UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_________________________________________________________

FORM 10-Q

_________________________________________________________


x			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September~~April 274, ~~2025~~2026


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 001-08174

_________________________________________________________

DUCOMMUN INCORPORATED

(Exact name of registrant as specified in its charter)

_________________________________________________________


Delaware						95-0693330
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

600 Anton Boulevard, Suite 1100, Costa Mesa, California						92626-7100
(Address of principal executive offices)						(Zip code)

Registrant’s telephone number, including area code: (657) 335-3665

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, $.01 par value per share

DCO

New York Stock Exchange

_________________________________________________________

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No x

As of ~~October~~May 285, ~~2025~~2026, the registrant had 1415,~~946~~085,~~052~~559 shares of common stock outstanding.

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DUCOMMUN INCORPORATED AND SUBSIDIARIES

			Page
PART I. FINANCIAL INFORMATION
		Forward Looking Statements	3
	Item 1.	Financial Statements (unaudited)	5
		Condensed Consolidated Balance Sheets as of September 27, 2025 and December 31, 2024	5
		Condensed Consolidated Balance Sheets as of April 4, 2026 and December 31, 2025	5
		Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 27, 2025 and September 28, 2024	6
		Condensed Consolidated Statements of Income for the Three Months Ended April 4, 2026 and March 29, 2025 (As Restated)	6
		Condensed Consolidated Statements of Comprehensive (Loss) Income for the Three and Nine Months Ended September 27, 2025 and September 28, 2024	7
		Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three Months Ended April 4, 2026 and March 29, 2025 (As Restated)	7
		Condensed Consolidated Statements of Changes in Shareholders’ Equity for the Three and Nine Months Ended September 27, 2025 and September 28, 2024	8
		Condensed Consolidated Statements of Changes in Shareholders’ Equity for the Three Months Ended April 4, 2026 and March 29, 2025 (As Restated)	8
		Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 27, 2025 and September 28, 2024	9
		Condensed Consolidated Statements of Cash Flows for the Three Months Ended April 4, 2026 and March 29, 2025 (As Restated)	9
		Notes to Condensed Consolidated Financial Statements	10
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2629
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	4041
	Item 4.	Controls and Procedures	4142
PART II. OTHER INFORMATION
	Item 1.	Legal Proceedings	4243
	Item 1A.	Risk Factors	4243
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4243
	Item 3.	Defaults Upon Senior Securities	4243
	Item 4.	Mine Safety Disclosures	4243
	Item 5.	Other Information	4243
	Item 6.	Exhibits	4344
Signatures			4445

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FORWARD-LOOKING STATEMENTS AND RISK FACTORS

This Quarterly Report on Form 10-Q (“Form 10-Q”) contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be preceded by, followed by or include words such as “could,” “may,” “believe,” “expect,” “anticipate,” “plan,” “estimate,” “~~expect,” “~~would,” or similar expressions. These statements are based on the beliefs and assumptions of our management at the time such statements are made. Generally, forward-looking statements include information concerning our possible or assumed future actions, events or results of operations. Forward-looking statements specifically include, without limitation, the information in this Form 10-Q regarding: future ~~sales~~revenues, earnings, cash flow, revenue recognition, uses of cash and other measures of financial performance, projections or expectations for future operations, including costs to complete contracts, goodwill impairment evaluations, useful life of intangible assets, unrecognized tax benefits and effective tax rate, possible labor disruptions, the imposition of tariffs, environmental remediation costs, insurance recoveries, industry trends and expectations, including ramp up times for build rates, our plans with respect to restructuring activities, capital expenditures, completed acquisitions, future acquisitions and dispositions, and expected business opportunities that may be available to us.

Although we believe that the expectations reflected in the forward-looking statements are based on reasonable assumptions, these forward-looking statements are subject to numerous factors, risks and uncertainties that could cause actual outcomes and results to be materially different from those projected. We cannot guarantee future results, performance or achievements. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements. All written and oral forward-looking statements made in connection with this Form 10-Q that are attributable to us or persons acting on our behalf are expressly qualified in their entirety by the “Risk Factors” contained within Part I, Item 1A of our Amendment No. 1 to our Annual Report on Form 10-K for the year ended December 31, ~~2024~~2025 (“2025 Form 10-K/A”).

There can be no assurance that other factors will not affect the accuracy of these forward-looking statements or that our actual results will not differ materially from the results anticipated in such forward-looking statements. While it is impossible to identify all such factors, some factors that could cause actual results to differ materially from those estimated by us include, but are not limited to, those factors or conditions described under Risk Factors contained within Part I, Item 1A of our 2025 Form 10-K/A and the following:

•~~our level of indebtedness due to~~ the considerable amount of cash needed to run our business and its impact on our ability to service our indebtedness;

•our ~~ability~~indebtedness tocould ~~service~~limit our ~~indebtedness~~financing options;

•the covenants in our credit facilities impose restrictions that may limit our operating and financial flexibility;

•the typical trading volume of our common stock may affect an investor’s ability to sell significant stock holdings in the future without negatively impacting our stock price;

•our amount of debt may require us to raise additional capital to fund acquisitions;

•our end -use markets are cyclical ~~and we depend upon a select base of industries and customers~~;

•awe ~~significant~~depend ~~portion~~on ofa ~~our~~select ~~business~~base ~~depends~~of onindustries ~~the~~and ~~U.S. government defense spending~~customers;

•~~risks~~a ~~associated~~significant ~~with~~portion of our business depends on the U.S. government defense spending, which could be impacted by a prolonged U.S. federal government shutdown;

•exports of certain of our products and our production facility in Guaymas, Mexico are subject to various export control regulations and authorizations for proposed sales to certain foreign customers;

•~~risks associated with~~ existing and new tariffs imposed by the U.S. administration or foreign governments ~~potentially~~could ~~impacting~~impact the operation and conduct of our business outside the United States, including our production facility in Mexico, the sale of products to customers outside the United States and the import of raw materials and equipment from suppliers outside the United States;

•contracts with some of our customers give them a variety of rights that are unfavorable to us and the OEMs (as defined below) to whom we provide products and services, including the ability to terminate a contract at any time for convenience;

•wefurther ~~are~~consolidation ~~and~~in ~~may continue to be subject to subrogation claims asserted by third-party insurers, including~~ the ~~carrier~~aerospace ofindustry ~~the~~could ~~entity~~adversely ~~that~~affect ~~provides the labor and facilities for~~ our ~~Guaymas performance center through an arbitration proceeding currently pending in Arizona with respect to the Guaymas performance center fire, which may become material~~business;

•~~further~~risks ~~consolidation~~related into ~~the~~our ~~aerospace~~ability ~~industry~~to execute our growth strategy, which includes evaluating select acquisitions;

•our ability to execute our growth strategy, which includes evaluating select acquisitions;

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•labor disruptions and the ability of our suppliers to meet the quality and delivery expectations of our customers;

•we may not be successful in achieving expected operating efficiencies and sustaining or improving operating expense reductions, and may experience business disruptions associated with restructuring, performance center consolidations, realignment, cost reduction, and other strategic initiatives;

•risks related to enhanced design, product development, manufacturing, supply chain project management and other skills will be required as we move up the value chain to become a more value added supplier~~, and we are dependent upon our ability to attract and retain key personnel~~;

•risks associated with operating and conducting our business outside the United States;

•customer pricing pressures could reduce the demand and/or price for our products and services;

•our products and processes are subject to risk of obsolescence as a result of changes in technology and evolving industrial and regulatory standards;

•we may not have the ability to renew facilities leases on terms favorable to us, and relocation of operations ~~presents~~present risks due to business interruptions;

•we may be subject to litigation, other legal proceedings, indemnity and product liability claims, including claims that could exceed the limits of our insurance coverage and subrogation claims asserted by third-party insurers, including the Mexican-based carrier of the entity that initiated a lawsuit against us in federal court in California for losses incurred during the June 2020 fire in Guaymas, Mexico, which may become material;

•our operations are subject to numerous extensive, complex, costly and evolving laws, regulations and restrictions, including the Defense Contract Audit Agency and cybersecurity requirements;

•we are subject to a number of procurement laws with which we must comply;

•~~possible~~risks ~~goodwill~~associated ~~and~~with ~~other~~unanticipated ~~asset~~changes ~~impairments~~in our tax provision or exposure to additional income tax liabilities;

•~~the~~possible ~~risk~~goodwill ~~of environmental liabilities~~ and ~~our~~other ~~environmental,~~asset ~~social~~impairments ~~and~~could ~~governance,~~result ~~and~~in ~~sustainability~~substantial ~~responsibilities~~charges;

•~~our~~the ~~ability~~risk toof ~~implement~~environmental ~~changes~~liabilities inand ~~estimates~~our ~~when~~sustainability ~~bidding on fixed-price contracts~~responsibilities;

•~~unanticipated~~risks ~~changes~~associated inwith our ~~tax~~ability ~~provision~~to orimplement ~~exposure~~changes toin ~~additional~~estimates ~~income~~when ~~tax~~bidding ~~liabilities~~on fixed-price contracts;

•~~our~~risks ~~ability~~related to ~~accurately~~the ~~report~~identified ~~our~~material ~~financial~~weakness ~~results~~in ~~or prevent fraud if~~ our internal control over financial reporting ~~is not effective~~;

•~~cybersecurity~~risks ~~attacks~~related to the restatement of our prior consolidated financial statements;

•~~assertions~~risks byrelated ~~third~~to ~~parties~~our ofability ~~violations~~to ofaccurately ~~intellectual~~report ~~property~~our ~~rights;~~financial ~~and~~results, including fully remediating any material weakness on a timely basis, or prevent fraud if our internal control over financial reporting is not effective;

•~~damage~~risks orrelated ~~destruction~~to ofour dependence upon our ~~facilities~~ability ~~caused~~to byattract ~~natural~~and ~~disasters.~~retain key personnel;

•risks associated with labor disruptions and the ability of our suppliers to meet the quality and delivery expectations of our customers;

•risks related to our reliance on our suppliers to meet quality and delivery expectations of our customers;

•risks associated with cybersecurity preparedness and attacks;

•risks related to assertions by third parties of violations of intellectual property rights or the inability to successfully enjoin the misappropriation of our intellectual property rights; and

•damage or destruction of our facilities caused by natural disasters could affect our financial results.

We caution the reader that undue reliance should not be placed on any forward-looking statements, which speak only as of the date of this Form 10-Q. We do not undertake any duty or responsibility to update any of these forward-looking statements to reflect events or circumstances after the date of this Form 10-Q, except as required by law.

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Ducommun Incorporated and Subsidiaries

Condensed Consolidated Balance Sheets

(Unaudited)

(Dollars in thousands, except share and per share data)

September 27,2025

December 31,2024

April 4,2026

December 31,2025

Assets

Current Assets

Cash and cash equivalents

5039,~~918~~103

3745,~~139~~289

Accounts receivable, net of allowance for credit losses of $2,039 and $2,630 at September 27, 2025 and December 31, 2024, respectively

111,269

109,716

Accounts receivable, net of allowance for credit losses of $1,690 and $1,802 at April 4, 2026 and December 31, 2025, respectively

137,027

124,442

Contract assets

~~248~~249,~~402~~229

~~200~~249,~~584~~845

Inventories

~~192~~186,~~817~~269

~~196~~182,~~881~~788

Production cost of contracts

5,~~685~~914

67,~~802~~178

Other current assets

7216,~~259~~314

16,~~959~~442

Total Current Assets

~~681~~633,~~350~~856

~~568~~625,~~081~~984

Property and Equipment, Net of Accumulated Depreciation of $202,781 and $194,921 at September 27, 2025 and December 31, 2024, respectively

107,361

109,812

Property and Equipment, Net of Accumulated Depreciation of $187,468 and $196,508 at April 4, 2026 and December 31, 2025, respectively

105,755

107,223

Operating Lease Right-of-Use Assets

4237,~~173~~888

2840,~~611~~077

Goodwill

244,600

Intangibles, Net

~~137~~128,~~027~~656

~~149~~132,~~591~~839

Deferred Income Taxes

1814,~~172~~180

215,~~239~~500

Other Assets

1720,~~887~~398

2320,~~167~~192

Total Assets

1,~~248~~185,~~570~~333

1,~~126~~186,~~101~~415

Liabilities and Shareholders’ Equity

Current Liabilities

Accounts payable

8579,~~281~~961

7574,~~784~~653

Contract liabilities

3452,~~450~~473

3440,~~445~~694

Accrued and other liabilities

~~194~~28,~~227~~112

4451,~~214~~071

Operating lease liabilities

7,~~796~~005

87,~~531~~817

Current portion of long-term debt

125,~~500~~000

Total Current Liabilities

~~334~~172,~~254~~551

~~175~~179,~~474~~235

Long-Term Debt, Less Current Portion

~~215~~297,~~046~~608

~~229~~298,~~830~~790

Non-Current Operating Lease Liabilities

3633,~~129~~091

2134,~~284~~223

Other Long-Term Liabilities

1412,~~096~~287

1612,~~983~~686

Total Liabilities

~~599~~515,~~525~~537

~~443~~524,~~571~~934

Commitments and Contingencies (Notes 8, 10)

Commitments and Contingencies (Notes 9, 11)

Shareholders’ Equity

Common Stock - $0.01 par value; 35,000,000 shares authorized; 14,945,835 and 14,781,218 shares issued and outstanding at September 27, 2025 and December 31, 2024, respectively

149

148

Common Stock - $0.01 par value; 35,000,000 shares authorized; 15,083,102 and 14,949,671 shares issued and outstanding at April 4, 2026 and December 31, 2025, respectively

151

149

Additional Paid-In Capital

~~229~~246,~~980~~378

~~217~~248,~~523~~482

Retained Earnings

~~412~~416,~~093~~220

~~453~~406,~~475~~304

Accumulated Other Comprehensive Income

67,~~823~~047

116,~~384~~546

Total Shareholders’ Equity

~~649~~669,~~045~~796

~~682~~661,~~530~~481

Total Liabilities and Shareholders’ Equity

1,~~248~~185,~~570~~333

1,~~126~~186,~~101~~415

See accompanying notes to Condensed Consolidated Financial Statements.

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Ducommun Incorporated and Subsidiaries

Condensed Consolidated Statements of ~~Operations~~Income

(Unaudited)

(Dollars in thousands, except per share amounts)

	Three Months Ended				~~Nine Months Ended~~
	September 27,2025		September 28,2024		September 27,2025		September 28,2024
	April 4,2026		March 29,2025
Net Revenues	$	212,558	$	201,412	$	608,932	$	589,259
			(As Restated)
Cost of Sales	156,083		148,736		447,122		438,401
Net Revenues	$	209,022	$	192,481
Gross Profit	56,475		52,676		161,810		150,858
Cost of Sales	152,789		142,030
Selling, General and Administrative Expenses	36,267		35,486		106,820		104,498
Gross Profit	56,233		50,451
Restructuring Charges	583		1,924		1,617		4,548
Selling, General and Administrative Expenses	40,513		45,050
Litigation Settlement and Related Costs, Net	99,675		—		99,675		—
Restructuring Charges	—		426
Operating (Loss) Income	(80,050)		15,266		(46,302)		41,812
Operating Income	15,720		4,975
Interest Expense	(24,~~927~~010)		(3,~~829~~263)		~~(9,198)~~		~~(11,687)~~
Other Income	—		—		1,746		—
Income Before Taxes	11,710		1,712
(Loss) Income Before Taxes	(82,977)		11,437		(53,754)		30,125
Income Tax Expense	1,794		310
Income Tax (Benefit) Expense	(18,531)		1,289		(12,372)		5,404
Net Income	$	9,916	$	1,402
Net (Loss) Income	$	(64,446)	$	10,148	$	(41,382)	$	24,721
Earnings Per Share
(Loss) Earnings Per Share
Basic earnings per share	$	0.66	$	0.09
Basic (loss) earnings per share	$	(4.30)	$	0.69	$	(2.77)	$	1.68
Diluted earnings per share	$	0.64	$	0.09
Diluted (loss) earnings per share	$	(4.30)	$	0.67	$	(2.77)	$	1.65
Weighted-Average Number of Common Shares Outstanding
Basic	1415,~~978~~044		14,~~806~~856		~~14,925~~		~~14,758~~
Diluted	1415,~~978~~599		15,~~039~~177		~~14,925~~		~~14,981~~

See accompanying notes to Condensed Consolidated Financial Statements.

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Ducommun Incorporated and Subsidiaries

Condensed Consolidated Statements of Comprehensive Income (Loss) ~~Income~~

(Unaudited)

(Dollars in thousands)

	Three Months Ended				~~Nine Months Ended~~
	September 27,2025		September 28,2024		September 27,2025		September 28,2024
	April 4,2026		March 29,2025
Net (Loss) Income	$	(64,446)	$	10,148	$	(41,382)	$	24,721
			(As Restated)
Other Comprehensive (Loss) Income, Net of Tax:
Net Income	$	9,916	$	1,402
Amortization of actuarial losses and prior service costs, net of tax of $6 and $14 for the three months ended September 27, 2025 and September 28, 2024, respectively, and $19 and $43 for the nine months ended September 27, 2025 and September 28, 2024, respectively.	19		43		58		129
Other Comprehensive Income (Loss), Net of Tax:
Change in net unrealized (losses) gains on cash flow hedges, net of tax (benefit) expense of $(203) and $(1,543) for the three months ended September 27, 2025 and September 28, 2024, respectively, and $(1,388) and $(806) for the nine months ended September 27, 2025 and September 28, 2024, respectively.	(687)		(5,060)		(4,619)		(2,648)
Amortization of actuarial losses and prior service costs, net of tax expense of $6 for each of the three months ended April 4, 2026 and March 29, 2025, respectively.	20		20
Other Comprehensive (Loss) Income, Net of Tax	(668)		(5,017)		(4,561)		(2,519)
Change in net unrealized gains (losses) on cash flow hedges, net of tax expense (benefit) of $145 and $(715) for the three months ended April 4, 2026 and March 29, 2025, respectively.	481		(2,374)
Comprehensive (Loss) Income	$	(65,114)	$	5,131	$	(45,943)	$	22,202
Other Comprehensive Income (Loss), Net of Tax	501		(2,354)
Comprehensive Income (Loss)	$	10,417	$	(952)

See accompanying notes to Condensed Consolidated Financial Statements.

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Ducommun Incorporated and Subsidiaries

Condensed Consolidated Statements of Changes in Shareholders’ Equity

(Unaudited)

(Dollars in thousands)

	SharesOutstanding	CommonStock		AdditionalPaid-InCapital		RetainedEarnings		AccumulatedOtherComprehensiveIncome (Loss)		TotalShareholders’Equity
Balance at December 31, 2023	14,600,766	$	146	$	206,197	$	421,980	$	7,771	$	636,094
Balance at December 31, 2024	14,781,218	148		224,933		443,657		11,384		680,122
Net income	—	—		—		14,573		—		14,573
Net income (As restated)	—	—		—		1,402		—		1,402
Other comprehensive income, net of tax	—	—		—		—		2,498		2,498
Other comprehensive loss, net of tax	—	—		—		—		(2,354)		(2,354)
Employee stock purchase plan	28,773	—		1,190		—		—		1,190
Stock options exercised	11,947	—		415		—		—		415
Stock awards vested	210,159	2		(2)		—		—		—
Stock repurchased related to the exercise of stock options and stock awards vested	(104,724)	(1)		(5,288)		—		—		(5,289)
Stock-based compensation	—	—		6,418		—		—		6,418
Balance at June 29, 2024	14,746,921	147		208,930		436,553		10,269		655,899
Net income	—	—		—		10,148		—		10,148
Other comprehensive loss, net of tax	—	—		—		—		(5,017)		(5,017)
Employee stock purchase plan	26,447	—		1,132		—		—		1,132
Stock options exercised	8,933	—		358		—		—		358
Stock awards vested	2,205	1		(1)		—		—		—
Stock repurchased related to the exercise of stock options and stock awards vested	(7,879)	—		(508)		—		—		(508)
Stock-based compensation	—	—		3,560		—		—		3,560
Balance at September 28, 2024	14,776,627	$	148	$	213,471	$	446,701	$	5,252	$	665,572
Balance at December 31, 2024	14,781,218	$	148	$	217,523	$	453,475	$	11,384	$	682,530
Net income	—	—		—		23,064		—		23,064
Other comprehensive loss, net of tax	—	—		—		—		(3,893)		(3,893)
Employee stock purchase plan	24,412	1		1,293		—		—		1,294
Stock options exercised	6,610	—		270		—		—		270
Stock awards vested	123,580	1		(1)		—		—		—
Stock awards vested	202,881	2		(2)		—		—		—
Stock repurchased related to the exercise of stock options and stock awards vested	(60,905)	(1)		(3,559)		—		—		(3,560)
Stock repurchased related to the exercise of stock options and stock awards vested	(92,324)	(2)		(5,643)		—		—		(5,645)
Stock-based compensation (As restated)	—	—		15,163		—		—		15,163
Stock-based compensation	—	—		10,211		—		—		10,211
Balance at March 29, 2025 (As Restated)	14,868,305	$	149	$	237,829	$	445,059	$	9,030	$	692,067
Balance at June 28, 2025	14,922,797	149		223,652		476,539		7,491		707,831
Balance at December 31, 2025	14,949,671	149		248,482		406,304		6,546		661,481
Net loss	—	—		—		(64,446)		—		(64,446)
Net income	—	—		—		9,916		—		9,916
Other comprehensive loss, net of tax	—	—		—		—		(668)		(668)
Other comprehensive income, net of tax	—	—		—		—		501		501
Employee stock purchase plan	2018,~~447~~039	—		1,~~188~~373		—		—		1,~~188~~373
Stock options exercised	119,~~400~~983	—1		54807		—		—		54808
Stock awards vested	3208,~~356~~796	12		(12)		—		—		—
Stock repurchased related to the exercise of stock options and stock awards vested	(2113,~~165~~387)	(1)		(~~191~~15,374)		—		—		(~~192~~15,375)
Stock-based compensation	—	—		511,~~278~~092		—		—		511,~~278~~092
Balance at September 27, 2025	14,945,835	$	149	$	229,980	$	412,093	$	6,823	$	649,045
Balance at April 4, 2026	15,083,102	$	151	$	246,378	$	416,220	$	7,047	$	669,796

See accompanying notes to Condensed Consolidated Financial Statements.

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Ducommun Incorporated and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(Dollars in thousands)

Nine Months Ended

Three Months Ended

September 27,2025

September 28,2024

April 4,2026

March 29,2025

(As Restated)

Cash Flows from Operating Activities

Net (Loss) Income

(41,382)

24,721

Net Income

9,916

1,402

Adjustments to Reconcile Net (Loss) Income to

Adjustments to Reconcile Net Income to

Net Cash Provided by Operating Activities:

Depreciation and amortization

258,~~195~~238

258,~~129~~584

Non-cash operating lease cost

62,~~631~~276

62,~~329~~194

Stock-based compensation expense

1711,~~511~~419

1215,~~753~~734

Deferred income taxes

~~(14~~1,~~563)~~168

(71,~~972~~296)

Provision for credit losses

10(112)

~~675~~(54)

Gain on sale of property and other assets

(1,746)

—

Other

283

307

Litigation settlement and related costs, net

97,667

—

Other

909

190

Changes in Assets and Liabilities:

Accounts receivable

(112,~~563~~473)

(38,~~713~~076)

Contract assets

~~(47,818)~~616

(439,~~748~~988)

Inventories

4(3,~~064~~481)

13(1,~~428~~019)

Production cost of contracts

~~790~~1,151

~~1,902~~(16)

Other assets

~~(67)~~308

42,~~129~~913

Accounts payable

105,~~011~~664

34,~~298~~929

Contract liabilities

511,779

~~(16~~3,~~617)~~051

Operating lease liabilities

(51,~~888~~944)

(61,~~300~~918)

Accrued and other liabilities

(823,~~484~~569)

1(15,~~552~~976)

Net Cash Provided by Operating Activities

4111,~~282~~239

~~15,756~~771

Cash Flows from Investing Activities

Purchases of property and equipment

(112,~~172~~936)

(104,~~280~~815)

Proceeds from sale of property and other assets

1,979

—

Proceeds from sale of assets

—

Proceeds from sale of assets

138

—

Net Cash Used in Investing Activities

(2,891)

(4,815)

Net Cash Used in Investing Activities

(9,055)

(10,280)

Cash Flows from Financing Activities

Borrowings from senior secured revolving credit facility

~~25,000~~—

2015,000

Repayments of senior secured revolving credit facility

~~(33,800)~~—

(2515,000)

Repayments of term loan

(61,250)

~~(3,125)~~—

Repayments of other debt

(~~279~~89)

(~~246~~96)

Net cash paid upon issuance of common stock under stock plans

(313,~~119~~195)

(2,~~702~~267)

Net Cash Used in Financing Activities

(1814,~~448~~534)

(112,~~073~~363)

Net Increase (Decrease) in Cash and Cash Equivalents

13,779

(5,597)

Net Decrease in Cash and Cash Equivalents

(6,186)

(6,407)

Cash and Cash Equivalents at Beginning of Period

3745,~~139~~289

4237,~~863~~139

Cash and Cash Equivalents at End of Period

5039,~~918~~103

3730,~~266~~732

See accompanying notes to Condensed Consolidated Financial Statements.

