Slade Struhsaker

Slade Struhsaker asked for a breakdown of the remaining destocking on the 737 MAX, differentiating between internal and external factors. He also inquired about Ducommun's preparedness to scale production for anticipated rate increases at Boeing and Airbus once destocking subsides, and the expected cadence and margin benefits as recently moved production lines reach full run rate.

Answer

Suman Mookerji, SVP and CFO, indicated that destocking on the MAX is more external than internal, noting that large commercial platforms (Boeing and Airbus) constitute about 50% of commercial aerospace revenues. Stephen Oswald, Chairman, President, and CEO, confirmed 100% readiness for Boeing and Airbus bill rate increases. Suman Mookerji projected that recently moved production lines would reach full run rate by the second half of 2026, with approximately half of the projected $11 million-$13 million in total synergies already realized, and the remaining $6 million-$7 million expected to impact the P&L throughout the year. Stephen Oswald specifically mentioned the Tomahawk cable production as a second-half ramp-up.

Slade Struhsaker inquired about the destocking on the 737 MAX, asking for a breakdown of how much of the remaining destocking is internal versus external. He also asked if Ducommun is fully prepared to switch production to accommodate rate increases at Boeing and Airbus once destocking subsides, and for details on the cadence of recently moved production lines reaching full run rate and associated margin benefits.

Answer

Suman Mookerji, SVP and CFO, stated that the MAX destocking is more external than internal, noting that large commercial platforms account for about 50% of commercial aerospace revenues. Stephen Oswald, Chairman, President, and CEO, confirmed 100% readiness for Boeing and Airbus bill rate increases. Suman Mookerji expects the recently moved production lines to reach full run rate by the second half of 2026, with approximately $6 million to $7 million of the projected $11 million to $13 million in annual synergies still to be realized in the P&L this year. Stephen Oswald specifically mentioned the Tomahawk components as one of the last to reach full run rate in the second half.