Connor Dezert

Connor Dezert sought an update on the M&A market from Ducommun's perspective, asking if they are observing increased activity and competitiveness for target assets, following the upsizing of their credit facility for acquisition strategy. He also questioned whether the VISION 2027 target of $75 million revenue contribution from M&A still relies on acquisitions, or if organic growth, particularly in defense, could potentially achieve this.

Answer

Suman Mookerji, SVP and CFO, confirmed increased M&A activity and competitiveness, noting that valuations are not cheap but Ducommun remains disciplined and sees value creation opportunities. Regarding VISION 2027, Suman Mookerji stated that achieving the $75 million M&A revenue contribution range would definitely require acquisitions, primarily due to a slower commercial aerospace recovery pace than initially projected in 2022, despite strong defense growth. Stephen Oswald, Chairman, President, and CEO, added that BLR's acquisition in 2023 contributes to the $75 million target, but more work is needed.

Connor Dezert asked for an update on the M&A market from Ducommun's perspective, inquiring if activity has picked up, how competitive bidding processes are, and if valuations are similar to other A&D suppliers. He also asked if the VISION 2027 target of $75 million in M&A revenue contribution still relies on acquisitions, given recent organic momentum.

Answer

Suman Mookerji, SVP and CFO, confirmed increased M&A activity, noting that it is competitive and valuations are not cheap, but Ducommun remains disciplined and sees opportunities to create value. Regarding VISION 2027, Suman Mookerji and Stephen Oswald affirmed that achieving the $75 million M&A revenue target still requires acquisitions, primarily due to the slower-than-expected commercial aerospace recovery pace compared to initial 2022 projections, despite strong defense growth.