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Ducommun Incorporated and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)

Note 1. Summary of Significant Accounting Policies

Description of Business

We are a leading ~~global~~designer ~~provider~~and manufacturer of ~~innovative,~~and ~~value-added~~provider ~~proprietary~~of ~~products and~~ manufacturing solutions for high-performance products ~~and~~often used in high-cost-of failure applications ~~used~~ primarily in the aerospace and defense (“A&D”), industrial, medical, and other industries (collectively, “Industrial”). Our operations are organized into two primary businesses: ~~the~~ Electronic Systems segment (“Electronic Systems”) and ~~the~~ Structural Systems segment (“Structural Systems”), each of which is a reportable operating segment. Electronic Systems designs, engineers and manufactures high-reliability electronic and electromechanical products used in worldwide technology-driven markets including A&D and Industrial end-use markets. Electronic Systems’ product offerings primarily range from prototype development to complex assemblies. Structural Systems designs, engineers and manufactures large, complex contoured aerostructure components and assemblies and supplies composite and metal bonded structures and assemblies. Structural Systems’ products are primarily used on commercial aircraft, military fixed-wing aircraft, ~~and~~ military and commercial rotary-wing aircraft, and military ground vehicles. ~~Both~~All reportable operating segments generally follow the same accounting principles.

Basis of Presentation

The unaudited condensed consolidated financial statements include the accounts of Ducommun Incorporated and its subsidiaries (“Ducommun,” the “Company,” “we,” “us” or “our”), after eliminating intercompany balances and transactions. The December 31, ~~2024~~2025 unaudited condensed consolidated balance sheet data was derived from audited financial statements, but does not contain all disclosures required by accounting principles generally accepted in the United States of America (“GAAP”).

Our significant accounting policies were described in Part IV, Item 15(a)(1), “Note 1. Summary of Significant Accounting Policies” in our Amendment No. 1 to our Annual Report on Form 10-K for the year ended December 31, ~~2024~~2025 (“~~2024~~2025 Form 10-K/A”). The financial information included in this Quarterly Report on Form 10-Q (“Form 10-Q”) should be read in conjunction with the ~~2024~~2025 Form 10-K/A.

In the opinion of management, all adjustments, including recurring accruals, have been made that are necessary to fairly state our unaudited condensed consolidated financial position, statements of operations, comprehensive ~~(loss)~~ income, changes in shareholders’ equity, and cash flows in accordance with GAAP for the periods covered by this Form 10-Q. The results of operations for the three ~~and nine~~ months ended ~~September~~April 274, ~~2025~~2026 are not necessarily indicative of the results to be expected for the full year ending December 31, ~~2025~~2026.

Our fiscal quarters end on the Saturday closest to the end of March, June and September for the first three fiscal quarters of each year, and on December 31 for our fourth fiscal quarter. As a result of using fiscal quarters for the first three quarters combined with leap years, our first and fourth fiscal quarters can range between 12 1/2 weeks to 13 1/2 weeks while the second and third fiscal quarters remain at a constant 13 weeks per fiscal quarter.

Certain reclassifications have been made to prior period amounts to conform to the current year’s presentation.

Use of Estimates

Certain amounts and disclosures included in the unaudited condensed consolidated financial statements require management to make estimates and judgments that affect the amounts of assets, liabilities (including contract liabilities), revenues and expenses, and related disclosures of contingent assets and liabilities. These estimates are based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

Subsequent Event

Subsequent to our three months ended September 27, 2025, on October 3, 2025, we entered into a binding settlement term sheet (the “Term Sheet”) to resolve the previously disclosed Guaymas fire litigation against us. The Term Sheet provides for, among other things, the final dismissal of the Guaymas fire litigation against us with prejudice and a release of claims against us in exchange for us issuing a payment of $150.0 million, $56.0 million of which is expected to be funded by our insurance carriers. In addition, on October 9, 2025, we also settled an ancillary subrogation claim related to the fire for $1.4 million. We recorded the aggregate total litigation settlement costs of $151.4 million, which is included as part of the operating loss, and the related accrual which is included as part of accrued and other liabilities during the three months ended September 27, 2025 as such conditions existed as of the end of our fiscal third quarter. In addition, we recorded an insurance recovery receivable of

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Supplemental Cash Flow Information

$56.0 million related to the Guaymas fire litigation, which is included as other current assets on our condensed consolidated balance sheets, as it is probable of collection based on the terms of the applicable insurance policies and the settlement agreement and communications with our insurance carriers. The litigation settlement costs in our condensed consolidated statements of operations are shown net of this insurance receivable. See Note 10.


	(Dollars in thousands)
	Three Months Ended
	April 4, 2026		March 29, 2025
Interest paid, net	$	3,617	$	2,658
Taxes (refunded) paid, net	$	(230)	$	221
Non-cash activities:
Purchases of property and equipment not paid	$	151	$	664

Sale of Property

In June 2025, we sold our Berryville, Arkansas facility (consisted of land, building, and building improvements) (“Berryville Property”) for $2.0 million, which was part of our Electronic Systems segment. This asset group was classified as assets held for sale as part of other current assets at the end of the first quarter of 2025, which is the quarter when manufacturing activities had ceased and the asset was ready for sale. The total carrying value of the land, building, and building improvements was $0.8 million, and thus, we recognized a gain of $1.2 million. See Note 2.

Unsolicited Non-Binding Indication of Interest

In April 2024, our Board of Directors (“BOD”) confirmed receipt of the first unsolicited non-binding indication of interest dated April 1, 2024 (“First IOI”) from Albion River LLC (“Albion”), a private direct investment firm. Albion expressed interest in acquiring all the outstanding shares of Ducommun for $60.00 per share in cash. Later in April 2024, we issued a press release responding to the First IOI that the BOD had unanimously determined it was not in the best interests of Ducommun and Ducommun shareholders to pursue further discussions regarding the proposal.

In July 2024, our BOD received an unsolicited revised non-binding indication of interest from Albion (“Second IOI”), to acquire all outstanding shares of Ducommun for $65.00 per share in cash. Later in July 2024, we issued a press release responding to the Second IOI that the BOD had unanimously determined it was not in the best interests of Ducommun and Ducommun shareholders to pursue further discussions regarding the revised proposal.

In November 2024, Albion filed a Schedule 13D/A with the SEC stating that it no longer intended to maintain an active role with Ducommun and that it had reduced its stock ownership to 737,992 shares of our common stock. On February 10, 2025, Albion filed a Schedule 13G/A with the SEC reporting that Albion had liquidated its holdings and no longer owned any shares of Ducommun as of December 31, 2024.

	(Dollars in thousands)
	Nine Months Ended
	September 27,2025		September 28,2024
Interest paid, net	$	6,728	$	9,452
Taxes paid, net	$	2,096	$	8,194
Non-cash activities:
Purchases of property and equipment not paid	$	573	$	674

Earnings Per Share

Basic earnings per share ~~are~~is computed by dividing income available to common shareholders by the weighted-average number of common shares outstanding in each period. Diluted earnings per share is computed by dividing income available to common shareholders by the weighted-average number of common shares outstanding, plus any potentially dilutive shares that could be issued if exercised or converted into common stock in each period.

The net income and weighted-average common shares outstanding used to compute earnings per share were as follows:


	(Dollars in thousands, except per share data)
	Three Months Ended
	April 4, 2026		March 29, 2025
			As Restated
Net income	$	9,916	$	1,402
Weighted-average number of common shares outstanding
Basic weighted-average common shares outstanding	15,044		14,856
Dilutive potential common shares	555		321
Diluted weighted-average common shares outstanding	15,599		15,177
Earnings per share
Basic	$	0.66	$	0.09
Diluted	$	0.64	$	0.09

Potentially dilutive stock awards, as shown below, were excluded from the computation of diluted earnings per share because their inclusion would have been anti-dilutive. However, these awards may be potentially dilutive common shares in the future.

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(In thousands)

Three Months Ended

April 4,
2026

March 29,
2025

Stock options and stock units

	(Dollars in thousands,except per share data)				(Dollars in thousands,except per share data)
	Three Months Ended				Nine Months Ended
	September 27,2025		September 28,2024		September 27,2025		September 28,2024
Net (loss) income	$	(64,446)	$	10,148	$	(41,382)	$	24,721
Weighted-average number of common shares outstanding
Basic weighted-average common shares outstanding	14,978		14,806		14,925		14,758
Dilutive potential common shares	—		233		—		223
Diluted weighted-average common shares outstanding	14,978		15,039		14,925		14,981
(Loss) earnings per share
Basic	$	(4.30)	$	0.69	$	(2.77)	$	1.68
Diluted	$	(4.30)	$	0.67	$	(2.77)	$	1.65

(In thousands)

Three Months Ended

Nine Months Ended

September 27,2025

September 28,2024

September 27,2025

September 28,2024

Stock options and stock units

385

344

Fair Value

Assets and liabilities that are measured, recorded or disclosed at fair value on a recurring basis are categorized using the fair value hierarchy. The fair value hierarchy has three levels based on the reliability of the inputs used to determine the fair value. Level 1, the highest level, refers to the values determined based on quoted prices in active markets for identical assets. Level 2 refers to fair values estimated using significant observable inputs. Level 3, the lowest level, includes fair values estimated using significant unobservable inputs.

We have money market funds which are included as cash and cash equivalents. We also have forward interest rate swap agreements and the fair value of the forward interest rate swap agreements was determined using pricing models that use observable market inputs as of the balance sheet date, a Level 2 measurement.

There were no transfers between Level 1, Level 2, or Level 3 financial instruments in the three months ended ~~September~~April 274, ~~2025~~2026.

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Cash and Cash Equivalents

Cash and cash equivalents ~~consist~~include ofall ~~highly~~cash ~~liquid~~on ~~instruments~~hand, ~~purchased~~demand deposits, and investments with original maturities of three months or less. We extinguish liabilities and reduce cash when the creditor receives our payment, and we are relieved of our obligation for the liability, which generally occurs when our bank clears the payment. These assets are valued at cost, which approximates fair value, ~~and~~which we classify as Level 1. See Fair Value above.

Derivative Instruments

We recognize derivative instruments on our unaudited condensed consolidated balance sheets at their fair value. On the date that we enter into a derivative contract, we designate the derivative instrument as a fair value hedge, a cash flow hedge, or a derivative instrument that will not be accounted for using hedge accounting methods. In November 2021, we entered into forward interest rate swap agreements with an aggregate notional amount of $150.0 million, all with an effective date of January 2024 (“Forward Interest Rate Swaps”), to manage our exposure to interest rate movements on a portion of our debt. At the time we entered into the Forward Interest Rate Swaps, there was a high probability of forecasted interest payments on our debts occurring and the swaps were highly effective in offsetting those interest payments; therefore, we elected to apply cash flow hedge accounting. In July 2022, as a result of refinancing all our existing debt, which allowed borrowing based on a Secured Overnight Financing Rate (“SOFR”), we were required to complete an amendment of the Forward Interest Rate Swaps from One Month London Interbank Offered Rate (“LIBOR”) to One Month Term SOFR (“Amended Forward Interest Rate Swaps”), which occurred on the same day. After the transition of the Forward Interest Rate Swaps and debt to SOFR was completed, we determined the hedging relationships were still highly effective as of the amendment date. See Note 3 4 and Note 78. As of ~~September~~April 274, ~~2025~~2026, all of our derivative instruments were designated as cash flow hedges.

12We record changes in the fair value of a derivative instrument that is highly effective and that is designated and qualifies as a cash flow hedge in other comprehensive income (loss), net of tax until our earnings are affected by the variability of cash flows of the underlying hedged item. We report changes in the fair values of derivative instruments that are not designated or do not qualify for hedge accounting in current period earnings. We classify cash flows from derivative instruments in the unaudited condensed consolidated statements of cash flows in the same category as the item being hedged or on a basis consistent with the nature of the instrument. See Note 4.

~~Table~~When ofwe ~~Contents~~determine that a derivative instrument is not highly effective as a hedge, we discontinue hedge accounting prospectively. In all situations in which we discontinue hedge accounting and the derivative instrument remains outstanding, we will carry the derivative instrument at its fair value on our unaudited condensed consolidated balance sheets and recognize subsequent changes in its fair value in our current period earnings.

We record changes in the fair value of a derivative instrument that is highly effective and that is designated and qualifies as a cash flow hedge in other comprehensive income (loss), net of tax until our earnings are affected by the variability of cash flows of the underlying hedged item. We report changes in the fair values of derivative instruments that are not designated or do not qualify for hedge accounting in current period earnings. We classify cash flows from derivative instruments in the condensed consolidated statements of cash flows in the same category as the item being hedged or on a basis consistent with the nature of the instrument. See Note 3.

When we determine that a derivative instrument is not highly effective as a hedge, we discontinue hedge accounting prospectively. In all situations in which we discontinue hedge accounting and the derivative instrument remains outstanding, we will carry the derivative instrument at its fair value on our condensed consolidated balance sheets and recognize subsequent changes in its fair value in our current period earnings.

Inventories

Inventories are stated at the lower of cost or net realizable value with cost being determined using a moving average cost basis for raw materials and actual cost for work-in-process and finished goods. The majority of our inventory is charged to cost of sales as raw materials are ~~placed~~allocated ~~into~~to ~~production~~a customer order. Inventoried costs include raw materials, outside processing, direct labor and allocated overhead, adjusted for any abnormal amounts of idle performance center expense, freight, handling costs, and wasted materials (spoilage) incurred. We assess the inventory carrying value and reduce it, if necessary, to its net realizable value based on customer orders on hand, and internal demand forecasts using management’s best estimates given information currently available. The majority of our revenues are recognized over time, however, for revenue contracts where revenue is recognized using the point in time method, inventory is not reduced until itcontrol isof ~~shipped~~the orgoods ~~transfer~~transfers ~~of control~~ to ~~the~~our customer ~~has occurred~~. Our ending inventory consists of raw materials, work-in-process, and finished goods.

Accumulated Other Comprehensive Income

Accumulated other comprehensive income, as reflected on the unaudited condensed consolidated balance sheets under the equity section, was comprised of cumulative pension and retirement liability adjustments, net of tax, and change in net unrealized gains and losses on cash flow hedges, net of tax.

Revenue Recognition

Our customers typically engage us to manufacture products based on designs and specifications provided by the end-use customer. ~~This~~In some instances, this requires the building of tooling and manufacturing first article inspection products (prototypes) before volume manufacturing. Contracts with our customers generally include a termination for convenience clause.

We have a significant number of contracts that are started and completed within the same year, as well as contracts derived from long-term agreements and programs that can span several years. We recognize revenue under ASC 606, “Revenue from ~~Contracts with Customers” (“ASC 606”), which utilizes a five-step model.~~

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Contracts with Customers” (“ASC 606”), which utilizes a five-step model.

The definition of a contract for us is typically defined as a customer purchase order as this is when we achieve an enforceable right to payment. The majority of our contracts are firm fixed-price contracts. The deliverables within a customer purchase order are analyzed to determine the number of performance obligations. In addition, at times, in order to achieve economies of scale and based on our customer’s forecasted demand, we may build in advance of receiving a purchase order from our customer. When that occurs, we would not recognize revenue until we have received the customer purchase order.

A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account under ASC 606. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, control is transferred and the performance obligation is satisfied. The majority of our contracts have a single performance obligation as the promise to transfer the individual goods or services are highly interrelated or met the series guidance. For contracts with multiple performance obligations, we allocate the contract transaction price to each performance obligation using our best estimate of the standalone selling price of each distinct good or service in the contract. The primary method used to estimate the standalone selling price is the expected cost plus a margin approach, under which we forecast our expected costs of satisfying a performance obligation and then add an appropriate margin for that distinct good or service.

We manufacture most products to customer specifications, and the ~~product~~products cannot be easily modified for another customer. As such, these products are deemed to have no alternative use once we have allocated the raw materials to a customer order. In the event the customer invokes a termination for convenience clause, we would be entitled to costs incurred to date plus a reasonable profit. Contract costs typically include labor, materials, overhead, and when applicable, subcontractor costs. For most of our products, we are building assets with no alternative use and have enforceable right to payment, and thus, we recognize revenue using the over time method.

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The majority of our performance obligations are satisfied over time as work progresses. Typically, revenue is recognized over time using an input measure (i.e., costs incurred to date relative to total estimated costs at completion, also known as cost-to-cost plus reasonable profit) to measure progress. Our typical revenue contract is a firm fixed price contract, and the cost of raw materials could make up a significant amount of the total costs incurred. As such, we believe using the total costs incurred input method would be the most appropriate method. While the cost of raw materials could make up a significant amount of the total costs incurred, there is a direct relationship between our inputs and the transfer of control of goods or services to the customer.

For contracts with performance obligations being satisfied at a point in time, revenue is recognized when control of the goods or services transfers to our customer. For contracts with shipping terms at origin, we made the accounting policy election that allows us to account for shipping and handling activities as a fulfillment cost instead of being an additional promised service. A portion of the transaction price is not allocated to the shipping service; however, the cost of shipping and handling are accrued when the related revenue is recognized.

Contract estimates, known as “estimates at completion,” are based on various assumptions to project the outcome of future events that can span multiple months or years. These assumptions include among others, actual gross profits on the same or similar products manufactured previously; labor productivity and availability; the complexity of the work to be performed; the cost and availability of materials; overhead cost rates; and the performance of subcontractors. As a significant change in one or more of these estimates could affect the progress completed (and related profitability) on our contracts, we review and update our contract-related estimates on a regular basis. We recognize such adjustments under the cumulative catch-up method. Under this method, the impact of the adjustment is recognized in the period the adjustment is identified. In any given reporting period, we have a large number of active contracts, which we have defined as a customer purchase order, and changes in estimates may occur on a significant number of these contracts. Given the significant number of contracts that we may have at any given point in time, the varied nature of products produced under such contracts, and the different assumptions, facts and circumstances associated with each individual contract, and the fact that such changes at the contract level are typically not material, we disclose cumulative catch-up adjustments on a net basis.

Net cumulative ~~(unfavorable)~~ favorable and unfavorable catch-up adjustments to contracts had the following impact on our operating results:

(Dollars in thousands)

~~(Dollars in thousands)~~

Three Months Ended

~~Nine Months Ended~~

September 27,2025

September 28,2024

September 27,2025

September 28,2024

April 4,2026

March 29,2025

Total net revenues

(~~515~~2,236)

~~(1,054)~~891

~~(640)~~

~~(2,602)~~

Operating income

(~~515~~2,236)

~~(1,054)~~891

~~(640)~~

~~(2,602)~~

Payments under long-term contracts may be received before or after revenue is recognized. When revenue is recognized before we bill our customer, a contract asset is created for the work performed but not yet billed. Similarly, when we receive payment before werevenue ~~ship~~is ~~our products to our customer and have met the shipping terms~~recognized, a contract liability is created for the advance or progress payment. When a contract liability and a ~~contract asset exist on the same contract, we report it on a net basis.~~

We record provisions for the total anticipated losses on contracts, considering total estimated costs to complete the contract compared to total anticipated revenues, in the period in which such losses are identified. The provisions for estimated losses on contracts require us to make certain estimates and assumptions, including those with respect to the future revenue under a contract and the future cost to complete the contract. Our estimate of the future cost to complete a contract may include assumptions as to changes in manufacturing efficiency, operating and material costs, and our ability to resolve claims and assertions with our customers. If any of these or other assumptions and estimates do not materialize in the future, we may be required to adjust the provisions for estimated losses on contracts. The provision for estimated losses on contracts is included as part of contract liabilities on the condensed consolidated balance sheets. As of September 27, 2025 and December 31, 2024, the provision for estimated losses on contracts were $4.9 million and $4.7 million, respectively. It is reasonably possible we may incur additional losses in the future.13

~~Production~~Table ~~cost~~ of contracts includes non-recurring production costs, such as design and engineering costs, and tooling and other special-purpose machinery necessary to build parts as specified in a contract. Production costs of contracts are recorded to cost of sales using the over time revenue recognition model. We review the value of the production cost of contracts on a quarterly basis to ensure when added to the estimated cost to complete, the value is not greater than the estimated realizable value of the related contracts. As of September 27, 2025 and December 31, 2024, production cost of contracts were $5.7 million and $6.8 million, respectively.Contents

contract asset exist on the same contract, we report it on a net basis.

We record provisions for the total anticipated losses on contracts, considering total estimated costs to complete the contract compared to total anticipated revenues, in the period in which such losses are identified. The provisions for estimated losses on contracts require us to make certain estimates and assumptions, including those with respect to the future revenue under a contract and the future cost to complete the contract. Our estimate of the future cost to complete a contract may include assumptions as to changes in manufacturing efficiency, operating and material costs, and our ability to resolve claims and assertions with our customers. If any of these or other assumptions and estimates do not materialize in the future, we may be required to adjust the provisions for estimated losses on contracts. The provision for estimated losses on contracts is included as part of contract liabilities on the unaudited condensed consolidated balance sheets. As of April 4, 2026 and December 31, 2025, the provision for estimated losses on contracts were $6.9 million and $7.0 million, respectively. It is reasonably possible we may incur additional losses in the future.

Production cost of contracts includes non-recurring production costs, such as design and engineering costs, and tooling and other special-purpose machinery necessary to build parts as specified in a contract. Production costs of contracts are recorded to cost of sales using the over time revenue recognition model. We review the value of the production cost of contracts on a quarterly basis to ensure when added to the estimated cost to complete, the value is not greater than the estimated realizable value of the related contracts. As of April 4, 2026 and December 31, 2025, production cost of contracts were $5.9 million and $7.2 million, respectively.

Contract Assets and Contract Liabilities

Contract assets consist of our right to payment for work performed but not yet billed. Contract assets are transferred to accounts receivable when we bill our customers. We bill our customers when we ship the products and meet the shipping terms within the revenue contract. Contract liabilities consist of advance or progress payments received from our customers prior to the time transfer of control occurs plus the estimated losses on contracts. When a contract liability and a contract asset exist on the same contract, we report it on a net basis.

Contract assets and contract liabilities from revenue contracts with customers are as follows:


	(Dollars in thousands)
	April 4, 2026		December 31, 2025
Contract assets	$	249,229	$	249,845
Contract liabilities	$	52,473	$	40,694

The decrease in our contract assets as of April 4, 2026 compared to December 31, 2025 was primarily due to a net decrease of products in work in process in the current period.

The increase in our contract liabilities as of April 4, 2026 compared to December 31, 2025 was primarily due to a net increase of advance or progress payments received from our customers in the current period. We recognized $6.9 million of the contract liabilities as of December 31, 2025 as revenues during the three months ended April 4, 2026.

Performance obligations are defined as customer placed purchase orders (“POs”) with firm fixed price and firm delivery dates. Our remaining performance obligations as of April 4, 2026 totaled $1,073.7 million. Of the remaining performance obligations as of April 4, 2026, we anticipate recognizing an estimated 70% of our remaining performance obligations as revenue during the next 12 months with the remaining performance obligations being recognized in the remainder of 2027 and beyond.

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	(Dollars in thousands)
	September 27,2025		December 31,2024
Contract assets	$	248,402	$	200,584
Contract liabilities	$	34,450	$	34,445

The increase in our contract assets as of September 27, 2025 compared to December 31, 2024 was primarily due to a net increase of products in work in process in the current period.

