027 for investors to say, "Okay, we're through this terrible time." Commercial aerospace is still very much struggling, but we have a path now, and we signed up for these numbers on the vision.

You can see that we are heading that way, and we feel very good by the end of 2027 that we're going to meet these targets. You say, "Well, how did we do it?" Well, it's in the middle here. We obviously drove scale. We bought things, and then we also grew them, as far as engineered products. I talked about our pricing strategy, focusing on value and having some type of moat. We did some factory consolidation and we do a lot on cost reduction and making sure we're smart buyers on supply chain. That's a very good story. Just to let you know, we have a new Vision 2032 that's coming out on September 17. All right? Maybe you can join us online. We'd be delighted, and we thank you again for being here today.

Okay, before I get any further, let me just review this real quick. The investment highlights, obviously, when I came in, we were at 9% of revenue for engineered products and aftermarket, and now we're right around 25%. All right? That's a big deal for investors. It's a big deal for us. Our margins are very similar to HEICO in that area, and TransDigm, so you can do the math. Okay, and we go to market that way for 25% of our business. Cost reduction, and we did some factory rationalization. We're good at M&A. My CFO, who you might not know, some might, Suman Mookerji. Suman came up through corporate development, so he's really our BD lead as well as our CFO, and we have a great relationship. All the team is driving to find new deals.

Talked about Tier 1, talked about what we're doing on commercial aerospace recovery. I think we've got a great defense story. I'll talk about that. Again, only do things that only a few people can do in manufacturing services. The nice thing is we're pretty much a U.S. manufacturer, so no issue on tariffs. Here's a little more about our engineered products. It's a very important chart. This is really a big part of what's driven our success, and we're going to do a lot more of it. Okay, you can see from the top left, these businesses here. You can see the five deals that we've done. The three other businesses I inherited when I came in in 2017. You can see below all the check marks, proprietary designs, significant sole source position, aftermarket content.

When I came in, the bottom left, we were at 9% of revenue in these businesses, 15% by 2022, and we are heading to 25% by 2027. We will have more of our game plan on the 17th of this month. So stay tuned on that, but that is great. So also, the aftermarket mix, 6%, 10%, and we are going to head to 15% by the end of 2027. When I came in, I told the board, "If you do not have an aftermarket business, you are not an aerospace company." Hey, what are we doing here, right? So it is a long journey because everybody wants aftermarket. Every CEO is going to come up and say, "We want the aftermarket," right? So it takes a long time.

But I think we have done an excellent job with it, starting from where we are and I think a lot more to come, which is exciting, I think, for investors. Again, I talked about cost reduction. We closed a couple of facilities. I am not a guy who is ever going to say, "Well, we will just cut costs and we are good." That is not who I am if you get to know me. I am all about growing. I am all about customer acquisitions. Sometimes you have to do that, but you are never going to cut your way to success. Never. Because once you cut, the next year, all that is in the P&L, and now what are you going to do? So, we will do things. We made some tough decisions. We closed a couple of factories. It has really paid off. We have moved this work over to other sites.