The increase in our contract liabilities as of September 27, 2025 compared to December 31, 2024 was primarily due to a net increase of advance or progress payments received from our customers in the current period. We recognized $20.0 million of the contract liabilities as of December 31, 2024 as revenues during the nine months ended September 27, 2025.

Performance obligations are defined as customer placed purchase orders (“POs”) with firm fixed price and firm delivery dates. Our remaining performance obligations as of September 27, 2025 totaled $1,031.2 million. Of the remaining performance obligations as of September 27, 2025, we anticipate recognizing an estimated 70% of our remaining performance obligations as revenue during the next 12 months with the remaining performance obligations being recognized in the remainder of 2026 and beyond.

Revenue by Category

In addition to the revenue categories disclosed above, the following table reflects our revenue disaggregated by major end-use market:

(Dollars in thousands)

~~(Dollars in thousands)~~

Three Months Ended

~~Nine Months Ended~~

September 27,2025

September 28,2024

September 27,2025

September 28,2024

April 4,2026

March 29,2025

(As Restated)

Consolidated Ducommun

Military and space

~~125~~117,~~569~~633

~~111~~112,~~402~~196

~~356,141~~

~~310,869~~

Commercial aerospace

7683,~~539~~912

8471,~~626~~388

~~225,914~~

~~251,186~~

Industrial

107,~~450~~477

58,~~384~~897

~~26,877~~

~~27,204~~

Total

~~212~~209,~~558~~022

~~201~~192,~~412~~481

~~608,932~~

~~589,259~~

Electronic Systems

Military and space

9389,~~639~~440

8584,~~433~~091

~~262,201~~

~~227,925~~

Commercial aerospace

1820,~~993~~673

2416,~~595~~077

~~53,978~~

~~69,262~~

Industrial

107,~~450~~477

58,~~384~~897

~~26,877~~

~~27,204~~

Total

~~123~~117,~~082~~590

~~115~~109,~~412~~065

~~343,056~~

~~324,391~~

Structural Systems

Military and space

3128,~~930~~193

2528,~~969~~105

~~93,940~~

~~82,944~~

Commercial aerospace

5763,~~546~~239

6055,~~031~~311

~~171,936~~

~~181,924~~

Total

8991,~~476~~432

8683,~~000~~416

~~265,876~~

~~264,868~~

Recent Accounting Pronouncements

New Accounting Pronouncements Adopted in ~~2025~~2026

In ~~March~~July ~~2024~~2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) ~~2024~~2025-0205, “~~Codification~~Financial ~~Improvements~~Instruments - ~~Amendments~~Credit toLosses ~~Remove~~(Topic ~~References~~326): Measurement toof ~~the~~Credit ~~Concepts~~Losses ~~Statements~~for Accounts Receivable and Contract Assets,” which ~~removed~~provides ~~references~~a topractical ~~various~~expedient ~~FASB~~on ~~Concepts~~assessing ~~Statements~~credit ~~and~~losses ~~updates~~that ~~technical~~assumes ~~corrections~~that ~~such~~current conditions as ~~conforming~~of ~~amendments,~~the ~~clarification~~balance tosheet ~~guidance,~~date ~~simplifications~~do tonot ~~wording~~change orfor the ~~structure~~remaining life of ~~guidance,~~the ~~and other minor improvements~~asset. The new guidance is effective for fiscal years beginning after December 15, ~~2024~~2025, which is our annual period beginning January 1, ~~2025~~2026, and interim reporting periods within those annual reporting periods. Early adoption is permitted in both interim and annual reporting periods in which financial statements have not yet been issued or made available for issuance. The adoption of this accounting standard did not have a material impact on our unaudited condensed consolidated financial statements.

InRecently ~~December~~Issued ~~2023,~~Accounting the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures,” which provides more transparency about tax information primarily related to the rate reconciliation and the income taxes paid. Pronouncements

In December 2025, the FASB issued ASU 2025-12, “Accounting Standards Update Codification Improvements,” which addresses 34 issues such as (1) clarify the calculation of earnings per share when a loss from continuing operations exists, (2) update references to capitalization guidance for environmental remediation costs, and (3) remove other than temporary impairment guidance. The new guidance is effective for fiscal years beginning after December 15, 2026, which is our annual period beginning January 1, 2027, and interim reporting periods within those annual reporting periods. Early adoption is permitted. We are evaluating the impact of this standard.

In December 2025, the FASB issued ASU 2025-11, “Interim Reporting (Topic 270): Narrow-Scope Improvements,” which improves the navigability of the required interim disclosures and clarifying when that guidance is applicable. The amendments also provide additional guidance on what disclosures should be provided in interim reporting periods. The amendments can be applied either (1) prospectively or (2) retrospectively to any or all periods presented in the financial statements. The new guidance is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027, which is our interim period beginning January 1, 2028. Early adoption is permitted. We are evaluating the impact of this standard.

In November 2025, the FASB issued ASU 2025-09, “Derivatives and Hedging (Topic 815): Hedge Accounting Improvements” (“ASU 2025-09”), which clarifies certain aspects of the guidance on hedge accounting and to address several incremental hedge accounting issues arising from the global reference rate reform initiative. It will more closely align

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accounting with the economics of an entity’s risk management activities. The new guidance is effective for fiscal years beginning after December 15, ~~2024~~2026, which is our annual period beginning January 1, ~~2025~~2027, and interim reporting periods within those annual reporting periods. ~~The~~Early adoption ofis ~~this~~permitted ~~accounting~~on ~~standard~~any ~~did~~date ~~not~~on ~~have~~or aafter ~~material~~the ~~impact~~issuance onof ~~our~~ASU ~~condensed~~2025-09. ~~consolidated~~We ~~financial~~are ~~statements~~evaluating the impact of this standard.

Recently Issued Accounting Pronouncements

In September 2025, the FASB issued ASU 2025-06, “Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software,” which removes all references to prescriptive and sequential software development stages. Therefore, an entity is required to start capitalizing software costs when i) management has authorized and committed to funding the software project, and ii) it is probable that the project will be completed and the software will be used to perform the function intended. The new guidance is effective for fiscal years beginning after December 15, 2027, which is our annual period beginning January 1, 2028, and interim reporting periods within those annual reporting periods. Early adoption is permitted as of the beginning of an annual reporting period. We are evaluating the impact of this standard.

In July 2025, the FASB issued ASU 2025-05, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets,” which provides a practical expedient on assessing credit losses that assumes that current conditions as of the balance sheet date do not change for the remaining life of the asset. The new guidance is effective for fiscal years beginning after December 15, 2025, which is our annual period beginning January 1, 2026, and interim reporting periods within those annual reporting periods. Early adoption is permitted in both interim and annual reporting periods in which financial statements have not yet been issued or made available for issuance. We are evaluating the impact of this standard.

In January 2025, the FASB issued ASU 2025-01, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date,” which clarifies that all public business entities should initially adopt the disclosure requirements in the final annual reporting period beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027. The new guidance is effective for fiscal years beginning after December 15, 2026, which is our annual period beginning January 1, 2027, and interim reporting periods beginning after December 15, 2027, which will be our interim period beginning January 1, 2028. Early adoption of ASU 2024-03 (described below) is permitted. We are evaluating the impact of this standard in conjunction with ASU 2024-03 below.

In November 2024, the FASB issued ASU 2024-03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses,” (“ASU 2024-03”),which requires additional information about specific expense categories in the notes to the financial statements at interim and annual reporting periods. The new guidance is effective for fiscal years beginning after December 15, 2026, which is our annual period beginning January 1, 2027, and interim reporting periods beginning after December 15, 2027, which will be our interim period beginning January 1, 2028. Early adoption is permitted. The amendments in ASU 2024-03 should be applied either (1) prospectively to financial statements issued for reporting periods after the effective date, or (2) retrospectively to any or all prior periods presented in the financial statements. We are evaluating the impact of this standard.

In October 2023, the FASB issued ASU 2023-06, “Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative,” which incorporates updates to the Accounting Standards Codification (“Codification”) to align certain Securities and Exchange Commission (“SEC”) disclosure requirements. The amendments impact a variety of topics but are relatively narrow in nature. For entities required to comply with the SEC’s existing disclosure requirements, the effective date for each amendment will be the effective date of the removal of the disclosure requirement from SEC Regulation S-X or SEC Regulation S-K, with early adoption prohibited. The amendments should be applied prospectively. If by June 30, 2027, the SEC has not removed the applicable requirement from Regulation S-X or Regulation S-K, the pending content of the related amendment will be removed from the Codification and will not become effective for any entity. We are evaluating the impact of this standard.

Note 2. ~~Restructuring Activities~~Restatement

~~Summary~~As ofdisclosed ~~2022~~in ~~Restructuring~~our ~~Plan~~2025 Form 10-K/A for the year ended December 31, 2025, we restated our audited consolidated financial statements for the year ended December 31, 2025, and our unaudited quarterly financial information for each quarter in the year ended December 31, 2025 (the “Affected Periods”), among other periods, and corrected certain other immaterial items that were previously identified and concluded as immaterial, individually and in the aggregate, to its financial statements during the Affected Periods as further described below.

InWhile ~~April~~preparing ~~2022~~the first quarter of 2026 consolidated financial statements, management ~~approved~~identified ~~and~~an ~~commenced~~error ain ~~restructuring~~our ~~plan~~historical ~~that~~consolidated isfinancial ~~intended~~statements for the Affected Periods relating to ~~better~~the ~~position~~timing usof stock-based compensation expense recognition (the “Error”). In particular, the Company did not apply the proper accounting for ~~stronger~~changes made in April 2024 to the retirement provision in the Company’s performance. ~~The~~stock ~~restructuring~~unit ~~plan~~and ~~will~~restricted ~~mainly~~stock ~~reduce~~unit ~~headcount~~award agreements and ~~consolidate~~did ~~facilities~~not record stock-based compensation expense in the correct periods for retirement eligible employees. As a result of ~~this~~the ~~restructuring~~changes ~~plan,~~to wethe ~~analyzed~~stock ~~the~~unit ~~need~~award toagreements ~~write-down~~in ~~inventory~~April ~~and~~2024, ~~impair~~the ~~long~~stock-~~lived~~based ~~assets,~~compensation ~~including~~expense ~~operating~~for ~~lease~~any ~~right-of-use~~employee ~~assets.~~eligible ~~During~~for retirement on or before the ~~three~~grant date should have been accelerated and ~~nine~~fully ~~months~~recognized ~~ended~~on ~~September 27,~~the ~~2025~~grant date. Further, wethe ~~recorded~~stock-based ~~total~~compensation ~~charges,~~expense ~~net~~related ofto ~~$0.6~~employees ~~million~~expected to become retirement eligible during the vesting period should have been accelerated and ~~$1.6~~recognized ~~million,~~from ~~respectively.~~the ~~Cumulative~~grant date through the ~~nine~~retirement ~~months~~eligible ~~ended~~date ~~September 27,~~instead ~~2025,~~of webeing ~~recorded~~recognized ~~aggregate~~over ~~total~~the ~~charges~~typical ofvesting ~~$30.8~~period ~~million~~applicable ~~($2.1~~to ~~million~~other ofemployees. ~~which~~The ~~was~~correction ~~recorded~~for asthe ~~cost~~Error ofimpacted ~~sales~~(i). Asselling, ofgeneral ~~September 27~~and administrative expenses, ~~2025~~(ii) accrued and other liabilities, we(iii) ~~estimate~~other ~~the~~long-term ~~remaining~~liabilities, ~~amount~~and of(iv) additional paid-in capital.

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~~charges~~Additionally, ~~related~~the Company corrected certain immaterial items that were previously corrected out of period and that were previously identified and concluded as immaterial, individually and in the aggregate, to ~~this~~its ~~initiative~~consolidated ~~will~~financial bestatements $0during the Affected Periods.~~5 million~~ These items primarily related to (i) revenue and cost of ~~total~~sales ~~pre~~being recognized in the wrong period, which also impacted accounts receivable, contract assets, inventory, and other current assets (ii) employee compensation and benefits costs being recorded in the wrong period which also impacted accrued and other liabilities and other long-term liabilities, and (iii) incorrect netting of contract liabilities against contract assets. In addition, the tax ~~restructuring~~effects ~~charges~~of ~~during~~these ~~2025~~adjustments ~~for~~impacted ~~facility~~other ~~consolidation~~current ~~related~~assets ~~expenses~~and deferred income taxes.

InFor the ~~Electronics Systems segment, we recorded less than $0.1 million of other restructuring charges during the~~ three months ended ~~September 27~~March 29, 2025., Wethe ~~recorded~~primary ~~$0.1 million~~impact ~~each~~of ~~for severance and benefits that were classified as restructuring charges and other restructuring charges during~~ the ~~nine~~restatement ~~months~~on ~~ended September 27, 2025. Cumulative through~~ the ~~nine~~unaudited ~~months~~condensed ~~ended~~consolidated ~~September 27,~~statements ~~2025, we recorded total charges for severance and benefits that were classified as restructuring charges, accelerated depreciation~~ of ~~property~~changes ~~and~~in ~~equipment~~shareholders’ ~~that~~equity was ~~classified~~a asdecrease ~~restructuring~~to ~~charges,~~net ~~charges~~income ~~for~~and ~~inventory~~an ~~write~~increase ~~down~~to ~~that~~stock-based ~~was~~compensation ~~classified as cost~~ of ~~sales, and other restructuring of~~ $9.61 million, ~~$0.3 million, $0.3 million,~~ and $010.36 million, respectively.

InThis ~~the~~Quarterly ~~Structural~~Report ~~Systems~~on ~~segment,~~Form we10-Q ~~recorded~~(“Form ~~charges~~10-Q”) offor ~~$0.6 million during~~ the ~~three~~quarter ~~months~~ ended ~~September 27~~April 4, ~~2025~~2026 ~~for~~includes ~~other~~the ~~restructuring~~impact ~~charges. We recorded (credits) charges~~ of ~~($0.2) million~~the ~~and~~restatement ~~$1.6 million~~on ~~during~~ the ~~nine~~comparative ~~months~~unaudited ~~ended~~quarterly ~~September 27,~~financial ~~2025~~information for ~~severance~~the ~~and~~quarter ~~benefits~~ended ~~that~~March ~~were classified as restructuring charges and other restructuring charges~~29, ~~respectively~~2025. ~~Cumulative~~In ~~through the nine months ended September 27~~addition, ~~2025,~~our wefuture ~~recorded~~Form ~~total~~10-Qs ~~charges~~ for ~~severance~~subsequent ~~and~~quarterly ~~benefits~~periods ~~that~~during ~~were~~2026 ~~classified~~will asreflect ~~restructuring~~the ~~charges,~~impact ~~accelerated depreciation~~ of ~~property~~the ~~and~~restatement ~~equipment/impairment~~in ofthe ~~property~~2025 ~~and~~comparative ~~equipment~~prior ~~that~~quarter ~~was~~and ~~classified~~year-to-date asperiods. ~~restructuring~~Certain ~~charges,~~reclassifications ~~charges~~have ~~for~~been ~~inventory~~made ~~write~~to ~~down~~prior ~~that~~period ~~was~~amounts ~~classified~~to asconform ~~cost~~to ofthe ~~sales,~~current ~~and~~year’s ~~other restructuring of $7~~presentation.~~4 million,~~ ~~$2.0 million, $1.8 million, and $9.0 million, respectively.~~

~~Our~~The ~~restructuring~~account ~~activities~~balances ~~during~~labeled “As Previous Reported” in the ~~nine~~following ~~months~~tables for the quarter ended ~~September 27~~March 29, 2025 ~~were~~represent the previously reported unaudited balances in our Form 10-Q for the quarter ended March 29, 2025. The effects of the prior period errors on our unaudited condensed consolidated financial statements are as follows (dollars in thousands, except per share data):

	December 31, 2024		Nine Months Ended September 27, 2025								September 27, 2025
	Balance		Charges		Cash Payments		Non-Cash Payments		Change in Estimates		Balance
Severance and benefits	$	1,543	$	127	$	(867)	$	—	$	(212)	$	591
Other	389		1,701		(1,701)		—		—		389
Ending balance	$	1,932	$	1,828	$	(2,568)	$	—	$	(212)	$	980

~~The~~Table ~~restructuring activities accrual for severance and benefits and other~~ of ~~$1.0 million as of September 27, 2025 was included as part of accrued and other liabilities and is expected to be paid out during 2025.~~Contents

Note 3. Derivative Financial Instruments


	March 29, 2025
Unaudited Condensed Consolidated Balance Sheet:	As Previously Reported		Adjustments (B)			As Restated
Assets
Current Assets
Cash and cash equivalents	$	30,732	$	—		$	30,732
Accounts receivable, net of allowance for credit losses of $2,122 at March 29, 2025	119,154		(1,307)			117,847
Contract assets	210,897		(434)			210,463
Inventories	197,414		595			198,009
Production cost of contracts	6,699		—			6,699

Other current assets	13,641		714			14,355

Total Current Assets	578,537		(432)			578,105
Property and Equipment, Net of Accumulated Depreciation of $197,524 at March 29, 2025	109,075		—			109,075
Operating Lease Right-of-Use Assets	26,423		—			26,423
Goodwill	244,600		—			244,600
Intangibles, Net	145,403		—			145,403
Deferred Income Taxes	4,245		167		(A)	4,412
Other Assets	20,332		—			20,332
Total Assets	$	1,128,615	$	(265)		$	1,128,350
Liabilities and Shareholders’ Equity
Current Liabilities
Accounts payable	$	80,290	$	—		$	80,290
Contract liabilities	37,496		—			37,496
Accrued and other liabilities	34,365		(1,677)		(A)	32,688
Operating lease liabilities	8,721		—			8,721
Current portion of long-term debt	12,500		—			12,500

Total Current Liabilities	173,372		(1,677)			171,695
Long-Term Debt, Less Current Portion	229,920		—			229,920
Non-Current Operating Lease Liabilities	19,103		—			19,103

Other Long-Term Liabilities	13,213		2,352		(A)	15,565
Total Liabilities	435,608		675			436,283
Commitments and Contingencies
Shareholders’ Equity
Common Stock - $0.01 par value; 35,000,000 shares authorized; 14,868,305 shares issued and outstanding at March 29, 2025	149		—			149

Additional Paid-In Capital	219,842		17,987		(A)	237,829
Retained Earnings	463,986		(18,927)			445,059
Accumulated Other Comprehensive Income	9,030					9,030
Total Shareholders’ Equity	693,007		(940)			692,067
Total Liabilities and Shareholders’ Equity	$	1,128,615	$	(265)		$	1,128,350

Note A: The correction for the Error impacted (i) accrued and other liabilities by less than $0.1 million, (ii) other long-term liabilities by $1.9 million, and (iii) additional paid-in capital by $18.0 million. The impact to income taxes was immaterial. See description of the Error in the paragraphs above.

Note B: The correction for the other adjustments aside from the Error. Additionally, the impact of the Error and other adjustments on retained earnings. See the paragraphs above for a description of the other adjustments.

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	Three Months Ended March 29, 2025
Unaudited Condensed Consolidated Statement of Income:	As Previously Reported		Adjustments (B)			As Restated
Net Revenues	$	194,114	$	(1,633)		$	192,481
Cost of Sales	142,517		(487)			142,030
Gross Profit	51,597		(1,146)			50,451
Selling, General and Administrative Expenses	34,594		10,456		(A)	45,050
Restructuring Charges	426		—			426
Operating Income	16,577		(11,602)			4,975
Interest Expense	(3,263)		—			(3,263)



Income Before Taxes	13,314		(11,602)			1,712
Income Tax Expense	2,803		(2,493)		(A)	310
Net Income	$	10,511	$	(9,109)		$	1,402
Earnings Per Share
Basic earnings per share	$	0.71				$	0.09
Diluted earnings per share	$	0.69				$	0.09
Weighted-Average Number of Common Shares Outstanding
Basic	14,856					14,856
Diluted	15,177					15,177

Note A: The correction for the Error impacted selling, general and administrative expenses by $10.4 million. The impact to income taxes was immaterial. See description of the Error in the paragraphs above.

Note B: The correction for the other adjustments aside from the Error. See the paragraphs above for a description of the other adjustments.


	Three Months Ended March 29, 2025
Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss):	As Previously Reported		Adjustments		As Restated
Net Income	$	10,511	$	(9,109)	$	1,402
Other Comprehensive (Loss) Income, Net of Tax:
Amortization of actuarial losses and prior service costs, net of tax of $6 for the three months ended March 29, 2025.	20		—		20

Change in net unrealized losses on cash flow hedges, net of tax benefit of $715 for the three months ended March 29, 2025.	(2,374)		—		(2,374)
Other Comprehensive Loss, Net of Tax	(2,354)		—		(2,354)
Comprehensive Income (Loss)	$	8,157	$	(9,109)	$	(952)

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	Three Months Ended March 29, 2025
Unaudited Condensed Consolidated Statement of Cash Flows:	As Previously Reported		Adjustments (B)			As Restated
Cash Flows from Operating Activities
Net Income	$	10,511	$	(9,109)	(A)	$	1,402
Adjustments to Reconcile Net Income to
Net Cash Provided by Operating Activities:
Depreciation and amortization	8,584		—			8,584
Non-cash operating lease cost	2,194		—			2,194



Stock-based compensation expense	5,347		10,387		(A)	15,734
Deferred income taxes	(1,296)		—			(1,296)

Recovery of credit losses	(54)		—			(54)



Other	307		—			307
Changes in Assets and Liabilities:
Accounts receivable	(9,384)		1,308			(8,076)
Contract assets	(10,313)		325			(9,988)
Inventories	(533)		(486)			(1,019)
Production cost of contracts	(16)		—			(16)
Other assets	3,622		(709)			2,913
Accounts payable	4,929		—			4,929
Contract liabilities	3,051		—			3,051
Operating lease liabilities	(1,918)		—			(1,918)
Accrued and other liabilities	(14,260)		(1,716)		(A)	(15,976)
Net Cash Provided by Operating Activities	771		—			771
Cash Flows from Investing Activities
Purchases of property and equipment	(4,815)		—			(4,815)





Net Cash Used in Investing Activities	(4,815)		—			(4,815)
Cash Flows from Financing Activities


Borrowings from senior secured revolving credit facility	15,000		—			15,000
Repayments of senior secured revolving credit facility	(15,000)		—			(15,000)


Repayments of other debt	(96)		—			(96)






Net cash paid upon issuance of common stock under stock plans	(2,267)		—			(2,267)
Net Cash Used in Financing Activities	(2,363)		—			(2,363)
Net Decrease in Cash and Cash Equivalents	(6,407)		—			(6,407)
Cash and Cash Equivalents at Beginning of Period	37,139		—			37,139
Cash and Cash Equivalents at End of Period	$	30,732	$	—		$	30,732

Note A: The correction for the Error impacted (i) selling, general and administrative expenses which impacted net income by $10.4 million, (ii) accrued and other liabilities by less than $0.1 million, and (iii) other long-term liabilities (which is included in accrued and other liabilities above) by less than $0.1 million. See description of the Error in the paragraphs above.

Note B: The correction for the other adjustments aside from the Error. See description of the other adjustments in the paragraphs above.

Note 3. Restructuring Activities

Summary of 2022 Restructuring Plan

In April 2022, management approved and commenced a restructuring plan that is intended to better position us for stronger performance. The restructuring plan will mainly reduce headcount and consolidate facilities. As a result of this restructuring plan, we analyzed the need to write-down inventory and impair long-lived assets, including operating lease right-of-use assets. While we have completed the restructuring plan and recorded all incurred expenses as of December 31, 2025, we will be

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making payments related to such plan during 2026. Cumulative through December 31, 2025, we recorded aggregate total charges of $31.4 million.

In the Electronics Systems segment, we recorded $0.1 million during the three months ended March 29, 2025 for severance and benefits that were classified as restructuring charges. Cumulative through the three months ended March 29, 2025, we recorded total charges for severance and benefits that were classified as restructuring charges, accelerated depreciation of property and equipment that was classified as restructuring charges, charges for inventory write down that was classified as cost of sales, and other restructuring of $9.6 million, $0.3 million, $0.3 million, and $0.2 million, respectively.

In the Structural Systems segment, we recorded (credits) charges of $(0.2) million and $0.5 million during the three months ended March 29, 2025 for severance and benefits that were classified as restructuring charges and other restructuring charges, respectively. Cumulative through the three months ended March 29, 2025, we recorded total charges for severance and benefits that were classified as restructuring charges, accelerated depreciation of property and equipment/impairment of property and equipment that was classified as restructuring charges, charges for inventory write down that was classified as cost of sales, and other restructuring of $7.4 million, $2.0 million, $1.8 million, and $7.9 million, respectively.

Our restructuring activities during the three months ended April 4, 2026 were as follows (in thousands):


	December 31, 2025		Three Months Ended April 4, 2026								April 4, 2026
	Balance		Charges		Cash Payments		Non-Cash Payments		Change in Estimates		Balance
Severance and benefits	$	405	$	—	$	(62)	$	—	$	—	$	343




Other	389		—		(389)		—		—		—
Ending balance	$	794	$	—	$	(451)	$	—	$	—	$	343

The restructuring activities accrual for severance and benefits and other of $0.3 million as of April 4, 2026 was included as part of accrued and other liabilities and is expected to be paid during 2026.

Note 4. Derivative Financial Instruments

Cash Flow Hedges

Our cash flow hedges consist of forward interest rate swaps to manage our exposure to interest rate movements on a portion of our debt through January 1, 2031. Our forward interest rate swaps hedge forecasted transactions through January 1, 2031.

The notional amounts of derivative instruments are as follows:

(Dollars in thousands)

September 27,2025

December 31,2024

April 4,2026

December 31,2025

Derivative instruments designated as hedging instruments:

Interest rate contracts

150,000

The following table summarizes the fair value and presentation on the unaudited condensed consolidated balance sheets for derivative instruments:

(Dollars in thousands)

Balance Sheet Location

~~September~~April 274,~~2025~~2026

December 31,~~2024~~2025

Derivative instruments designated as hedging instruments:

Interest rate contracts

Other assets, current

2,~~897~~878

32,~~576~~547

Other assets

9,~~202~~317

149,~~606~~271

1721

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Accumulated other comprehensive income activities during the ~~nine~~three months ended ~~September~~April 274, ~~2025~~2026 were as follows (in thousands):

December 31,2024

Nine Months Ended September 27, 2025

September 27,2025

December 31,2025

Three Months Ended April 4, 2026

April 4,2026

Balance

Changes in Fair Value Recognized

Reclassifications to Income Statement

Balance

Cash flow hedges, before tax totals

1711,~~831~~543

(31,~~102)~~380

(~~2,905~~752)

1112,~~824~~171

Unrealized (losses) gains associated with our hedging transactions recognized in other comprehensive income are presented in the following table:

(Dollars in thousands)Three Months Ended

~~(Dollars in thousands)Nine Months Ended~~

September 27,2025

September 28,2024

September 27,2025

September 28,2024

April 4,2026

March 29,2025

Change in Other Comprehensive Income:

Interest rate contracts

~~(687)~~481

(52,~~060~~374)

~~(4,619)~~

~~(2,648)~~

We began reclassifying gains/losses associated with our cash flow hedges from accumulated other comprehensive income to the condensed statements of income when the Forward Interest Rate Swaps became effective as of January 1, 2024. We reclassify amounts to income as the hedged item impacts earnings and those amounts are presented in the following table:

(Dollars in thousands)Three Months Ended

~~(Dollars in thousands)Nine Months Ended~~

September 27,2025

September 28,2024

September 27,2025

September 28,2024

April 4,2026

March 29,2025

Interest rate contracts:

Interest expense

~~979~~752

~~1,350~~948

~~2,905~~

~~4,048~~

The pre-tax deferred gains recorded in other comprehensive income that will mature in the next 12 months total $2.89 million.

Note 45. Inventories

Inventories consisted of the following:

(Dollars in thousands)

September 27,2025

December 31,2024

April 4,2026

December 31,2025

Raw materials and supplies

~~162~~161,~~822~~894

158,~~865~~406

Work in process

2420,~~594~~217

3219,~~082~~613

Finished goods

54,~~401~~158

54,~~934~~769

Total

~~192~~186,~~817~~269

~~196~~182,~~881~~788

Note 56. Goodwill

We perform our annual goodwill impairment test as of the first day of the fourth fiscal quarter. If certain factors occur, including significant ~~underperformance~~under performance of our business relative to expected operating results, significant adverse economic and industry trends, significant decline in our market capitalization for an extended period of time relative to net book value, a decision to divest individual businesses within a reporting unit, or a decision to group individual businesses differently, we may be required to perform an interim impairment test prior to the fourth quarter.

We may use either a qualitative or quantitative approach when testing a reporting unit’s goodwill for impairment. The qualitative approach for potential impairment analysis is performed by evaluating a number of qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit was less than its carrying amount. If the qualitative assessment indicates that it is more-likely-than-not that the fair value of a reporting unit is less than its carrying value, we perform a quantitative assessment.

The quantitative approach for potential impairment analysis is performed by comparing the fair value of a reporting unit to its carrying value, including goodwill. Fair value is estimated by management using a combination of the income approach (which

1822

is based on a discounted cash flow model) and market approach. Management’s cash flow projections include significant judgments and assumptions, including the amount and timing of expected cash flows, long-term growth rates, and discount rates. The cash flows used in the discounted cash flow model are based on our best estimate of future revenues, gross margins, and adjusted after-tax earnings. If any of these assumptions are incorrect, it will impact the estimated fair value of a reporting unit. The market approach also requires management judgment in selecting comparable companies, business acquisitions and the transaction values observed and its related control premiums.

No material adverse factors/changes have occurred since the fourth quarter of ~~2024~~2025 that would require us to perform another qualitative or quantitative assessment as of our quarter ended ~~September~~April 274, ~~2025~~2026. As such, for the ~~third~~first quarter of ~~2025~~2026, it was also not more likely than not that the fair values of the reporting units were less than their carrying amounts and thus, the respective goodwill amounts were not deemed to be impaired.

The carrying amounts of our goodwill were as follows:

	(Dollars in thousands)
	ElectronicSystems		StructuralSystems		ConsolidatedDucommun
Gross goodwill	$	199,157	$	127,165	$	326,322
Accumulated goodwill impairment	(81,722)		—		(81,722)
Balance at December 31, 2024	$	117,435	$	127,165	$	244,600
Balance at December 31, 2025	$	117,435	$	127,165	$	244,600
Balance at September 27, 2025	$	117,435	$	127,165	$	244,600
Balance at April 4, 2026	$	117,435	$	127,165	$	244,600

Note 67. Accrued and Other Liabilities

The components of accrued and other liabilities were as follows:

(Dollars in thousands)

September 27,2025

December 31,2024

April 4,2026

December 31,2025

Accrued compensation

3120,~~252~~444

3539,~~915~~161

Accrued income tax and sales tax

~~298~~293

~~669~~353

Accrued litigation settlement costs

~~151,350~~—

—4,085

Other

117,~~327~~375

7,~~630~~472

Total

~~194~~28,~~227~~112

4451,~~214~~071

Note 78. Long-Term Debt

Long-term debt and the current period interest rates were as follows:

(Dollars in thousands)

September 27,2025

December 31,2024

April 4,2026

December 31,2025

Term loan

~~228~~198,~~125~~750

~~234~~200,~~375~~000

Revolving credit facility

—105,000

8105,~~800~~000

Total debt

~~228~~303,~~125~~750

~~243~~305,~~175~~000

Less current portion

~~(12~~5,~~500)~~000

Total long-term debt, less current portion

~~215~~298,~~625~~750

~~230~~300,~~675~~000

Less debt issuance costs - term loan

~~(579)~~1,142

~~(845)~~1,210

Total long-term debt, net of debt issuance costs - term loan

~~215~~297,~~046~~608

~~229~~298,~~830~~790

Debt issuance costs - revolving credit facility (1)

~~881~~2,850

13,~~258~~006

Weighted-average interest rate

65.1174

76.2510

(1) Included as part of other assets.

In ~~July~~November ~~2022~~2025, we completed a refinancing of ~~all~~ our existing debt by entering into a new term loan (“~~2022~~2025 Term Loan”) and a new revolving credit facility (“~~2022~~2025 Revolving Credit Facility”). The ~~2022~~2025 Term Loan is a $~~250~~200.0 million senior secured loan that matures onin ~~July~~November ~~14, 2027~~2030. The ~~2022~~2025 Revolving Credit Facility is a $~~200~~450.0 million senior secured revolving credit facility that matures onin ~~July~~November ~~14, 2027~~2030. The ~~2022~~2025 Term Loan ~~and~~replaced the 2022 Term Loan (“2022 Term Loan”) which was a $250.0 million senior secured loan. The 2025 Revolving Credit Facility, ~~collectively,~~replaced ~~represent~~the ~~our~~2022 ~~credit~~Revolving ~~facilities~~Credit Facility (“2022 Revolving Credit ~~Facilities~~Facility”) which was a $200.0 million senior secured revolving credit facility. The 2025 Term Loan and 2025

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~~The~~Revolving ~~2022~~Credit ~~Term Loan bears interest~~Facility, atcollectively ~~our~~are ~~option,~~the atnew acredit ~~rate~~facilities ~~equal to either~~ (~~i) Term Secured Overnight Financing Rate (~~“~~Term~~2025 ~~SOFR~~Credit Facilities”) ~~plus an applicable margin ranging from 1~~.~~375%~~ toThe 2.375% per year or (ii) Base Rate (defined as the highest of [a] Federal Funds Rate plus 0.50%, [b] Bank of America’s prime rate, and [c] Term SOFR plus 1.00%, and if the Base Rate is less than zero percent, it will be deemed zero percent) plus an applicable margin ranging from 0.375% to 1.375% per year, in each case based upon the consolidated total net adjusted leverage ratio. Interest payments are typically paid either on a monthly or quarterly basis, depending on the interest rate selected, on the last business day each month or quarter. In addition, the 2022 Term Loan ~~requires quarterly amortization payments of 0.625% during year one~~ and ~~year~~2022 ~~two,~~Revolving ~~1.250%~~Credit ~~during year three and year four~~Facility, ~~and~~collectively ~~1.875%~~were ~~during year five of~~ the ~~original outstanding principal balance of the~~ 2022 ~~Term~~credit ~~Loan~~facilities ~~amount,~~that onwere ~~the~~entered ~~last~~into ~~business~~in ~~day~~July ~~each~~2022 ~~quarter.~~and ~~The~~would ~~required~~have ~~quarterly~~matured ~~amortization payments began~~ in ~~the~~July ~~fourth~~2027 ~~quarter~~(“2022 ofCredit ~~2022~~Facilities”).

The ~~2022~~2025 ~~Revolving~~Term ~~Credit~~Loan ~~Facility~~ bears interest, at our option, at a rate equal to either (i) Term Secured Overnight Financing Rate (“Term SOFR”) plus an applicable margin ranging from 1.~~375~~250% to 2.~~375~~125% per year or (ii) Base Rate (defined as the highest of [a] Federal Funds Rate plus 0.50%, [b] Bank of America’s prime rate, and [c] Term SOFR plus 1.00%, and if the Base Rate is less than zero percent, it will be deemed zero percent) plus an applicable margin ranging from 0.~~375~~250% to 1.~~375~~125% per year, in each case based upon the consolidated total net adjusted leverage ratio. Interest payments are typically paid either on a monthly or quarterly basis, depending on the interest rate selected, on the last business day each month or quarter. ~~The~~In ~~undrawn~~addition, ~~portion of~~ the ~~commitment~~terms of the ~~2022~~2025 ~~Revolving~~Term ~~Credit~~Loan ~~Facility~~require isus ~~subject~~ to amake ~~commitment~~installment ~~fee~~payments ~~ranging~~of ~~from~~ 0.~~175~~625% toof ~~0.275%,~~the ~~based~~initial ~~upon~~outstanding ~~the~~principal ~~consolidated~~balance ~~total~~on ~~net~~a ~~adjusted~~quarterly ~~leverage~~basis ~~ratio~~during years one and two, ~~typically~~1.250% ~~paid~~during onyears athree ~~quarterly~~and ~~basis~~four, and 1.875% during year five, on the last business day of each calendar quarter. ~~However~~Under the 2025 Term Loan, no quarterly amortization payment was required to be paid during the ~~2022~~fourth ~~Revolving~~quarter ~~Credit~~of ~~Facility~~2025, ~~does~~instead, ~~not~~it ~~require~~began ~~any~~in ~~principal~~the ~~installment~~first quarter of 2026. For the three months ended April 4, 2026 and March 29, 2025, we made the required quarterly amortization payments of $1.3 million and zero, respectively. The required quarterly amortization due on March 31, 2025 was in our second fiscal quarter of 2025.

InThe ~~conjunction~~2025 ~~with~~Revolving ~~the~~Credit ~~closing~~Facility ofbears ~~the~~interest, ~~2022~~at ~~Credit~~our ~~Facilities~~option, weat ~~utilized~~a ~~the~~rate ~~entire~~equal $to either (i) Term SOFR plus an applicable margin ranging from 1.250% to 2.125% per year or (ii) Base Rate (defined as the highest of [a] Federal Funds Rate plus 0 ~~million~~.50%, [b] Bank of ~~proceeds~~America’s ~~from~~prime ~~the~~rate, ~~2022~~and [c] Term ~~Loan~~SOFR plus ~~our~~1.00%, ~~existing~~and ~~cash~~if onthe ~~hand~~Base Rate is less than zero percent, it will be deemed zero percent) plus an applicable margin ranging from 0.250% to ~~pay~~1.125% ~~off~~per ~~our~~year, ~~entire~~in ~~debt~~each ~~balance~~case ~~outstanding~~based upon the consolidated total net adjusted leverage ratio. Interest payments are typically paid either on a monthly or a quarterly basis, depending on the interest rate selected, on the last business day each month or quarter. The undrawn portion of ~~$254~~the commitment of the 2025 Revolving Credit Facility is subject to a commitment fee ranging from 0.~~2 million~~175% ~~under~~to ~~our~~0.250%, ~~prior~~based ~~credit~~upon ~~facilities~~the consolidated total net adjusted leverage ratio, typically paid on a quarterly basis, on the last business day each quarter. However, the 2025 Revolving Credit Facility does not require any principal installment payments.

~~For~~In ~~the~~conjunction ~~three~~with ~~months~~the ~~ended~~closing ~~September 27,~~of the 2025 ~~and~~Credit ~~September 28~~Facilities, ~~2024,~~ we ~~made~~utilized the ~~required~~entire ~~quarterly amortization payments on the 2022 Term Loan of~~ $3200.1 0 million ~~that~~of ~~was~~proceeds ~~due~~from ~~on June 30, 2025 and zero, respectively. For~~ the ~~nine months ended September 27,~~ 2025 ~~and September 28, 2024, we made the required quarterly amortization payments on the 2022~~ Term Loan ofcombined ~~$6.3~~with ~~million~~drawing ~~and~~down ~~$3.1 million, respectively. The required quarterly amortization payments due~~ on ~~March~~the ~~31,~~ 2025, ~~June~~Revolving ~~30,~~Credit ~~2025,~~Facility ~~and~~to ~~September~~pay ~~30,~~off ~~2025 were in~~ our ~~fiscal~~entire ~~second,~~debt ~~third,~~balance ~~and~~outstanding ~~fourth quarters~~ of ~~2025, respectively~~$320.0 million ~~The~~under ~~required~~the ~~quarterly~~2022 ~~amortization~~Credit ~~payment due on September 30, 2024 was in our fiscal fourth quarter of 2024~~Facilities.

As of ~~September~~April 274, ~~2025~~2026, we had $~~199~~344.8 million of unused borrowing capacity under the ~~2022~~2025 Revolving Credit Facility, after deducting $0.2 million for standby letters of credit.

As of ~~September~~April 274, ~~2025~~2026, we were in compliance with all covenants required under the ~~2022~~2025 Credit Facilities.

The ~~2022~~2025 Term Loan was considered a modification of debt for some lenders and an extinguishment of debt for other lenders, and thus, a loss of $0.23 million was recorded related to the extinguishment. In addition, the new fees incurred of $01.80 million were capitalized and will be amortized to interest expense over the life of the ~~2022~~2025 Term Loan. Further, the remaining debt issuance costs related to the ~~prior~~2022 ~~term~~Term ~~loans~~Loan of $1.0.2 million as of the modification date will be amortized to interest expense over the life of the ~~2022~~2025 Term Loan, using the effective interest method.

The ~~2022~~2025 Revolving Credit Facility that replaced the ~~prior~~2022 ~~revolving~~Revolving ~~credit~~Credit ~~facility~~Facility was considered a modification of debt except for the portion related to the ~~creditor~~creditors that isare no longer a part of the ~~2022~~2025 Revolving Credit Facility and, in which case, it was considered an extinguishment of debt. As a result, we expensed the portion of the unamortized debt issuance costs related to the ~~prior~~2022 ~~revolving~~Revolving ~~credit~~Credit ~~facility~~Facility that was considered an extinguishment of debt of $0.13 million. In addition, the new fees incurred of $12.76 million as part of the ~~2022~~2025 Revolving Credit Facility were capitalized and will be amortized to interest expense over the life of the ~~2022~~2025 Revolving Credit Facility. Further, the remaining debt issuance costs related to the ~~prior~~2022 ~~revolving~~Revolving ~~credit~~Credit ~~facility~~Facility of $0.85 million as of the modification date will also be amortized on a straight-line basis to interest expense over the life of the ~~2022~~2025 Revolving Credit Facility.

The ~~2022~~2025 Credit Facilities were entered into by us (“Parent Company”) and guaranteed by all of our domestic subsidiaries, other than two subsidiaries that were considered minor (“Subsidiary Guarantors”). The Subsidiary Guarantors jointly and severally guarantee the ~~2022~~2025 Credit Facilities. The Parent Company has no independent assets or operations, and, therefore, no consolidating financial information for the Parent Company and its subsidiaries is presented.

In ~~May~~November ~~2023~~2021, we ~~completed~~entered ainto ~~public~~U.S. ~~offering~~dollar-one month London Interbank Offered Rate (“LIBOR”) forward interest rate swaps designated as cash flow hedges, all with an effective date of ~~our~~January ~~common~~1, ~~stock~~2024, ~~resulting~~for inan ~~net~~aggregate ~~proceeds~~total notional amount of $85150.10 million., Weweighted ~~utilized~~average ~~the~~fixed ~~net~~rate ~~proceeds~~of ~~plus~~1.8%, ~~cash~~and all terminating on ~~hand~~January to1, ~~pay~~2031 ~~down~~(“Forward ~~$85~~Interest Rate Swaps”).~~2 million~~ The Forward Interest Rate Swaps mature on a monthly basis, with fixed amount payer payment dates on the ~~2022~~first ~~Revolving~~day ~~Credit~~of ~~Facility~~each ~~that~~calendar ~~was~~month, ~~utilized~~commencing on February 1, 2024 through January 1, 2031. The Forward Interest Rate Swaps were deemed to ~~complete~~be highly effective upon entering into the ~~acquisition~~derivative ofcontracts ~~BLR~~and ~~Aerospace~~thus, Lhedge accounting treatment was utilized.~~L.C.~~ inSee ~~April~~Note ~~2023~~1 and Note 4 for further information.

In November 2021, we entered into derivative contracts, U.S. dollar-one month LIBOR forward interest rate swaps designated as cash flow hedges, all with an effective date of January 1, 2024, for an aggregate total notional amount of $150.0 million, weighted average fixed rate of 1.8%, and all terminating on January 1, 2031 (“Forward Interest Rate Swaps”). The Forward Interest Rate Swaps mature on a monthly basis, with fixed amount payer payment dates on the first day of each calendar month, commencing on February 1, 2024 through January 1, 2031. The Forward Interest Rate Swaps were deemed to be highly 24

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~~effective~~In ~~upon~~July 2022, as a result of completing a refinancing of our existing debt by entering into the ~~derivative~~2022 ~~contracts~~Credit Facilities, ~~and~~we ~~thus,~~were ~~hedge~~required ~~accounting~~to ~~treatment~~complete ~~was~~an ~~utilized.~~amendment ~~Since~~of the Forward Interest Rate Swaps (“Amended Forward Interest Rate Swaps”). (The Forward Interest Rate Swaps were based on U.S. dollar-one month LIBOR and were amended to be based on one month Term SOFR as ~~defined~~borrowings ~~below)~~using LIBOR were ~~not~~no ~~effective~~longer ~~until~~available ~~January~~under 1the 2022 Credit Facilities. Since this was an amendment of just the reference rate as a result of the cessation of LIBOR, ~~2024~~utilizing the guidance under ASU 2020-04, we ~~only~~determined ~~recorded~~ the ~~changes~~Amended inForward ~~fair~~Interest ~~value~~Rate Swaps as of the ~~derivative~~amendment ~~instruments~~date ~~that~~to ~~were~~continue to be highly effective. ~~and~~The ~~that~~Amended ~~were~~Forward ~~designated~~Interest ~~and~~Rate ~~qualified~~Swaps asweighted ~~cash~~average ~~flow~~fixed ~~hedges~~rate inwas ~~other~~1.7% ~~comprehensive~~as ~~income~~a ~~through~~result ~~December~~of ~~31,~~the ~~2023~~difference between U.S. ~~See~~dollar-one ~~Note~~month 1LIBOR and ~~Note 3~~one ~~for~~month ~~further~~Term ~~information~~SOFR.

~~In July 2022, as a result of completing a refinancing of our existing debt, we were required to complete an amendment of the Forward Interest Rate Swaps (“Amended Forward Interest Rate Swaps”)~~Note 9. The Forward Interest Rate Swaps were based on U.S. dollar-one month LIBOR and were amended to be based on one month Term SOFR as borrowings using LIBOR were no longer available under the 2022 Credit Facilities. Since this was an amendment of just the reference rate as a result of the cessation of LIBOR, utilizing the guidance under ASU 2020-04, we determined the Amended Forward Interest Rate Swaps as of the amendment date to continue to be highly effective. The Amended Forward Interest Rate Swaps weighted average fixed rate is 1.7%, as a result of the difference between U.S. dollar-one month LIBOR and one month Term SOFR.Indemnifications

Note 8. Indemnifications

We have made guarantees and indemnities under which we may be required to make payments to a guaranteed or indemnified party, in relation to certain transactions, including revenue transactions in the ordinary course of business. Additionally, we indemnify our directors and officers to the maximum extent permitted under the laws of the State of Delaware and have a directors and officers insurance policy that may reduce our exposure in certain circumstances and may enable us to recover a portion of future amounts that may be payable, if any. Moreover, in connection with certain performance center leases, we have indemnified our lessors for certain claims arising from the performance center or the lease.

The duration of the guarantees and indemnities varies and, in many cases, is indefinite but subject to applicable statutes of limitations. The majority of guarantees and indemnities do not provide any limitations on the maximum potential future payments we could be obligated to make. Historically, payments related to these guarantees and indemnities have been immaterial. We estimate the fair value of our indemnification obligations as insignificant based on this history and insurance coverage and have, therefore, not recorded any liability for these guarantees and indemnities in the accompanying unaudited condensed consolidated balance sheets.

Note 910. Income Taxes

The provision for income taxes is determined using an estimated annual effective tax rate. Our effective tax rate may be subject to fluctuations during the year as new information is obtained, which may affect the assumptions used to estimate the annual effective tax rate, including factors such as expected R&D tax credits, non-deductible book compensation expenses, tax deductions for Foreign Derived Intangible Income, valuation allowances against deferred tax assets, recognition or derecognition of tax benefits related to uncertain tax positions, and changes in or the interpretation of tax laws in jurisdictions where we conduct business. Also, excess tax benefits and tax detriments related to our equity compensation recognized in the unaudited condensed consolidated income statement could result in fluctuations in our effective tax rate period-over-period depending on the volatility of our stock price, number of restricted or performance stock units that vests, and stock options exercised during the period. We recognize deferred tax assets and liabilities, using enacted tax rates, for temporary differences between the financial reporting basis and the tax basis of our assets and liabilities along with net operating loss and tax credit carryovers.

We record a valuation allowance against our deferred tax assets to reduce the net carrying value to an amount that we believe is more likely than not to be realized. When we establish or reduce our valuation allowances against our deferred tax assets, the provision for income taxes will increase or decrease, respectively, in the period when that determination is made.

We recorded an income tax ~~benefit~~expense of $181.58 million for the three months ended ~~September~~April 274, ~~2025~~2026 compared to income tax expense of $10.3 million for the three months ended ~~September~~March 2829, ~~2024~~2025. The ~~change~~increase toin income tax ~~benefit from income tax~~ expense for the ~~third~~first quarter of ~~2025~~2026 compared to the ~~third~~first quarter of ~~2024~~2025 was primarily due to higher pre-tax ~~loss,~~income ~~driven~~in bythe ~~litigation~~first ~~settlement~~quarter ~~and related costs, net~~ of ~~insurance~~2026 ~~recovery,~~compared into the ~~third~~first quarter of 2025. ~~compared~~The toincrease ~~pre-tax~~in income intax ~~the~~expense ~~third~~was ~~quarter~~partially ofoffset ~~2024.~~by Wehigher ~~recorded~~income atax ~~discrete~~benefits ~~income~~recognized ~~tax~~for ~~benefit~~net oftax ~~$23.0 million~~windfalls related to ~~the~~stock-based ~~litigation~~compensation ~~settlement~~in ~~and~~the ~~related~~first ~~costs,~~quarter ~~net~~ of ~~insurance~~2026 ~~recovery,~~compared ~~for~~to the ~~third~~first quarter of 2025.

WeOur ~~recorded~~total anamount ~~income~~of unrecognized tax ~~benefit~~benefits ofwas $125.43 million ~~for~~and ~~the nine months ended September 27, 2025 compared to income tax expense of~~ $5.40 million ~~for~~as ~~the~~of ~~nine months ended September~~April 284, ~~2024.~~2026 ~~The~~and ~~change to income tax benefit from income tax expense for the nine months ended September~~December 2731, 2025, ~~compared~~respectively. toIf ~~the nine months ended September 28~~recognized, ~~2024~~$3.2 ~~was~~million ~~primarily~~would ~~due~~affect tothe ~~pre-~~effective tax ~~loss,~~rate. ~~driven~~We byrecord ~~litigation~~interest ~~settlement~~ and ~~related~~penalty ~~costs~~charges, ~~net~~if ~~of insurance recovery~~any, inrelated ~~the~~to ~~nine~~uncertain ~~months~~tax ~~ended~~positions ~~September 27,~~as ~~2025~~a ~~compared~~component toof ~~pre-~~tax ~~income~~expense inand ~~the~~unrecognized ~~nine months ended September 28, 2024. We recorded a discrete income~~ tax ~~benefit of $23~~benefits.~~0 million~~ ~~related~~The toamounts ~~the~~accrued ~~litigation~~for ~~settlement~~interest and ~~related~~penalty ~~costs,~~charges ~~net~~as of ~~insurance recovery~~April 4, ~~for~~2026 ~~the~~and ~~nine months ended September~~December 2731, 2025 were not significant.

21We file U.S. Federal and state income tax returns. We are subject to examination by the Internal Revenue Service (“IRS”) for tax years after 2021 and by state taxing authorities for tax years after 2020. While we are no longer subject to examination prior to those periods, carryforwards generated prior to those periods may still be adjusted upon examination by the IRS or state taxing authorities if they either have been or will be used in a subsequent period. We believe we have adequately accrued for tax deficiencies or reductions in tax benefits, if any, that could result from the examination and all open audit years.

In July 2025, the U.S. enacted the One Big Beautiful Bill Act (“OBBBA”). Amongst other things, the OBBBA provides for several corporate tax provision changes including restoring the full expensing of qualified property placed in service after

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~~The~~January ~~pre-tax~~19, ~~loss~~2025, inreinstating the ~~three~~immediate expensing of U.S. research and ~~nine~~development ~~months~~expenditures ~~ended~~paid ~~September 27~~or incurred for tax years beginning after December 31, ~~2025~~2024, ~~resulted~~and changes in the ~~recognition~~computations of aU.S. ~~deferred~~taxation ~~tax~~on ~~asset~~international earnings for tax years beginning after December 31, 2025. We completed the ~~benefit~~initial assessment of the ~~net~~OBBBA ~~operating~~corporate ~~loss~~tax ~~carryforward~~provisions toas bethey ~~recognized~~relate into ~~future~~our ~~years~~financial statements. ~~Based~~The onenactment of the OBBBA did not have a material impact to our ~~expectation~~effective oftax ~~future~~rate ~~taxable~~for ~~income~~the three months ended April 4, 2026. However, we expect the OBBBA to ~~realize~~decrease ~~the~~our ~~deferred~~cash tax ~~asset~~liability ~~and~~for ~~did~~2026. ~~not~~We ~~record~~will acontinue ~~valuation~~to ~~allowance~~evaluate ~~against~~the itfull impact of the OBBBA corporate tax provision changes as additional guidance becomes available.

~~Our total amount of unrecognized tax benefits was $5.0 million and $4.5 million as of September~~Note ~~27, 2025 and December 31, 2024, respectively~~11. IfCommitments ~~recognized, $3.1 million would affect the effective tax rate. We record interest~~ and penalty charges, if any, related to uncertain tax positions as a component of tax expense and unrecognized tax benefits. The amounts accrued for interest and penalty charges as of September 27, 2025 and December 31, 2024 were not significant. As a result of statute of limitations set to expire in the fourth quarter of 2025, we expect decreases to our unrecognized tax benefits of approximately $0.5 million in the next twelve months.Contingencies

We file U.S. Federal and state income tax returns. We are subject to examination by the Internal Revenue Service (“IRS”) for tax years after 2020 and by state taxing authorities for tax years after 2019. While we are no longer subject to examination prior to those periods, carryforwards generated prior to those periods may still be adjusted upon examination by the IRS or state taxing authorities if they either have been or will be used in a subsequent period. We believe we have adequately accrued for tax deficiencies or reductions in tax benefits, if any, that could result from the examination and all open audit years.

One July 4, 2025, the U.S. enacted the One Big Beautiful Bill Act (“OBBBA”). Amongst other things, the OBBBA provides for several corporate tax provision changes including restoring the full expensing of qualified property placed in service after January 19, 2025, reinstating the immediate expensing of U.S. research and development expenditures paid or incurred for tax years beginning after December 31, 2024, and changes in the computations of U.S. taxation on international earnings for tax years beginning after December 31, 2025. We completed the initial assessment of the OBBBA corporate tax provisions as they relate to our financial statements in the third quarter of 2025. The enactment of the OBBBA did not have a material impact to our effective tax rate for the three and nine months ended September 27, 2025. However, we expect the OBBBA to decrease our cash tax liability for 2025.

Note 10. Commitments and Contingencies

Guaymas Performance Center Fire

Impact to Performance Center. In June 2020, a fire severely damaged our performance center in Guaymas, Mexico, which is part of our Structural Systems segment. There were no injuries, however, property and equipment, inventories, and tooling in this leased facility were damaged. Our Guaymas performance center, comprised of two buildings with an aggregate total of 62,000 square feet, was severely damaged. The insurance claim for damages to our operating assets and business interruption was deemed final and closed by our insurance company during the three months ended July 1, 2023. The loss of production from the Guaymas performance center was absorbed by our other existing performance centers; however, we have reestablished our operations and are in the process of certification with various customers and ramping up our manufacturing capabilities in a different leased facility with 117,000 square feet in Guaymas.

Guaymas Fire Litigation. A neighboring, non-related manufacturing facility also suffered fire damage during the same time as the fire that severely damaged our Guaymas performance center, and in November 2023, the occupant of the neighboring facility filed suit against us in U.S. District Court for the Central District of California (the “District Court”) seeking unspecified amounts for damages relating to the fire (“Guaymas Fire Litigation”). Subsequent to our quarter ended September 27, 2025, on October 3, 2025, we entered into a binding settlement term sheet (the “Term Sheet”) to resolve the Guaymas Fire Litigation against us. The Term Sheet provides for, among other things, the final dismissal of the Guaymas Fire Litigation against us with prejudice and a release of claims against us in exchange for us issuing a payment of $150.0 million, $56.0 million of which iswe expected at that time to be funded by our insurance carriers. The Term Sheet also ~~includes~~included a mutual release of all the plaintiff’s past, present, and future claims arising from the fire and an indemnification in favor of us from any future subrogation claims that may be brought by the plaintiff’s insurers. Thereafter, on October 17, 2025, we entered into a settlement agreement that memorialized the terms set forth in, and superseded the Term Sheet.

We recorded the litigation settlement costs of $150.0 million, which iswas included as part of the operating loss, and the related accrual which is included as part of accrued and other liabilities during the three months ended September 27, 2025 as such conditions existed as of the end of our fiscal third quarter. In addition, we recorded an insurance receivable of $56.0 million related to the Guaymas Fire Litigation and included as other current assets and on the same line as the litigation settlement costs as the determination that the insurance recovery receivable was probable of collection was based on the terms of the applicable insurance policies, settlement agreement, and communications with our insurance carriers. Our insurance carriers made payments directly to the plaintiff totaling $56.0 million, and on November 24, 2025, we made a payment to the plaintiff of $94.0 million and thus, the $150.0 million settlement liability was extinguished as of December 31,2025.

Subrogation Claims. Subsequent to our quarter ended September 27, 2025, on October 9, 2025, we also settled an ancillary subrogation claim for $1.4 million. We recorded the litigation settlement costs of $1.4 million, which iswas included as part of the operating loss, and the related accrual which iswas included as part of accrued and other liabilities during the three months ended September 27, 2025 as such conditions existed as of the end of our fiscal third quarter. Thereafter, on October 24, 2025, we entered into a settlement agreement that memorialized the terms agreed to on October 9, 2025. We made the $1.4 million payment to the plaintiff during the three months ended December 31, 2025. Further, in connection with the Guaymas Fire Litigation, in July 2024, we received a subrogation demand (“Additional Subrogation Claim”) from our landlord’s insurer. Subsequent to the fiscal year ended December 31, 2025, on January 7, 2026, we entered into a binding confidential agreement, (“Settlement Agreement”) to resolve the Additional Subrogation Claim against us. The Settlement Agreement provides for, among other things, the final dismissal of the Additional Subrogation Claim and a release of all claims against us, with prejudice, in exchange for us issuing a payment of $4.0 million. We recorded this litigation settlement cost, which was included as part of operating loss, and the related accrual, which was included as part of accrued and other liabilities as of December 31, 2025 as such conditions existed as of our fiscal year ended December 31, 2025. We made a payment of $4.0 million on January 14, 2026. While we do not believe there are any remaining subrogation or other claims relating to the Guaymas fire at this time, other than by an insurer of the plaintiff in the Guaymas Fire Litigation based in Mexico for payments issued to its insured for damages allegedly incurred in the Guaymas fire, and which we believe to be time barred, it is possible that we may face additional subrogation claims associated with the Guaymas Fire Litigation in the future.

22Our insurance covers damage, up to a capped amount, to the facility, equipment, unfinished inventory, and other assets at replacement cost, finished goods inventory at selling price, as well as business interruption, third party property damage, and

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~~Guaymas~~recovery ~~Fire~~related ~~Litigation,~~expenses incaused ~~July~~by ~~2024~~the fire, weless ~~received~~our aper ~~subrogation~~claim ~~demand~~deductible. ~~from~~The ~~our~~anticipated ~~landlord’s~~insurance ~~insurer.~~recoveries ~~This~~related ~~claim~~to islosses ~~going~~and ~~through~~incremental ancosts ~~arbitration~~incurred ~~proceeding~~are ~~currently~~recognized inwhen ~~Arizona~~receipt ~~for~~is ~~which~~probable. weThe ~~believe~~anticipated weinsurance ~~have~~recoveries ~~favorable~~in ~~arguments~~excess toof ~~successfully~~net ~~defend~~book ~~against~~value of the ~~claim.~~damaged Itoperating isassets ~~possible~~and ~~that~~business weinterruption ~~may~~are ~~face~~not ~~additional~~recorded ~~subrogation~~until ~~claims~~all ~~associated~~contingencies ~~with~~related ~~the~~to ~~Guaymas~~our ~~Fire~~claim ~~Litigation~~have inbeen ~~the future~~resolved.

Our insurance covers damage, up to a capped amount, to the facility, equipment, unfinished inventory, and other assets at replacement cost, finished goods inventory at selling price, as well as business interruption, third party property damage, and recovery related expenses caused by the fire, less our per claim deductible. The anticipated insurance recoveries related to losses and incremental costs incurred are recognized when receipt is probable. The anticipated insurance recoveries in excess of net book value of the damaged operating assets and business interruption are not recorded until all contingencies related to our claim have been resolved.

California’s Wage and Hour Laws Complaint

In December 2020, a representative action under California’s Private Attorneys General Act was filed against us in the Superior Court for the State of California, County of San Bernardino. We received service of process of this complaint in January 2021. The complaint alleged violations of California’s wage and hour laws relating to our current and former employees and sought attorney’s fees and penalties. We vigorously refuted and defended these claims and reached a tentative settlement of $0.8 million during the fourth quarter 2021, which was subject to court approval. Thus, we recorded accrued liabilities of $0.8 million as of December 31, 2021. During the second quarter of 2022, additional factual information was identified resulting in an increase in the amount of the tentative settlement to $0.9 million. Therefore, we recorded an additional accrued liabilities of $0.1 million for a total accrued liabilities amount of $0.9 million as of the end of the second quarter of 2022, which amount remained unchanged as of December 31, 2022 as we were awaiting final court approval of this settlement. Subsequent to final court approval and payment of the $0.9 million in January 2023, during the third quarter of 2023 and upon plaintiff’s motion, the court re-opened the settlement agreement to determine whether the class list captured all affected employees. While we appealed that determination, the appellate court upheld the trial court’s decision, and the case was returned to the trial court for the parties to re-examine the class list. Subsequent to our quarter ended June 28, 2025, and as a result of the re-examination of the class list, additional affected employees were identified and a tentative settlement was reached that will result in an additional net payment of $0.3 million, subject to court approval and which is estimated to be payable in late 2025 or early 2026. Thus, we recorded accrued liabilities of $0.3 million during the second quarter of 2025.

Groundwater

Structural Systems has been directed by California environmental agencies to investigate and take corrective action for groundwater contamination at our facilities located in El Mirage and Monrovia, California. Based on currently available information, we have established an accrual for the estimated liability for such investigation and corrective action of $1.5 million at both ~~September~~April 274, ~~2025~~2026 and December 31, ~~2024~~2025, which is reflected in other long-term liabilities on our unaudited condensed consolidated balance sheets.

Waste Disposal

Structural Systems also faces liability as a potentially responsible party for hazardous waste disposed at landfills located in Casmalia and West Covina, California. Structural Systems and other companies and government entities have entered into consent decrees with respect to these landfills with the United States Environmental Protection Agency and/or California environmental agencies under which certain investigation, remediation and maintenance activities are being performed. Based on currently available information, we preliminarily estimate that the range of our future liabilities in connection with the landfill located in West Covina, California is between $0.4 million and $3.1 million. We have established an accrual for the estimated liability in connection with the West Covina landfill, which had a balance of $0.4 million as of both ~~September~~April 274, ~~2025~~2026 and December 31, ~~2024~~2025, which is reflected in other long-term liabilities on our unaudited condensed consolidated balance sheets. We anticipate an updated estimate will be available over the next 12 to 24 months however, and will update our accrual for the estimated liability at that time, if needed. Our ultimate liability in connection with these matters will depend upon a number of factors, including changes in existing laws and regulations, the design and cost of construction, operation and maintenance activities related to a final remedy, and the allocation of liability among potentially responsible parties.

In the normal course of business, Ducommun and its subsidiaries are defendants in certain other litigation, claims and inquiries, including matters relating to environmental laws. In addition, Ducommun makes various commitments and incurs contingent liabilities in the ordinary course of business. While it is not feasible to predict the outcome of these matters, Ducommun does not presently expect that any sum it may be required to pay in connection with these matters would have a material adverse effect on its unaudited condensed consolidated financial position, results of operations or cash flows.

23 Note 12. Business Segment Information

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Note 11. Business Segment Information

We supply products and services primarily to the aerospace and defense industries. Our subsidiaries are organized into two strategic businesses, Electronic Systems and Structural Systems, each of which is an operating segment as well as a reportable segment. Electronic Systems designs, engineers and manufactures high-reliability electronic and electromechanical products used in worldwide technology-driven markets including A&D and Industrial end-use markets. Structural Systems designs, engineers and manufactures large, complex contoured aerostructure components and assemblies and supplies composite and metal bonded structures and assemblies.

Our chief operating decision maker (“CODM”) is the Chairman, President and Chief Executive Officer. The measure used by the CODM to assess segment performance is segment operating income. Monitoring of segment operating income budgeted versus actual results is used for assessing performance of the segment and in establishing management’s compensation.

Financial information by reportable segment was as follows:

	(Dollars in thousands)Three Months Ended												(Dollars in thousands)Nine Months Ended
	September 27, 2025						September 28, 2024						September 27, 2025						September 28, 2024
	Electronic Systems		Structural Systems		Total		Electronic Systems		Structural Systems (1)		Total		Electronic Systems		Structural Systems		Total		Electronic Systems		Structural Systems (1)		Total
Consolidated Net Revenues	$123,082		$89,476		$212,558		$115,412		$86,000		$201,412		$343,056		$265,876		$608,932		$324,391		$264,868		$589,259
Less: Significant Expenses
Cost of sales	90,477		65,606				84,468		64,268				248,972		198,150				235,827		201,719
Selling, general and administrative expenses	11,436		11,431				11,943		11,610				33,630		34,507				33,317		36,590
Restructuring charges	71		512				91		1,833				242		1,375				562		4,843
Segment Operating Income	$	21,098	$	11,927	33,025		$	18,910	$	8,289	27,199		$	60,212	$	31,844	92,056		$	54,685	$	21,716	76,401
Reconciliation of Profit or Loss (Segment Operating Income)
Unallocated Amounts:
Corporate general and administrative expenses (2)					(113,075)						(11,933)						(138,358)						(34,589)
Operating (Loss) Income					(80,050)						15,266						(46,302)						41,812
Interest Expense					(2,927)						(3,829)						(9,198)						(11,687)
Other Income					—						—						1,746						—
(Loss) Income Before Taxes					$	(82,977)					$	11,437					$	(53,754)					$	30,125

(1) Structural Systems restructuring charges for the three and nine months ended September 28, 2024 included zero and $0.9 million, respectively, recorded as cost of sales.

(2) Includes costs not allocated to either the Electronic Systems or Structural Systems operating segments.

	(Dollars in thousands)Three Months Ended				(Dollars in thousands)Nine Months Ended
	September 27,2025		September 28,2024		September 27,2025		September 28,2024
Depreciation and Amortization Expenses
Electronic Systems	$	3,553	$	3,575	$	10,694	$	10,869
Structural Systems	4,670		4,849		14,182		14,058
Corporate Administration	115		107		319		202
Total Depreciation and Amortization Expenses	$	8,338	$	8,531	$	25,195	$	25,129
Capital Expenditures
Electronic Systems	$	1,216	$	1,011	$	4,264	$	2,950
Structural Systems	1,029		1,295		6,272		4,172
Corporate Administration	109		—		122		3,024
Total Capital Expenditures	$	2,354	$	2,306	$	10,658	$	10,146

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	(Dollars in thousands)
	(Dollars in thousands)Three Months Ended
	September 27,2025		December 31,2024
	April 4, 2026						March 29, 2025
Total Assets
	Electronic Systems		Structural Systems		Total		Electronic Systems		Structural Systems		Total
Electronic Systems	$	551,863	$	507,428
							(As restated)		(As restated)		(As restated)
Structural Systems	547,176		551,213
Consolidated Net Revenues	$117,590		$91,432		$209,022		$109,065		$83,416		$192,481
Corporate Administration	149,531		67,460
Less: Significant Expenses
Total Assets	$	1,248,570	$	1,126,101
Cost of sales	82,771		70,018				80,785		61,245
Goodwill and Intangibles
Selling, general and administrative expenses	11,895		10,976				10,740		11,916
Electronic Systems	$	156,960	$	163,926
Restructuring charges	—		—				90		336
Structural Systems	224,667		230,265
Segment Operating Income	$	22,924	$	10,438	33,362		$	17,450	$	9,919	27,369
Total Goodwill and Intangibles	$	381,627	$	394,191
Reconciliation of Profit or Loss (Segment Operating Income)
Unallocated Amounts:
Corporate general and administrative expenses (1)					(17,642)						(22,394)
Operating Income					15,720						4,975
Interest Expense					(4,010)						(3,263)
Income Before Taxes					$	11,710					$	1,712

25(1) Includes costs not allocated to either the Electronic Systems or Structural Systems operating segments.

Additional financial information by reportable segment was as follows:


	(Dollars in thousands) Three Months Ended
	April 4, 2026		March 29, 2025
Depreciation and Amortization Expenses
Electronic Systems	$	3,584	$	3,566
Structural Systems	4,559		4,916
Corporate Administration	95		102
Total Depreciation and Amortization Expenses	$	8,238	$	8,584
Capital Expenditures
Electronic Systems	$	886	$	2,265
Structural Systems	1,475		2,114
Corporate Administration	219		13
Total Capital Expenditures	$	2,580	$	4,392

Segment assets include assets directly identifiable with each segment. Corporate assets include assets not specifically identified with a business segment, including cash. The following table summarizes our segment assets:


	(Dollars in thousands)
	April 4, 2026		December 31, 2025
Total Assets
Electronic Systems	$	560,106	$	561,954
Structural Systems	545,132		538,109
Corporate Administration	80,095		86,352
Total Assets	$	1,185,333	$	1,186,415
Goodwill and Intangibles
Electronic Systems	$	152,316	$	154,638
Structural Systems	220,940		222,801
Total Goodwill and Intangibles	$	373,256	$	377,439

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Restatement of Previously Issued Financial Statements

As disclosed in our Amendment No. 1 to Annual Report on Form 10-K for the year ended December 31, 2025 (“2025 Form 10-K/A”), we restated our audited consolidated financial statements for the year ended December 31, 2025, and our unaudited quarterly financial information for each quarter in the year ended December 31, 2025 (the “Affected Periods”), among other periods, and corrected certain other immaterial items that were previously identified and concluded as immaterial, individually and in the aggregate, to its consolidated financial statements during the Affected Periods as further described below.

While preparing the first quarter of 2026 consolidated financial statements, management identified an error in our historical consolidated financial statements for the Affected Periods relating to the timing of stock-based compensation expense recognition (the “Error”). In particular, the Company did not apply the proper accounting for changes made in April 2024 to the retirement provision in the Company’s performance stock unit and restricted stock unit award agreements and did not record stock-based compensation expense in the correct periods for retirement eligible employees. As a result of the changes to the stock unit award agreements in April 2024, the stock-based compensation expense for any employee eligible for retirement on or before the grant date should have been accelerated and fully recognized on the grant date. Further, the stock-based compensation expense related to employees expected to become retirement eligible during the vesting period should have been accelerated and recognized from the grant date through the retirement eligible date instead of being recognized over the typical vesting period applicable to other employees. The correction for the Error impacted (i) selling, general and administrative expenses, (ii) accrued and other liabilities, (iii) other long-term liabilities, and (iv) additional paid-in capital.

Additionally, the Company also corrected certain items that were previously corrected out of period and that were previously identified and concluded as immaterial, individually and in the aggregate, to its consolidated financial statements during the Affected Periods. These items primarily related to (i) revenue and cost of sales being recognized in the wrong period, which also impacted accounts receivable, contract assets, inventory, and other current assets (ii) employee compensation and benefits costs being recorded in the wrong period which also impacted accrued and other liabilities and other long-term liabilities, and (iii) incorrect netting of contract liabilities against contract assets. In addition, the tax effects of these adjustments impacted other current assets and deferred income taxes.

See Part I, Item 4 of this Quarterly Report on Form 10-Q for information regarding our controls and procedures.

Overview

Ducommun Incorporated (“Ducommun,” “the Company,” “we,” “us” or “our”) is a leading ~~global~~designer ~~provider~~and manufacturer of ~~engineering~~ and provider of manufacturing ~~services~~solutions for high-performance products ~~and~~often used in high-cost-of failure applications ~~used~~ primarily in the aerospace and defense (“A&D”), industrial, medical, and other industries (collectively, “Industrial”). We differentiate ourselves as a full-service solution-based provider, offering a wide range of value-added products and services in our primary businesses of electronics, structures and integrated solutions. We operate through two primary business segments: Electronic Systems and Structural Systems, each of which is a reportable segment.

Economic Environment

Changes in the macroeconomic environment, including volatility with respect to global trade policy, interest rates, and financial markets, can lead to economic uncertainty, an economic downturn or recession and impact the demand for our products and services as well as our supply chain. We continue to pursue strategic and operational initiatives to help address these macroeconomic pressures.

The Boeing Company

~~The~~In ~~Boeing~~its ~~Company~~2025 ~~(“Boeing”)~~Annual isReport ~~one~~on ofForm ~~our~~10-K, ~~largest~~The ~~customers~~Boeing ~~and~~Company ~~was notified by the Federal Aviation Administration~~ (“~~FAA~~Boeing”) inindicated ~~early January 2024~~ that the FAA had initiated an investigation into Boeing’s quality control system. This notification was followed by the FAA announcing actions to increase its oversight of Boeing as well as not approving production rate increases or additional production lines for the 737 MAX until it is satisfied that Boeing is in ~~full compliance with required quality control procedures. In addition~~2025, inglobal ~~July~~air ~~2024,~~traffic ~~Boeing~~expanded ~~also pleaded guilty~~ to ~~conspiracy~~near ~~fraud~~historical ~~charges,~~trend ~~which~~rates ~~may result in additional external oversight~~ on ~~its~~an ~~manufacturing~~annual ~~and quality control process~~basis. AsThe ~~discussed~~growth ~~further~~occurred ~~below~~despite ~~under~~a ~~“U.S.~~lower ~~Government~~than ~~Tariffs,”~~usual ~~during~~contribution ~~the~~from ~~second quarter of 2025,~~ the ~~United~~North ~~States~~America ~~adjusted various tariff rates~~market, ~~including~~which onhad ~~aluminum~~stagnant ~~and steel imports~~demand, ~~and~~particularly ~~announced~~in ~~broad~~the ~~reciprocal~~low-cost ~~tariffs on imports from all countries~~space. ~~The~~International ~~United~~demand ~~States~~outpaced ~~has~~domestic ~~asserted~~demand ~~that~~on ~~reciprocal~~an ~~tariff~~annual ~~rates~~basis ~~for~~as ~~many trade partners could increase from~~ the ~~10%~~international ~~baseline~~demand ~~tariff~~continue onto ~~August~~build ~~1, 2025, unless agreements are reached. In Boeing’s Q2 2025 Quarterly Report~~ on ~~Form~~the ~~10-Q,~~recovery itmomentum ~~stated~~from ~~that collectively~~2024, ~~these~~including ~~tariffs and any retaliatory actions taken by countries~~ in ~~response~~China, tolifting ~~the~~demand ~~United~~for ~~States~~wide-body ~~tariffs~~airplanes. ~~could~~Based ~~have a material impact~~ on ~~Boeing’s~~these ~~financial position~~trends, ~~results~~both ofsingle-aisle ~~operations~~ and~~/or~~ ~~cash~~wide-body ~~flows.~~demand ~~Recently,~~remain ~~Boeing~~above ~~announced~~current ~~the~~industry ~~FAA~~supply ~~has cleared Boeing’s plan to raise 737 MAX production from 38 airplanes to 42 airplanes per month~~levels. ~~Since Boeing is one of our largest customers~~Overall, if Boeing is ~~unable~~experiencing tostrong ~~meet~~demand ~~the~~from ~~full~~their ~~compliance~~airplane ofcustomers the Federal Aviation Administration’s required quality control procedures, along with the tariffs (already imposed or will be imposed), it could have a material adverse impact on our business, results of operations and financial conditionglobally.

Boeing was one of our largest customers in 2025, and the 737 MAX was one of our highest commercial end use market revenue platforms. In early January 2024, the Federal Aviation Administration (“FAA”) initiated an investigation into Boeing’s quality control system, which was followed by the agency announcing actions to increase its oversight of Boeing as well as not approving production rate increases or additional production lines for the 737 MAX until it was satisfied that Boeing attained full compliance with required quality control procedures. Subsequently, in July 2024, Boeing pleaded guilty to conspiracy fraud charges, which may result in additional external oversight on its manufacturing and quality control processes. More recently, Boeing announced that the FAA cleared Boeing’s plan to raise 737 MAX production from 38 airplanes to 42 airplanes per month.

Since Boeing is one of our largest customers, if Boeing is unable to meet the full compliance of the FAA’s required quality control procedures, in the near term, it could have a material adverse impact on our business, results of operations and financial condition.

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Airbus AE

Airbus SE (“Airbus”) is aligned with Boeing’s view on international demand as its Global Services Forecast for Asia-Pacific (including China and India) anticipates that total services demand in the region will grow at a 5.2% compound annual growth rate through 2044, reaching an estimated market value of $138.7 billion. This sustained growth is expected to be underpinned by expanding air traffic and fleet growth. The region is also expected to remain the world’s fastest growing air travel market, with passenger traffic expected to rise by 4.4% annually, well above the global average of 3.6%.

U.S. Government Tariffs

Since February 2025, the U.S. government has issued several executive orders (“Executive Orders”), under various statutes, imposing tariffs on imports from most countries with whom the U.S. engages in trade ~~(“Tariff EOs”)~~. InAs ~~response to the Tariff EOs~~such, ~~China,~~during ~~the European Union and Canada have announced~~2025, ~~and in some cases imposed, counter tariffs on goods that are imported from~~ the ~~U.S.~~United ~~Our~~States ~~business~~reached ~~imports~~bilateral ~~various~~trade ~~goods~~agreements that ~~may~~recognize betariff-free ~~subject~~trade toof ~~tariffs~~products ~~from~~within ~~certain~~the ~~countries~~scope ~~covered~~of by the ~~Tariff~~World ~~EOs~~Trade ~~and~~Organization weAgreement ~~also~~on ~~supply~~Trade ~~goods~~in toCivil ~~customers~~Aircraft ~~who~~with ~~may import those goods into a country which may consider counter tariffs and other actions. If~~ the ~~imposition~~United ~~of current tariff levels is sustained~~Kingdom, ~~our profitability~~Japan, ~~cash flows~~ and the ~~estimates~~European ~~inherent~~Union. inMoreover, ~~our financial statements could be negatively affected to~~ the ~~extent~~United weStates ~~are~~applies ~~either~~a ~~unable~~diverse torange ~~claim~~of ~~duty~~reciprocal ~~exemptions or are unable to pass on such incremental~~ tariffs to ~~our~~imports ~~customers.~~originating ~~The~~from ~~actual~~countries ~~financial~~that ~~impacts~~have ofnot ~~tariffs~~concluded ~~are~~bilateral ~~dependent~~trade ~~upon~~agreements ~~various~~with ~~factors, most notably,~~ the ~~scope~~United ofStates. ~~goods~~On ~~covered~~February by20, ~~tariffs~~2026, the ~~value~~U.S. ofSupreme ~~our~~Court ~~imports~~struck ~~subject~~down ~~to tariffs,~~ the ~~rate~~sweeping of tariffs ~~applied,~~that the ~~timing and duration of tariffs, the implementation of tariff and non-tariff countermeasures by countries subject to~~ U.S. ~~tariffs,~~government ~~and~~had ~~our~~imposed ~~ability~~through ~~to mitigate~~ the ~~impacts~~Executive ofOrders ~~tariffs~~issued bypursuant ~~availing~~to ~~ourselves~~International ofEmergency ~~applicable~~Economic ~~exemptions.~~Powers ~~Changes~~Act in(“IEEPA”) ~~any~~ of ~~these~~1977. ~~factors~~However, ~~and actual tariff costs incurred could significantly affect~~ the ~~estimates~~U.S. ~~inherent~~government insubsequently ~~our~~imposed ~~financial~~a ~~statements,~~global ~~including~~tariff ~~those~~of ~~used~~10% ~~in our estimates-at-completion~~ (~~“EACs”),~~which ~~and~~could ~~estimates~~potentially ~~supporting~~increase ~~the~~to ~~recoverability~~15%) ofthat ~~our~~went ~~inventories,~~into ~~contract~~effect ~~assets,~~on ~~intangible~~February ~~assets~~24, ~~and goodwill~~2026, and ~~could~~which ~~have~~would abe ~~material~~effective ~~effect~~for on150 ~~our~~days ~~results~~unless ofthey ~~operations~~are ~~and~~extended ~~cash~~by ~~flows in~~ the ~~periods~~U.S ~~recognized and paid~~Congress.

If the imposition of current tariff levels is sustained, our profitability, cash flows and the estimates inherent in our financial statements could be negatively affected to the extent we are either unable to claim duty exemptions or are unable to pass on such incremental tariffs to our customers. The actual financial impacts of tariffs are dependent upon various factors, most notably, the scope of goods covered by tariffs, the value of our imports subject to tariffs, the rate of tariffs applied, the timing and duration of tariffs, the implementation of tariff and non-tariff countermeasures by countries subject to U.S. tariffs, and our ability to mitigate the impacts of tariffs by availing ourselves of applicable exemptions. Changes in any of these factors and actual tariff costs incurred could significantly affect the estimates inherent in our financial statements, including those used in our estimates-at-completion (“EACs”), and estimates supporting the recoverability of our inventories, contract assets, intangible assets, and goodwill, and could have a material effect on our results of operations and cash flows in the periods recognized and paid.

U.S. Government Budget

OnIn October 1, 2025, Congress failed to reach an agreement on funding the federal government, resulting in a shutdown until an agreement is reached. This ~~has~~ resulted in the disruption of non-essential government services, with over hundreds of thousands of federal employees being furloughed or working without pay. While the impact of the shutdown on Ducommun will ultimately depend on the duration of the shutdown and outcome of the finalized agreement, Ducommun currently does not expect that the shutdown will materially impact our business or results of operations. However, should the shutdown continue for an extended period of time, it could materially impact our business or results of operations.

26In November 2025, the U.S. Government enacted a continuing resolution (“CR”) to keep the government funded through January 30, 2026 while Congress works to enact full year fiscal year 2026 (“FY26”) remaining appropriation bills or an additional CR to fund government departments and agencies after January 30, 2026. In addition, on January 7, 2026, President Trump called for increasing the FY27 U.S. military budget to $1.5 trillion, significantly higher than the $901 billion approved by Congress for FY26. However, such increase in the military budget would require congressional authorization.

~~Table~~On February 3, 2026, President Trump signed into law a funding package to end the brief U.S. Government shutdown. The legislation will ensure full year funding for the federal government through the end of ~~Contents~~September 2026, with the lone exception of funding for the Department of Homeland Security.

U.S. Taxation Legislation

OnIn July 4, 2025, the U.S. enacted the One Big Beautiful Bill Act (“OBBBA”), which, among other things, provides a corporate tax provision change in reinstating the immediate expensing of U.S. research and development expenditures paid or incurred for tax years beginning after December 31, 2024. See Note 10 ~~1 and Note 9~~ to our unaudited condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q for further information.

The OBBBA also provides a supplementary $156 billion to the ~~DoD for obligations through 2029. Congress has also begun deliberations on the~~ U.S. ~~President’s~~Department ~~budget~~of ~~request~~War (“DoW”) for ~~fiscal~~obligations ~~year~~through ~~2026~~2029.

Executive Order Regarding Modernizing Defense Acquisitions

OnIn April 9, 2025, the U.S. government issued an executive order requiring, among other things, a ~~DoD~~DoW review of its Major Defense Acquisition Programs to identify those programs that are 15% behind schedule, 15% over budget, unable to meet key performance parameters, or unaligned with the Secretary of Defense’s mission priorities for potential cancellation. Although Ducommun does not, at this time, believe the Executive Order will have a material impact on our business or results of operations, the longer-term ramifications, if any, to Ducommun will depend on a variety of factors including the formulation and implementation of the review criteria in the order, the review timeline, the Secretary of Defense’s mission priorities, and future budget determinations based on the results of such review.

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Guaymas Fire - Developments

OnSubsequent ~~October~~to 3December 31, 2025, on January 7, 2026, we entered ininto a binding ~~settlement~~confidential ~~term~~agreement ~~sheet~~ (~~the~~ “~~Term~~Confidential ~~Sheet~~Agreement”) to resolve an additional subrogation claim (“Additional Subrogation Claim”) against us related to the Guaymas fire. ~~litigation~~The Confidential Agreement provides for, among other things, the final dismissal of the Additional Subrogation Claim and a release of all claims against us, (with prejudice, in exchange for us issuing a payment of $4.0 million. We do not believe there are any remaining subrogation or other claims relating to the “Guaymas fire at this time other than by an insurer of the plaintiff in the Guaymas Fire Litigation~~”),~~ ~~and~~based ~~subsequently,~~in onMexico ~~October~~for ~~17,~~payments ~~2025~~issued to its insured for damages allegedly incurred in the Guaymas fire, which we ~~entered~~believe ~~into~~to abe ~~settlement~~time ~~agreement~~barred. ~~that~~See ~~memorialized~~Note 11 ~~the~~to ~~terms~~our ~~set~~unaudited ~~forth~~condensed consolidated financial statements included in Part I, ~~and~~Item 1 ~~superseded~~of ~~the~~this ~~Term~~Form ~~Sheet~~10-Q for further information.

OnFirst ~~October~~quarter 9,2026 2025, we also settled an ancillary subrogation claim for $1.4 million. See Note 1 and Note 10 to our condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q for further information.recap:

~~Third~~•Net ~~quarter~~revenues ~~2025~~of ~~recap:~~$209.0 million

•Net ~~revenues~~income of $~~212~~9.69 million, or 4.7% of net revenues, or $0.64 per diluted share

•~~Net~~Adjusted ~~loss~~EBITDA of $6435.4 million, or 3016.39% of net revenues~~, or $4.30 per share~~

~~•Adjusted EBITDA of $34.4 million, or 16.2% of net revenues~~31

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Results of Operations

~~Third~~First Quarter of ~~2025~~2026 Compared to ~~Third~~First Quarter of ~~2024~~2025 (As Restated)

The following table sets forth net revenues, selected financial data, the effective tax rate and diluted earnings per share:

	(Dollars in thousands, except per share data)Three Months Ended										~~(Dollars in thousands, except per share data)Nine Months Ended~~
	September 27,2025			%of Net Revenues		September 28,2024			%of Net Revenues		September 27,2025			%of Net Revenues		September 28,2024			%of Net Revenues
	April 4,2026			%of Net Revenues		March 29,2025			%of Net Revenues
Net Revenues	$	212,558		100.0	%	$	201,412		100.0	%	$	608,932		100.0	%	$	589,259		100.0	%
						(As Restated)			(As Restated)
Cost of Sales	156,083			73.4	%	148,736			73.8	%	447,122			73.4	%	438,401			74.4	%
Net Revenues	$	209,022		100.0	%	$	192,481		100.0	%
Gross Profit	56,475			26.6	%	52,676			26.2	%	161,810			26.6	%	150,858			25.6	%
Cost of Sales	152,789			73.1	%	142,030			73.8	%
Selling, General and Administrative Expenses	36,267			17.1	%	35,486			17.6	%	106,820			17.5	%	104,498			17.7	%
Gross Profit	56,233			26.9	%	50,451			26.2	%
Restructuring Charges	583			0.3	%	1,924			1.0	%	1,617			0.3	%	4,548			0.8	%
Selling, General and Administrative Expenses	40,513			19.4	%	45,050			23.5	%
Litigation Settlement and Related Costs, Net	99,675			46.9	%	—			—	%	99,675			16.4	%	—			—	%
Restructuring Charges	—			—	%	426			0.2	%
Operating (Loss) Income	(80,050)			(37.7)	%	15,266			7.6	%	(46,302)			(7.6)	%	41,812			7.1	%
Operating Income	15,720			7.5	%	4,975			2.6	%
Interest Expense	(24,~~927~~010)			(1.38)	%	(3,~~829~~263)			(1.96)	%	~~(9,198)~~			~~(1.5)~~	%	~~(11,687)~~			~~(2.0)~~	%
Other Income	—			—	%	—			—	%	1,746			0.3	%	—			—	%
Income Before Taxes	11,710			5.6	%	1,712			0.9	%
(Loss) Income Before Taxes	(82,977)			(39.0)	%	11,437			5.7	%	(53,754)			(8.8)	%	30,125			5.1	%
Income Tax Expense	1,794			nm		310			nm
Income Tax (Benefit) Expense	(18,531)			nm		1,289			nm		(12,372)			nm		5,404			nm
Net Income	$	9,916		4.7	%	$	1,402		0.7	%
Net (Loss) Income	$	(64,446)		(30.3)	%	$	10,148		5.0	%	$	(41,382)		(6.8)	%	$	24,721		4.2	%
Effective Tax Rate	15.3		%	nm		18.1		%	nm
Effective Tax (Benefit) Rate	(22.3)		%	nm		11.3		%	nm		(23.0)		%	nm		17.9		%	nm
Diluted Earnings Per Share	$	0.64		nm		$	0.09		nm
Diluted (Loss) Earnings Per Share	$	(4.30)		nm		$	0.67		nm		$	(2.77)		nm		$	1.65		nm

nm = not meaningful

2832

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Net Revenues by End-Use Market and Operating Segment

Net revenues by end-use market and operating segment during the fiscal three months ended April 4, 2026 and March 29, 2025, respectively, were as follows:

	Three Months Ended										~~Nine Months Ended~~
			(Dollars in thousands)				% of Net Revenues						~~(Dollars in thousands)~~				~~% of Net Revenues~~
	Change		~~September~~April 274,~~2025~~2026		~~September~~March 2829,~~2024~~2025		~~September~~April 274,~~2025~~2026		~~September~~March 2829,~~2024~~2025		~~Change~~		~~September 27,2025~~		~~September 28,2024~~		~~September 27,2025~~		~~September 28,2024~~
					(As Restated)				(As Restated)
Consolidated Ducommun
Military and space	$	145,~~167~~437	$	~~125~~117,~~569~~633	$	~~111~~112,~~402~~196	5956.13	%	5558.3	%	$	~~45,272~~	$	~~356,141~~	$	~~310,869~~	~~58.5~~	%	~~52.8~~	%
Commercial aerospace	(812,~~087)~~524		7683,~~539~~912		8471,~~626~~388		3640.01	%	4237.01	%	~~(25,272)~~		~~225,914~~		~~251,186~~		~~37.1~~	%	~~42.6~~	%
Industrial	5(1,~~066~~420)		107,~~450~~477		58,~~384~~897		43.96	%	24.76	%	~~(327)~~		~~26,877~~		~~27,204~~		~~4.4~~	%	~~4.6~~	%
Total	$	1116,~~146~~541	$	~~212~~209,~~558~~022	$	~~201~~192,~~412~~481	100.0	%	100.0	%	$	~~19,673~~	$	~~608,932~~	$	~~589,259~~	~~100.0~~	%	~~100.0~~	%
Electronic Systems
Military and space	$	85,~~206~~349	$	9389,~~639~~440	$	8584,~~433~~091	76.1	%	7477.01	%	$	~~34,276~~	$	~~262,201~~	$	~~227,925~~	~~76.5~~	%	~~70.3~~	%
Commercial aerospace	(54,~~602)~~596		1820,~~993~~673		2416,~~595~~077		1517.46	%	2114.37	%	~~(15,284)~~		~~53,978~~		~~69,262~~		~~15.7~~	%	~~21.3~~	%
Industrial	5(1,~~066~~420)		107,~~450~~477		58,~~384~~897		86.53	%	48.72	%	~~(327)~~		~~26,877~~		~~27,204~~		~~7.8~~	%	~~8.4~~	%
Total	$	78,~~670~~525	$	~~123~~117,~~082~~590	$	~~115~~109,~~412~~065	100.0	%	100.0	%	$	~~18,665~~	$	~~343,056~~	$	~~324,391~~	~~100.0~~	%	~~100.0~~	%
Structural Systems
Military and space	$	~~5,961~~88	$	3128,~~930~~193	$	2528,~~969~~105	3530.78	%	3033.27	%	$	~~10,996~~	$	~~93,940~~	$	~~82,944~~	~~35.3~~	%	~~31.3~~	%
Commercial aerospace	(27,~~485)~~928		5763,~~546~~239		6055,~~031~~311		6469.32	%	6966.83	%	~~(9,988)~~		~~171,936~~		~~181,924~~		~~64.7~~	%	~~68.7~~	%
Total	$	38,~~476~~016	$	8991,~~476~~432	$	8683,~~000~~416	100.0	%	100.0	%	$	~~1,008~~	$	~~265,876~~	$	~~264,868~~	~~100.0~~	%	~~100.0~~	%

Net revenues for the three months ended ~~September~~April 274, ~~2025~~2026 were $~~212~~209.60 million, compared to $~~201~~192.45 million for the three months ended ~~September~~March 2829, ~~2024~~2025. The year-over-year increase in our key end-use markets were primarily due to the following:

•$1412.25 million higher revenues in our ~~military~~commercial ~~and~~aerospace ~~space~~ end-use markets due to higher rates on ~~selected~~large ~~missiles, fixed-wing~~ aircraft, and rotary-wing aircraft, ~~and ground vehicle weapon~~ platforms; ~~partially offset by~~and

•$85.14 million ~~lower~~higher revenues in our ~~commercial~~military ~~aerospace~~and space end-use markets due to ~~lower~~higher rates on ~~business~~selected ~~jet~~fixed-wing aircraft and ~~large~~missiles ~~aircraft~~platforms, partially offset by lower rates on electronic warfare, ground vehicle weapons, and radar platforms.

In addition, revenues for our industrial end-use markets for the three months ended ~~September~~April 274, ~~2025~~2026 ~~increased~~decreased $5.1.4 million compared to the three months ended ~~September~~March 2829, ~~2024~~2025, mainly due to ~~restocking~~timing ~~and~~of ~~last time buys~~orders.

Net revenues for the nine months ended September 27, 2025 were $608.9 million, compared to $589.3 million for the nine months ended September 28, 2024. The year-over-year increase in our key end-use markets were primarily due to the following:

•$45.3 million higher revenues in our military and space end-use markets due to higher rates on selected missile, rotary-wing aircraft, a classified program, radar, and ground vehicle weapon platforms; partially offset by

•$25.3 million lower revenues in our commercial aerospace end-use markets due to lower revenues from Boeing 737 MAX and in-flight entertainment products, and lower rates on rotary-wing aircraft platforms.

In addition, revenues for our industrial end-use markets for the nine months ended September 27, 2025 decreased $0.3 million compared to the nine months ended September 28, 2024, mainly due to our selective pruning of non-core business.

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Net Revenues by Major Customers

A significant portion of our net revenues are from our top ten customers as follows:

	Three Months Ended				~~Nine Months Ended~~
	September 27,2025		September 28,2024		September 27,2025		September 28,2024
	April 4,2026		March 29,2025
Boeing Company	814.84	%	513.13	%	~~7.9~~	%	~~8.0~~	%
Lockheed Martin Corporation	3.63	%	56.18	%	~~4.7~~	%	~~5.2~~	%
Northrop Grumman Corporation	64.09	%	85.82	%	~~5.8~~	%	~~6.3~~	%
RTX Corporation	2118.48	%	2017.6	%	~~19.9~~	%	~~17.3~~	%
Spirit AeroSystems Holdings, Inc.	4.6	%	5.7	%	5.9	%	6.1	%
Total top ten customers (1)	63.4	%	60.2	%
Total top ten customers (1)	61.6	%	64.0	%	61.0	%	58.9	%

(1)Includes The Boeing Company (“Boeing”), Lockheed Martin Corporation (“Lockheed”), Northrop Grumman Corporation (“Northrop”), and RTX Corporation (“RTX”), ~~and Spirit AeroSystems Holdings, Inc. (“Spirit”)~~ for the three ~~and nine~~ months ended ~~September~~April 274, ~~2025~~2026 and ~~September~~March 2829, ~~2024~~2025.

	September 27,2025		December 31,2024
Boeing	7.2	%	8.0	%
Lockheed	2.7	%	1.9	%
Northrop	7.3	%	2.7	%
RTX	11.8	%	15.6	%
Spirit	7.0	%	4.4	%

~~The~~Table ~~net revenues and accounts receivable from Boeing, Lockheed, Northrop, RTX, and Spirit were diversified over a number~~ of ~~commercial, military and space programs and were generated by both operating segments.~~Contents

Boeing, Lockheed, Northrop, and RTX, represented the following percentages of total accounts receivable:


	April 4, 2026		December 31, 2025
Boeing	14.0	%	7.3	%

Lockheed	1.6	%	1.5	%
Northrop	4.5	%	13.3	%
RTX	18.8	%	14.7	%

The net revenues and accounts receivable from Boeing, Lockheed, Northrop, and RTX were diversified over a number of commercial, military and space programs and were generated by both operating segments.

Gross Profit

Gross profit consists of net revenues less cost of sales. Cost of sales includes the cost of production of finished products and other expenses related to inventory management, manufacturing quality, and order fulfillment. Gross profit as a percentage of net revenues increased year-over-year with the three months ended ~~September~~April 274, ~~2025~~2026 of 26.69%, compared to the three months ended ~~September~~March 2829, ~~2024~~2025 of 26.2% primarily due to lower other manufacturing costs, ~~and~~favorable ~~lower~~product ~~restructuring charges as a result of nearing the completion of the wind down of our Monrovia performance center~~mix, ~~partially~~and ~~offset~~higher bymanufacturing ~~unfavorable product mix~~volume.

Gross profit as a percentage of net revenues increased year-over-year with the nine months ended September 27, 2025 of 26.6%, compared to the nine months ended September 28, 2024 of 25.6% primarily due to lower other manufacturing costs, lower restructuring charges as a result of nearing the completion of the wind down of our Monrovia performance center, and favorable product mix.

Selling, General and Administrative (“SG&A”) Expenses

SG&A expenses ~~increased~~decreased $04.85 million year-over-year in the three months ended ~~September~~April 274, ~~2025~~2026 compared to the three months ended ~~September~~March 2829, ~~2024~~2025, primarily due to ~~higher compensation and benefit costs of $1.0 million and higher other SG&A expenses of $0.9 million, partially offset by~~ lower ~~professional~~stock-based ~~services~~compensation ~~fees~~expense of $14.14 million.

SG&A expenses increased $2.3 million year-over-year in the nine months ended September 27, 2025 compared to the nine months ended September 28, 2024, primarily due to higher compensation and benefits expense of $3.0 million and other SG&A expenses of $0.7 million, partially offset by lower professional services fees of $1.4 million.

Restructuring Charges

Restructuring charges decreased $~~1.3 million and $3.8 million (including $~~0.94 million ~~recorded as cost of sales during the nine months ended September 28, 2024)~~ year-over-year in the three ~~and nine~~ months ended ~~September~~April 274, ~~2025~~2026, compared to the three ~~and nine~~ months ended ~~September~~March 2829, ~~2024~~2025, ~~respectively,~~ primarily due to the ~~winding~~completion ~~down~~as of December 31, 2025, the previously disclosed restructuring plan that was approved and commenced in April 2022. See Note 23 to our unaudited condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q for further information.

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Litigation Settlement and Related Costs, Net

Litigation settlement and related costs, net, increased $99.7 million year-over-year in each of the three and nine months ended September 27, 2025, compared to each of the three and nine months ended September 28, 2024, due to the binding settlement agreement to resolve the Guaymas Fire Litigation against us as well as settling an ancillary subrogation claim which occurred subsequent to our quarter ended September 27, 2025. See Note 1 and Note 10 to our condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q for further information.

Interest Expense

Interest expense ~~decreased~~increased $0.97 million ~~and $2.5 million~~ year-over-year in the three ~~and nine~~ months ended ~~September~~April 274, ~~2025~~2026, compared to the three ~~and nine~~ months ended ~~September~~March 2829, ~~2024~~2025, respectively, primarily due to ~~lower~~a ~~interest~~higher ~~rates~~outstanding ~~along~~debt ~~with~~balance apartially offset by lower ~~debt~~interest ~~balance~~rates.

Income Tax ~~(Benefit)~~ Expense

We recorded an income tax ~~benefit~~expense of $181.58 million for the three months ended ~~September~~April 274, ~~2025~~2026 compared to income tax expense of $10.3 million for the three months ended ~~September~~March 2829, ~~2024~~2025. The ~~change~~increase toin income tax ~~benefit from income tax~~ expense for the ~~third~~first quarter of ~~2025~~2026 compared to the ~~third~~first quarter of ~~2024~~2025 was primarily due to higher pre-tax ~~loss,~~income ~~driven~~in bythe ~~litigation~~first ~~settlement~~quarter ~~and related costs, net~~ of ~~insurance~~2026 ~~recovery,~~compared into the ~~third~~first quarter of 2025. ~~compared~~The toincrease ~~pre-tax~~in income intax ~~the~~expense ~~third~~was ~~quarter~~partially ofoffset ~~2024.~~by Wehigher ~~recorded a discrete~~ income tax ~~benefit~~benefits ofrecognized ~~$23.0~~for ~~million~~net tax windfalls related to ~~litigation~~stock-based ~~settlement~~compensation ~~and~~in ~~related~~the ~~costs,~~first ~~net~~quarter of ~~insurance~~2026 ~~recovery,~~compared ~~for~~to the ~~third~~first quarter of 2025.

WeOur ~~recorded~~total anamount ~~income~~of unrecognized tax ~~benefit~~benefits ofwas $125.43 million ~~for~~and ~~the nine months ended September 27, 2025 compared to income tax expense of~~ $5.40 million ~~for~~as ~~the~~of ~~nine months ended September~~April 284, ~~2024.~~2026 ~~The~~and ~~change to income tax benefit from income tax expense for the nine months ended September~~December 2731, 2025, ~~compared~~respectively. toIf ~~the nine months ended September 28~~recognized, ~~2024~~$3.2 ~~was~~million ~~primarily~~would ~~due~~affect tothe ~~pre-~~effective tax ~~loss,~~rate. ~~driven~~We byrecord ~~litigation~~interest ~~settlement~~ and ~~related~~penalty ~~costs~~charges, ~~net~~if ~~of insurance recovery~~any, inrelated ~~the~~to ~~nine~~uncertain ~~months~~tax ~~ended~~positions ~~September 27,~~as ~~2025~~a ~~compared~~component toof ~~pre-~~tax ~~income~~expense inand ~~the~~unrecognized ~~nine months ended September 28, 2024. We recorded a discrete income~~ tax ~~benefit of $23~~benefits.0 ~~million~~The ~~related~~amounts toaccrued ~~litigation~~for ~~settlement~~interest and ~~related~~penalty ~~costs,~~charges ~~net~~as of ~~insurance recovery~~April 4, ~~for~~2026 ~~the~~and ~~nine months ended September~~December 2731, 2025 were not significant.

~~The~~We ~~pre-~~file U.S. Federal and state income tax ~~loss~~returns. inWe are subject to examination by the ~~three~~Internal Revenue Service (“IRS”) for tax years after 2021 and ~~nine~~by ~~months~~state ~~ended~~taxing ~~September 27~~authorities for tax years after 2020. While we are no longer subject to examination prior to those periods, ~~2025~~carryforwards ~~resulted~~generated inprior ~~the~~to ~~recognition~~those ofperiods amay ~~deferred~~still ~~tax~~be ~~asset~~adjusted ~~for~~upon examination by the ~~benefit~~IRS ofor ~~the~~state ~~net~~taxing ~~operating~~authorities ~~loss~~if ~~carryforward~~they toeither have been or will be ~~recognized~~used in ~~future~~a ~~years~~subsequent period. ~~Based~~We onbelieve ~~our~~we ~~expectation~~have ofadequately ~~future~~accrued ~~taxable~~for ~~income,~~tax wedeficiencies ~~expect~~or toreductions ~~realize~~in ~~the~~tax ~~deferred~~benefits, ~~tax~~if ~~asset~~any, ~~and~~that ~~did~~could ~~not~~result ~~record~~from athe ~~valuation~~examination ~~allowance~~and ~~against~~all itopen audit years.

~~Our~~In ~~total~~July ~~amount~~2025, ofthe ~~unrecognized~~U.S. ~~tax~~enacted ~~benefits~~the ~~was $5~~OBBBA.0 ~~million~~Amongst ~~and~~other ~~$4.5~~things, ~~million~~the asOBBBA provides for several corporate tax provision changes including restoring the full expensing of ~~September 27,~~qualified ~~2025~~property ~~and~~placed ~~December 31~~in service after January 19, ~~2024~~2025, ~~respectively.~~reinstating Ifthe ~~recognized,~~immediate $3expensing of U.1S. ~~million~~research ~~would~~and ~~affect~~development ~~the~~expenditures ~~effective~~paid ~~tax~~or ~~rate.~~incurred Wefor ~~record~~tax ~~interest~~years ~~and~~beginning ~~penalty~~after ~~charges~~December 31, ~~if any~~2024, ~~related~~and tochanges ~~uncertain~~in ~~tax~~the ~~positions~~computations asof aU.S. ~~component~~taxation ofon international earnings for tax ~~expense~~years ~~and~~beginning ~~unrecognized~~after ~~tax~~December ~~benefits~~31, 2025. ~~The~~We ~~amounts~~completed ~~accrued~~the ~~for~~initial ~~interest~~assessment ~~and~~of ~~penalty~~the ~~charges~~OBBBA ascorporate oftax ~~September 27,~~provisions ~~2025~~as ~~and~~they ~~December 31,~~relate ~~2024~~to ~~were~~our ~~not~~financial ~~significant~~statements. AsThe aenactment ~~result~~ of ~~statute~~the ofOBBBA ~~limitations~~did ~~set~~not have a material impact to ~~expire~~our ineffective tax rate for the ~~fourth~~three ~~quarter~~months ofended ~~2025~~April 4, 2026. However, we expect ~~decreases~~the OBBBA to decrease our ~~unrecognized~~cash tax ~~benefits~~liability offor ~~approximately $0~~2026.~~5 million~~ inWe will continue to evaluate the ~~next~~full ~~twelve~~impact ~~months~~of the OBBBA corporate tax provision changes as additional guidance becomes available.

On July 4, 2025, the U.S. enacted the OBBBA. Amongst other things, the OBBBA provides for several corporate tax provision changes including restoring the full expensing of qualified property placed in service after January 19, 2025, reinstating the immediate expensing of U.S. research and development expenditures paid or incurred for tax years beginning after December 31, 2024, and changes in the computations of U.S. taxation on international earnings for tax years beginning after December 31, 2025. We completed the initial assessment of the OBBBA corporate tax provisions as they relate to our financial statements in the third quarter of 2025. The enactment of the OBBBA did not have a material impact to our effective tax rate for the three and nine months ended September 27, 2025. However, we expect the OBBBA to decrease our cash tax liability for 2025.

Net (Loss) Income and (Loss) Earnings per Share

Net (loss) income, net (loss) income as a percentage of revenues, and (loss) earnings per share for the three months ended September 27, 2025 were a net loss of $(64.4) million, or (30.3)% of revenues, or $(4.30) per share, respectively, compared to net income of $10.1 million, or 5.0% of revenues, or $0.67 per diluted share, respectively, for the three months ended September 28, 2024. The decrease in net income for the three months ended September 27, 2025 compared to the three months ended September 28, 2024 was primarily due to higher litigation settlement and related costs, net, of $99.7 million discussed above, partially offset by lower income tax expense of $19.8 million discussed above and higher gross profit of $3.8 million.

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Net ~~(loss)~~Income ~~income, net (loss) income as a percentage of revenues,~~ and ~~(loss)~~Earnings ~~earnings~~ per share for the nine months ended September 27, 2025 were a net loss of $(41.4) million, or (6.8)% of revenues, or $(2.77) per share, respectively, compared to net income of $24.7 million, or 4.2% of revenues, or $1.65 per diluted share, respectively, for the nine months ended September 28, 2024. The decrease in net income for the nine months ended September 27, 2025 compared to the nine months ended September 28, 2024 was primarily due to higher litigation settlement and related costs, net, of $99.7 million, partially offset by lower income tax expense of $17.8 million, higher gross profit of $11.0 million, and lower restructuring charges of $3.8 million (the prior year period included $0.9 million recorded as cost of sales).Share

32Net income, net income as a percentage of revenues, and earnings per share for the three months ended April 4, 2026 were $9.9 million, or 4.7% of revenues, or $0.64 per diluted share, respectively, compared to $1.4 million, or 0.7% of revenues, or $0.09 per diluted share, respectively, for the three months ended March 29, 2025. The increase in net income for the three months ended April 4, 2026 compared to the three months ended March 29, 2025 was primarily due to higher gross profit of $5.8 million and lower stock-based compensation expense of $4.3 million discussed above, partially offset by higher income tax expense of $1.5 million discussed above.

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Business Segment Performance

We report our financial performance based upon our two reportable operating segments: Electronic Systems and Structural Systems. The results of operations differ between our reportable operating segments due to differences in competitors, customers, extent of proprietary deliverables and performance. The following table summarizes our business segment performance for the three months ended April 4, 2026 and March 29, 2025:

	Three Months Ended										~~Nine Months Ended~~
	%		(Dollars in thousands)				% of Net Revenues				%		~~(Dollars in thousands)~~				~~% of Net Revenues~~
	Change		~~September~~April 274,~~2025~~2026		~~September~~March 2829,~~2024~~2025		~~September~~April 274,~~2025~~2026		~~September~~March 2829,~~2024~~2025		~~Change~~		~~September 27,2025~~		~~September 28,2024~~		~~September 27,2025~~		~~September 28,2024~~
					(As Restated)				(As Restated)
Net Revenues
Electronic Systems	67.68	%	$	~~123~~117,~~082~~590	$	~~115~~109,~~412~~065	5756.93	%	5756.37	%	~~5.8~~	%	$	~~343,056~~	$	~~324,391~~	~~56.3~~	%	~~55.1~~	%
Structural Systems	49.06	%	8991,~~476~~432		8683,~~000~~416		4243.17	%	4243.73	%	~~0.4~~	%	~~265,876~~		~~264,868~~		~~43.7~~	%	~~44.9~~	%
Total Net Revenues	58.56	%	$	~~212~~209,~~558~~022	$	~~201~~192,~~412~~481	100.0	%	100.0	%	~~3.3~~	%	$	~~608,932~~	$	~~589,259~~	~~100.0~~	%	~~100.0~~	%
Segment Operating Income
Electronic Systems			$	2122,~~098~~924	$	1817,~~910~~450	1719.15	%	16.40	%			$	~~60,212~~	$	~~54,685~~	~~17.6~~	%	~~16.9~~	%
Structural Systems			1110,~~927~~438		89,~~289~~919		1311.34	%	911.69	%			~~31,844~~		~~21,716~~		~~12.0~~	%	~~8.2~~	%
			33,025		27,199								92,056		76,401
			33,362		27,369
Corporate General and Administrative Expenses (1)			(~~113~~17,~~075~~642)		(1122,~~933~~394)		(538.24)	%	(511.96)	%			~~(138,358)~~		~~(34,589)~~		~~(22.7)~~	%	~~(5.9)~~	%
Total Operating (Loss) Income			$	~~(80~~15,~~050)~~720	$	154,~~266~~975	~~(37.~~7).5	%	72.6	%			$	~~(46,302)~~	$	~~41,812~~	~~(7.6)~~	%	~~7.1~~	%
Adjusted EBITDA
Electronic Systems
Operating Income			$	2122,~~098~~924	$	1817,~~910~~450							$	~~60,212~~	$	~~54,685~~
Depreciation and Amortization			3,~~553~~584		3,~~575~~566								~~10,694~~		~~10,869~~
Stock-Based Compensation Expense (2)			71102		7077								~~294~~		~~241~~
Restructuring Charges			71—		9190								~~242~~		~~562~~
			24,793		22,646		20.1	%	19.6	%			71,442		66,357		20.8	%	20.5	%
			26,610		21,183		22.6	%	19.4	%
Structural Systems
Operating Income			1110,~~927~~438		89,~~289~~919								~~31,844~~		~~21,716~~
Depreciation and Amortization			4,~~670~~559		4,~~849~~916								~~14,182~~		~~14,058~~
Stock-Based Compensation Expense (3)			6082		~~105~~179								~~381~~		~~261~~
Restructuring Charges			~~512~~—		~~1,833~~336								~~1,375~~		~~4,843~~
Inventory Purchase Accounting Adjustments			—		663								—		1,745
			15,079		15,350		16.5	%	18.4	%
			17,169		15,739		19.2	%	18.3	%			47,782		42,623		18.0	%	16.1	%
Corporate General and Administrative Expenses (1)
Operating Loss			(~~113~~17,~~075~~642)		(1122,~~933~~394)								~~(138,358)~~		~~(34,589)~~
Depreciation and Amortization			~~115~~95		~~107~~102								~~319~~		~~202~~
Stock-Based Compensation Expense (4)			511,~~677~~235		415,~~292~~478								~~16,836~~		~~12,251~~
Professional Fees Related to Unsolicited Non-Binding Acquisition Offer			—		1,033								—		2,407
			(6,312)		(6,814)
Litigation Settlement and Related Costs, Net			99,675		—								99,675		—
Adjusted EBITDA			$	35,377	$	29,719	16.9	%	15.4	%
			(7,608)		(6,501)								(21,528)		(19,729)
Adjusted EBITDA			$	34,354	$	31,884	16.2	%	15.8	%			$	97,696	$	89,251	16.0	%	15.1	%
Capital Expenditures
Electronic Systems			$	~~1,216~~886	$	12,~~011~~265							$	~~4,264~~	$	~~2,950~~
Structural Systems			1,~~029~~475		12,~~295~~114								~~6,272~~		~~4,172~~
Corporate Administration			~~109~~219		—13								~~122~~		~~3,024~~
Total Capital Expenditures			$	2,~~354~~580	$	24,~~306~~392							$	~~10,658~~	$	~~10,146~~

(1)Includes costs not allocated to either the Electronic Systems or Structural Systems operating segments.

33(2)The three months ended April 4, 2026 and March 29, 2025 each included less than $0.1 million of stock-based compensation expense recorded as cost of sales.

~~Table~~(3)The three months ended April 4, 2026 and March 29, 2025 included less than $0.1 million and $0.2 million, respectively, of ~~Contents~~stock-based compensation expense recorded as cost of sales.

(24)The three ~~and nine~~ months ended ~~September~~April 274, ~~2025~~2026 ~~each~~and March 29, 2025 included $0.13 million and $0.6 million, respectively, of stock-based compensation expense ~~recorded~~for asawards ~~cost~~with ofboth ~~sales.~~performance ~~The three~~ and ~~nine~~market ~~months~~conditions ~~ended~~that ~~September 28,~~will ~~2024~~be ~~each~~settled ~~included~~in $0cash.~~1 million of stock-based compensation expense recorded as cost of sales.~~

(3)The three and nine months ended September 27, 2025 included $0.1 million and $0.2 million, respectively, of stock-based compensation expense recorded as cost of sales. The three and nine months ended September 28, 2024 included $0.1 million and $0.2 million, respectively, of stock-based compensation expense recorded as cost of sales.

(4)The three and nine months ended September 27, 2025 included $0.6 million and $2.0 million, respectively, of stock-based compensation expense for awards with both performance and market conditions that will be settled in cash. The three and nine months ended September 28, 2024 included $0.9 million and $2.8 million, respectively, of stock-based compensation expense for awards with both performance and market conditions that will be settled in cash.

Electronic Systems

Electronic Systems net revenues in the three months ended ~~September~~April 274, ~~2025~~2026 compared to the three months ended ~~September~~March 2829, ~~2024~~2025 increased $78.75 million primarily due to the following in our key end-use markets:

•$8.2 million higher revenues in our military and space end-use markets due to higher rates on selected missile and fixed-wing aircraft platforms, partially offset by lower rates on electronic warfare platforms; partially offset by36

•$5.6 million lower revenues in our commercial aerospace end-use markets due to lower rates on large aircraft platforms.

In addition, revenues for our industrial end-use markets for the three months ended September 27, 2025 increased $5.1 million compared to the three months ended September 28, 2024 mainly due to restocking and last time buys.

Electronic Systems net revenues in the nine months ended September 27, 2025 compared to the nine months ended September 28, 2024 increased $18.7 million primarily due to the following in our key end-use markets:

•$34.3 million higher revenues in our military and space end-use markets due to higher rates on selected missiles, a classified program, fixed-wing aircraft, and radar platforms, partially offset by lower rates on selected rotary-wing aircraft platforms; partially offset by

•$15.3 million lower revenues in our commercial aerospace end-use markets due to lower rates on large aircraft platforms and lower in-flight entertainment revenues.

In addition, revenues for our industrial end-use markets for the nine months ended September 27, 2025 decreased $0.3 million compared to the nine months ended September 28, 2024 mainly due to our selective pruning of non-core business.

Electronic Systems segment operating income in the three months ended September 27, 2025 compared to the three months ended September 28, 2024 increased $2.2 million primarily due to higher manufacturing volume.

Electronic Systems segment operating income in the nine months ended September 27, 2025 compared to the nine months ended September 28, 2024 increased $5.5 million primarily due to higher manufacturing volume, favorable product mix, and lower other manufacturing costs.

Structural Systems

Structural Systems net revenues in the three months ended September 27, 2025 compared to the three months ended September 28, 2024 increased $3.5 million primarily due to the following:

•$6.0 million higher revenues in our military and space end-use markets due to higher rates on selected rotary-wing aircraft and ground vehicle weapon platforms; partially offset by

•$2.5 million lower revenues in our commercial aerospace end-use markets due to lower rates on business jet aircraft platforms, partially offset by higher rates on large aircraft platforms.

Structural Systems net revenues in the nine months ended September 27, 2025 compared to the nine months ended September 28, 2024 increased $1.0 million primarily due to the following:

•$11.0 million higher revenues in our military and space end-use markets due to higher rates on selected rotary-wing aircraft and ground vehicle weapons platforms, partially offset by lower rates on selected fixed-wing aircraft platforms; partially offset by

•$10.0 million lower revenues in our commercial aerospace end-use markets due to lower revenues from Boeing 737 MAX and lower rates on rotary-wing aircraft platforms.

The Structural Systems segment operating income in the three months ended September 27, 2025 compared to the three months ended September 28, 2024 increased $3.6 million primarily due to lower other manufacturing costs and lower restructuring charges as a result of nearing the completion of the wind down of our Monrovia performance center, partially offset by lower manufacturing volume.

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~~The Structural Systems segment operating income in the nine months ended September 27, 2025 compared to the nine months ended September 28, 2024 increased~~ •$105.13 million ~~primarily~~higher ~~due~~revenues toin ~~lower~~our ~~other~~military ~~manufacturing costs~~ and ~~lower~~space ~~restructuring~~end-use ~~charges~~markets asdue ato ~~result~~higher ofrates ~~nearing~~on ~~the~~selected ~~completion~~fixed-wing ofaircraft ~~the~~and ~~wind~~missile ~~down of our Monrovia performance center~~platforms, partially offset by ~~unfavorable~~lower ~~product~~rates ~~mix~~on electronic warfare and ~~lower~~radar ~~manufacturing~~platforms; ~~volume.~~and

•$4.6 million higher revenues in our commercial aerospace end-use markets due to higher rates on other commercial aerospace and large aircraft platforms.

In addition, revenues for our industrial end-use markets for the three months ended April 4, 2026 decreased $1.4 million compared to the three months ended March 29, 2025 mainly due to timing of orders.

Electronic Systems segment operating income in the three months ended April 4, 2026 compared to the three months ended March 29, 2025 increased $5.5 million primarily due to favorable product mix, higher manufacturing volume, and lower other manufacturing costs.

Structural Systems

Structural Systems net revenues in the three months ended April 4, 2026 compared to the three months ended March 29, 2025 increased $8.0 million primarily due to the following:

•$7.9 million higher revenues in our commercial aerospace end-use markets due to due to higher rates on large aircraft and rotary-wing aircraft platforms; and

•$0.1 million higher revenues in our military and space end-use markets due to higher rates on selected missile platforms, partially offset by lower rates on selected rotary-wing aircraft platforms.

The Structural Systems segment operating income in the three months ended April 4, 2026 compared to the three months ended March 29, 2025 increased $0.5 million primarily due to lower other manufacturing costs, partially offset by unfavorable product mix.

In June 2020, a fire severely damaged our performance center in Guaymas, Mexico, which is part of our Structural Systems segment. The loss of production from the Guaymas performance center was absorbed by our other existing performance centers, however, we have reestablished our operations and are in the process of certification with various customers and ramping up our manufacturing capabilities in a different leased facility in Guaymas. We have insurance coverage up to a capped amount, less our deductible. The insurance claim for damages to our operating assets and business interruption was deemed final and closed by our insurance company during the three months ended July 1, 2023.

A neighboring, non-related manufacturing facility, also suffered fire damage during the same time as the fire that severely damaged our Guaymas performance center and, in November 2023, the occupant of the neighboring facility filed suit against us in U.S. District Court for the Central District of California seeking unspecified amounts for damages relating to the fire. Subsequent to our quarter ended September 27, 2025, on October 3, 2025, we entered into a binding settlement term sheet (the “Term Sheet”) to resolve the Guaymas fire litigation against us. The Term Sheet provides for, among other things, the final dismissal of the Guaymas fire litigation against us with prejudice and a release of claims against us in exchange for us issuing a payment of $150.0 million, $56.0 million of which is expected to be funded by our insurance carriers. Also subsequent to our quarter ended September 27, 2025, on October 9, 2025, we settled an ancillary subrogation claim related to the fire for $1.4 million. Further, subsequent to the fiscal year ended December 31, 2025, on January 7, 2026, we settled another ancillary subrogation claim related to the fire for $4.0 million. See Note 1011 to our unaudited condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q for further information.

Corporate General and Administrative (“CG&A”) Expenses

CG&A expenses ~~increased~~decreased $~~101~~4.18 million for the three months ended ~~September~~April 274, ~~2025~~2026 compared to the three months ended ~~September~~March 2829, ~~2024~~2025, primarily due to ~~the~~lower ~~litigation~~stock-based ~~settlement~~compensation ~~and~~expense ~~related costs, net,~~ of $994.72 million ~~discussed above~~.

CG&A expenses increased $103.8 million for the nine months ended September 27, 2025 compared to the nine months ended September 28, 2024, primarily due to the litigation settlement and related costs, net, of $99.7 million discussed above and higher compensation and benefits costs of $4.2 million, partially offset by lower professional services fees of $2.0 million.

Non-GAAP Financial Measures

Adjusted earnings before interest, taxes, depreciation, amortization, stock-based compensation expense, and restructuring charges, ~~and inventory purchase accounting adjustments~~ (“Adjusted EBITDA”) were $3435.4 million and $3129.97 million for the three months ended ~~September~~April 274, ~~2025~~2026 and ~~September~~March 2829, ~~2024~~2025, respectively.

When viewed with our financial results prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and accompanying reconciliations, we believe Adjusted EBITDA provides additional useful information that clarifies and enhances the understanding of the factors and trends affecting our past performance and future prospects. We define this measure, explain how it is calculated and provide a reconciliation of this measure to the most comparable GAAP measure in the table below. Adjusted EBITDA and the related financial ratios, as presented in this Quarterly Report on Form 10-Q (“Form 10-Q”), are supplemental measures of our performance that are not required by, or presented in accordance with, GAAP. They are not a measurement of our financial performance under GAAP and should not be considered as alternatives to net income or any other performance measures derived in accordance with GAAP, or as an alternative to net cash provided by operating activities as measures of our liquidity. The presentation of these measures should not be interpreted to mean that our future results will be unaffected by unusual or nonrecurring items.

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We use Adjusted EBITDA as a non-GAAP operating performance measure internally as a complementary financial measure to evaluate the performance and trends of our businesses. We present Adjusted EBITDA and the related financial ratios, as applicable, because we believe that measures such as these provide useful information with respect to our ability to meet our operating commitments.

Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations include:

•It does not reflect our cash expenditures, future requirements for capital expenditures or contractual commitments;

•It does not reflect changes in, or cash requirements for, our working capital needs;

•It does not reflect the significant interest expense or the cash requirements necessary to service interest or principal payments on our debt;

•Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and Adjusted EBITDA does not reflect any cash requirements for such replacements;

•It is not adjusted for all non-cash income or expense items that are reflected in our statements of cash flows;

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•It does not reflect the impact on earnings of charges resulting from matters unrelated to our ongoing operations; and

•Other companies in our industry may calculate Adjusted EBITDA differently from us, limiting its usefulness as a comparative measure.

As a result of these limitations, Adjusted EBITDA and the related financial ratios should not be considered as measures of discretionary cash available to us to invest in the growth of our business or as a measure of cash that will be available to us to meet our obligations. You should compensate for these limitations by relying primarily on our GAAP results and using Adjusted EBITDA only as supplemental information. See our unaudited condensed consolidated financial statements contained in this Form 10-Q.

Even with the limitations above, we believe that Adjusted EBITDA is useful to an investor in evaluating our results of operations as this measure:

•Is widely used by investors to measure a company’s operating performance without regard to items excluded from the calculation of such terms, which can vary substantially from company to company depending upon accounting methods and book value of assets, capital structure and the method by which assets were acquired, among other factors;

•Helps investors to evaluate and compare the results of our operations from period to period by removing the effect of our capital structure from our operating performance; and

•Is used by our management team for various other purposes in presentations to our Board of Directors as a basis for strategic planning and forecasting.

The following financial items have been added back to or subtracted from our net income when calculating Adjusted EBITDA:

•Interest expense may be useful to investors for determining current cash flow;

•Income tax ~~(benefit)~~ expense may be useful to investors because it represents the taxes which may be (receivable) payable for the period and the change in deferred taxes during the period, and may (increase) reduce cash flow available for use in our business;

•Depreciation may be useful to investors because it generally represents the wear and tear on our property and equipment used in our operations;

•Amortization expense may be useful to investors because it represents the estimated attrition of our acquired customer base and the diminishing value of product rights;

•Stock-based compensation may be useful to our investors for determining current cash flow; and

•Restructuring charges may be useful to our investors in evaluating our core operating performance; .

~~•Professional fees related to unsolicited non-binding acquisition offer may be useful to our investors in evaluating our core operating performance;~~ 38

•Purchase accounting inventory step-ups may be useful to our investors as they do not necessarily reflect the current or on-going cash charges related to our core operating performance;

•Gain on sale of property and other assets may be useful to our investors in evaluating our core operating performance; and

•Litigation settlement and related costs, net, may be useful to our investors in evaluating our core operating performance.

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Reconciliations of net income to Adjusted EBITDA and the presentation of Adjusted EBITDA as a percentage of net revenues were as follows:

	(Dollars in thousands)						~~(Dollars in thousands)~~
	Three Months Ended						~~Nine Months Ended~~
	September 27,2025			September 28,2024			September 27,2025			September 28,2024
	April 4,2026			March 29,2025
Net (loss) income	$	(64,446)		$	10,148		$	(41,382)		$	24,721
				(As Restated)
Interest expense	2,927			3,829			9,198			11,687
Net income	$	9,916		$	1,402
Income tax (benefit) expense	(18,531)			1,289			(12,372)			5,404
Interest expense	4,010			3,263
Depreciation	4,037			4,285			12,305			12,339
Income tax expense	1,794			310
Amortization	4,301			4,246			12,890			12,790
Depreciation	3,943			4,277
Stock-based compensation expense (1)	5,808			4,467			17,511			12,753
Amortization	4,295			4,307
Restructuring charges (2)	583			1,924			1,617			5,405
Stock-based compensation expense (1)	11,419			15,734
Professional fees related to unsolicited non-binding acquisition offer	—			1,033			—			2,407
Restructuring charges	—			426
Inventory purchase accounting adjustments	—			663			—			1,745
Adjusted EBITDA	$	35,377		$	29,719
Gain on sale of property and other assets	—			—			(1,746)			—
Net income as a % of net revenues	4.7		%	0.7		%
Litigation settlement and related costs, net	99,675			—			99,675			—
Adjusted EBITDA as a % of net revenues	16.9		%	15.4		%
Adjusted EBITDA	$	34,354		$	31,884		$	97,696		$	89,251
Net (loss) income as a % of net revenues	(30.3)		%	5.0		%	(6.8)		%	4.2		%
Adjusted EBITDA as a % of net revenues	16.2		%	15.8		%	16.0		%	15.1		%

(1) The three ~~and nine~~ months ended ~~September~~April 274, ~~2025~~2026 ~~included $0.6 million~~ and ~~$2.0 million, respectively, of stock-based compensation expense for awards with both performance and market conditions that will be settled in cash. The three and nine months ended September~~March 2829, ~~2024~~2025 included $0.93 million and $20.8 6 million, respectively, of stock-based compensation expense for awards with both performance and market conditions that will be settled in cash. The three ~~and nine~~ months ended ~~September~~April 274, ~~2025~~2026 ~~included $0.1 million~~ and ~~$0.3 million, respectively, of stock-based compensation expense recorded as cost of sales. The three and nine months ended September~~March 2829, ~~2024~~2025 included $0.1 million and less than $0.31 million, respectively, of stock-based compensation expense recorded as cost of sales.

~~(2)~~Remaining ~~The~~Performance ~~three and nine months ended September 28, 2024 included zero and $0.9 million, respectively, of restructuring charges that were recorded as cost of sales.~~Obligations

~~Backlog~~Under generally accepted accounting principles (“GAAP”) of the United States, Accounting Standards Codification 606 (“ASC 606”), we define performance obligations as customer placed purchase orders (“PO”) with firm fixed price and firm delivery dates. The unrecognized revenue on POs are the remaining performance obligations (“RPO”). POs are subject to delivery delays or program cancellations, which are beyond our control. As such, RPO is affected by timing differences in the placement of customer orders and tends to be concentrated in several programs to a greater extent than our net revenues.

We define backlog as customer placed purchase orders (“POs”) and long-term agreements (“LTAs”) with firm fixed price and expected delivery dates of 24 months or less. The majority of the LTAs do not meet the definition of a contract under ASC 606, and thus, the backlog amount disclosed below may or may not be greater than the remaining performance obligations amount disclosed in Note 1 to our condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q. Backlog is subject to delivery delays or program cancellations, which are beyond our control. Backlog is affected by timing differences in the placement of customer orders and tends to be concentrated in several programs to a greater extent than our net revenues.


	(Dollars in thousands)
	Change		April 4, 2026		December 31, 2025
Consolidated Ducommun
Military and space	$	(13,907)	$	678,812	$	692,719
Commercial aerospace	(20,262)		381,912		402,174
Industrial	1,859		13,006		11,147
Total	$	(32,310)	$	1,073,730	$	1,106,040
Electronic Systems
Military and space	$	4,072	$	496,316	$	492,244
Commercial aerospace	7,007		56,542		49,535
Industrial	1,859		13,006		11,147
Total	$	12,938	$	565,864	$	552,926
Structural Systems
Military and space	(17,979)		$	182,496	$	200,475
Commercial aerospace	(27,269)		325,370		352,639
Total	$	(45,248)	$	507,866	$	553,114

3739

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The increase in backlog was primarily in the commercial aerospace and military and space end-use markets. $795.0 million of total backlog is expected to be delivered over the next 12 months. The following table summarizes our backlog as of September 27, 2025 and December 31, 2024:

	(Dollars in thousands)
	Change		September 27,2025		December 31,2024
Consolidated Ducommun
Military and space	$	25,964	$	650,749	$	624,785
Commercial aerospace	49,591		465,496		415,905
Industrial	(633)		19,496		20,129
Total	$	74,922	$	1,135,741	$	1,060,819
Electronic Systems
Military and space	$	2,596	$	462,142	$	459,546
Commercial aerospace	14,820		91,111		76,291
Industrial	(633)		19,496		20,129
Total	$	16,783	$	572,749	$	555,966
Structural Systems
Military and space	$	23,368	$	188,607	$	165,239
Commercial aerospace	34,771		374,385		339,614
Total	$	58,139	$	562,992	$	504,853

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Liquidity and Capital Resources

Available Liquidity

Total debt, the weighted-average interest rate, cash and cash equivalents and available credit facilities were as follows:

	(Dollars in millions)
	September 27,			December 31,
	April 4,			December 31,
	2025			2024
	2026			2025
Total debt, including long-term portion	$	~~228~~303.18		$	~~243~~305.20
Weighted-average interest rate on debt	65.1174		%	76.2510		%
Term Loan interest rate	5.8040		%	75.0281		%
Cash and cash equivalents	$	5039.91		$	3745.13
Unused Revolving Credit Facility	$	~~199~~344.8		$	~~191~~344.08

~~In July 2022, we completed a refinancing of all our existing debt by entering into a new term loan (“2022 Term Loan”) and a new revolving credit facility (“2022 Revolving~~ Credit Facility”). The 2022 Term Loan is a $250.0 million senior secured loan that matures on July 14, 2027. The 2022 Revolving Credit Facility is a $200.0 million senior secured revolving credit facility that matures on July 14, 2027. The 2022 Term Loan and 2022 Revolving Credit Facility, collectively, represent our new credit facilities (“2022 Credit Facilities”). In conjunction with the closing of the 2022 Credit Facilities, we utilized the entire $250.0 million of proceeds from the 2022 Term Loan plus our existing cash on hand to pay off our entire debt balance outstanding of $254.2 million under our prior credit facilities. At the same leverage ratio, the interest rate spread in the 2022 Credit Facilities is lower than the interest rate spread under our prior credit facilities. Interest payments are typically paid either on a monthly or quarterly basis, depending on the interest rate selected, on the last business day each month or quarter. In addition, the 2022 Term Loan requires quarterly amortization payments of 0.625% during year one and year two, 1.250% during year three and year four, and 1.875% during year five of the original outstanding principal balance of the 2022 Term Loan amount, on the last business day each quarter. Further, the undrawn portion of the commitment of the 2022 Revolving Credit Facility is subject to a commitment fee ranging from 0.175% to 0.275%, based upon the consolidated total net adjusted leverage ratio, typically paid on a quarterly basis, on the last business day each quarter. However, the 2022 Revolving Credit Facility does not require any principal installment payments. As of September 27, 2025, we were in compliance with all covenants required under the 2022 Credit Facilities. See Note 7 to our condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q for further information.

~~For~~On ~~the~~November ~~three~~24, ~~months~~2025, ~~ended~~we ~~September 27,~~completed a refinancing of our existing debt by entering into a new senior secured term loan (“2025 ~~and~~Term ~~September 28,~~Loan”) ~~2024,~~and wea ~~made~~new ~~the~~revolving ~~required~~credit ~~quarterly~~facility ~~amortization~~(“2025 ~~payments~~Revolving onCredit ~~the~~Facility”). ~~2022~~The 2025 Term Loan ofis a $3200.1 0 million senior secured loan that ~~was~~matures ~~due~~in onNovember ~~June~~2030. ~~30,~~The 2025 ~~and~~Revolving ~~zero,~~Credit ~~respectively~~Facility is a $450.0 million ~~The~~senior ~~required~~secured ~~quarterly~~revolving ~~amortization~~credit ~~payments~~facility ~~due~~that matures on ~~September~~November 3024, 2030. The 2025 ~~and~~Term ~~September~~Loan ~~30,~~replaced ~~2024,~~the ~~respectively,~~2022 ~~are~~Term ~~both~~Loan in(“2022 ~~the~~Term ~~fiscal~~Loan”) ~~fourth~~which ~~quarter~~was a $250.0 million ~~For~~senior secured loan. The 2025 Revolving Credit Facility replaced the ~~nine~~2022 ~~months~~Revolving ~~ended~~Credit ~~September 27,~~Facility (“2022 Revolving Credit Facility”) which was a $200.0 million senior secured revolving credit facility. The 2025 Term Loan and ~~September 28,~~2025 ~~2024~~Revolving Credit Facility, wecollectively ~~made~~are the ~~required~~new ~~quarterly~~credit ~~amortization~~facilities ~~payments~~(“2025 onCredit Facilities”). The 2022 Term Loan and 2022 Revolving Credit Facility, collectively were the 2022 credit facilities that were entered into in July 2022 and would have matured in July 2027 (“2022 Credit Facilities”). The terms of the 2025 Term Loan require us to make installment payments of $60.3625% ~~million~~of the initial outstanding principal balance on a quarterly basis during years one and $3two, 1.250% during years three and four, and 1.875% ~~million~~during year five, ~~respectively~~on the last business day of each calendar quarter. WeThe ~~made~~terms noof ~~voluntary~~the ~~prepayments~~2025 onRevolving ~~our~~Credit ~~term~~Facility ~~loans~~do ~~during~~not ~~each~~require us to make installment payments. However, the undrawn portion of the ~~three~~commitment ~~and~~of ~~nine~~the ~~months~~2025 ~~ended~~Revolving ~~September~~Credit Facility is subject to a commitment fee ranging from 0.175% to 0.250%, based upon the consolidated total net adjusted leverage ratio. As of April 274, 2026, we were in compliance with all covenants required under the 2025 ~~and~~Credit ~~September~~Facilities. See Note 288 to our unaudited condensed consolidated financial statements included in Part I, ~~2024~~Item 1 of this Form 10-Q for further information.

~~Subsequent~~For tothe ~~our~~three ~~quarter~~months ended ~~September 27~~April 4, ~~2025,~~2026 onand ~~October 3~~March 29, 2025, we ~~entered~~made ~~into~~ the ~~Term~~required ~~Sheet~~quarterly toamortization ~~resolve~~payments ~~the~~of ~~Guaymas~~$1.3 million ~~Fire~~and ~~Litigation~~zero, ~~against us~~respectively. The ~~Term~~required ~~Sheet~~quarterly ~~provides~~amortization ~~for,~~due ~~among~~on ~~other~~March ~~things~~31, ~~the~~2025 ~~final~~was ~~dismissal of the Guaymas Fire Litigation against us with prejudice and a release of claims against us~~ in ~~exchange~~our ~~for~~second usfiscal ~~issuing~~quarter ~~a payment~~ of ~~$150~~2025.0 ~~million,~~We ~~$56.0~~made ~~million~~no ofvoluntary ~~which~~prepayments ison ~~expected~~our toterm beloans ~~funded~~during byeach ~~our~~of ~~insurance~~the ~~carriers.~~three ~~See~~months ~~Note~~ended ~~1 and Note~~April 104, to2026 ~~our~~and ~~condensed consolidated financial statements included in Part I~~March 29, ~~Item 1 of this Form 10-Q for further information~~2025.

InSubrogation April 2022, we approved and commenced a restructuring plan that will position us for stronger performance. The restructuring plan will mainly reduce headcount and consolidate facilities. As a result of this restructuring plan, we analyzed the need to write-down inventory and impair long-lived assets, including operating lease right-of-use assets. As of September 27, 2025, we estimate the remaining amount of charges related to this initiative will be $0.5 million of total pre-tax restructuring charges during 2025 for facility consolidation related expenses. The restructuring accrual for severance and benefits and other of $1.0 million as of September 27, 2025 are expected to be paid out during 2025. On an annualized basis, we anticipate these restructuring actions will result in total cost savings of $11.0 million to $13.0 million. See Note 2 to our condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q for further information.Claim

InSubsequent ~~November~~to ~~2021,~~the wefiscal ~~entered~~year ~~into~~ended ~~derivative~~December ~~contracts~~31, ~~U.S.~~2025, ~~dollar-one~~on ~~month~~January ~~LIBOR~~7, ~~forward~~2026, ~~interest~~we ~~rate~~entered ~~swaps~~into ~~designated~~a asbinding ~~cash~~confidential ~~flow hedges~~agreement, ~~all~~(“Settlement ~~with~~Agreement”) anto ~~effective~~resolve ~~date~~the ofAdditional ~~January~~Subrogation 1,Claim ~~2024,~~against ~~for~~us. anThe ~~aggregate~~Settlement ~~total~~Agreement ~~notional~~provides ~~amount~~for, ofamong ~~$150.0~~other ~~million~~things, ~~weighted~~the ~~average~~final ~~fixed~~dismissal ~~rate~~ of ~~1.8%,~~the ~~and~~Additional ~~all~~Subrogation ~~terminating~~Claim onand ~~January~~a 1,release ~~2031~~of ~~(“Forward~~all ~~Interest~~claims ~~Rate~~against ~~Swaps”).~~us, ~~The~~with ~~Forward~~prejudice, ~~Interest~~in ~~Rate~~exchange ~~Swaps~~for ~~mature~~us onissuing a ~~monthly~~payment ~~basis,~~of ~~with~~$4.0 ~~fixed~~million. ~~amount~~We ~~payer~~made ~~payment dates on~~ the ~~first~~$4.0 ~~day~~million ofpayment ~~each calendar month, commencing~~ on ~~February 1, 2024 through~~ January 114, ~~2031~~2026. See Note ~~1, Note~~ 3,11 ~~and Note 7~~ to our unaudited condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q for further information.

39Derivatives

In November 2021, we entered into U.S. dollar-one month London Interbank Offered Rate (“LIBOR”) forward interest rate swaps designated as cash flow hedges, all with an effective date of January 1, 2024, for an aggregate total notional amount of $150.0 million, weighted average fixed rate of 1.8%, and all terminating on January 1, 2031 (“Forward Interest Rate Swaps”). The Forward Interest Rate Swaps mature on a monthly basis, with fixed amount payer payment dates on the first day of each calendar month, commencing on February 1, 2024 through January 1, 2031. Thus, the interest rate is fixed on $150 million of our debt. See Note 1, Note 4, and Note 8 to our unaudited condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q for further information.

In July 2022, as a result of completing a refinancing of our existing debt, we were required to complete an amendment of the Forward Interest Rate Swaps (“Amended Forward Interest Rate Swaps”). The Forward Interest Rate Swaps were based on U.S. dollar-one month LIBOR and were amended to be based on one month Term Secured Overnight Financing Rate (“SOFR”) as borrowings using LIBOR were no longer available under the 2022 Credit Facilities. The Amended Forward Interest Rate Swaps weighted average fixed rate is 1.7%, as a result of the difference between U.S. dollar-one month LIBOR and one month Term

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In July 2022, as a result of completing a refinancing of our existing debt, we were required to complete an amendment of the Forward Interest Rate Swaps (“Amended Forward Interest Rate Swaps”). The Forward Interest Rate Swaps were based on U.S. dollar-one month LIBOR and were amended to be based on one month Term SOFR ~~as borrowings using LIBOR are no longer available under the 2022 Credit Facilities~~. ~~The Amended Forward Interest Rate Swaps weighted average fixed rate is 1.7%, as a result of the difference between U.S. dollar-one month LIBOR and one month Term SOFR.~~ See Note 1, Note 3 4, and Note 78 to our unaudited condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q for further information.

WeCapital expect to spend a total of $18.0 million to $20.0 million for capital expenditures in 2025 financed by cash generated from operations, principally to support new contract awards in Electronic Systems and Structural Systems. As part of our strategic plan to become a supplier of higher-level assemblies and win new contract awards, additional up-front investment in tooling will be required for newer programs which have higher engineering content and higher levels of complexity in assemblies.Expenditures

We expect to spend a total of $20.0 million to $24.0 million for capital expenditures in 2026 financed by cash generated from operations, principally to support new contract awards in Electronic Systems and Structural Systems. As part of our strategic plan to become a supplier of higher-level assemblies and win new contract awards, additional up-front investment in tooling will be required for newer programs which have higher engineering content and higher levels of complexity in assemblies.

Transaction Activity

We believe the ongoing aerospace and defense subcontractor consolidation makes acquisitions an increasingly important component of our future growth. We will continue to make prudent acquisitions and capital expenditures for manufacturing equipment and facilities to support long-term contracts for commercial and military aircraft and defense programs.

Properties

We monitor our asset base, including the market dynamics of the properties we own, and we may sell such properties and/or enter into sale-leaseback transactions. Such transactions would provide cash for various capital deployment options.

WeShort ~~continue~~Term to depend on operating cash flow and the availability of our 2022 Credit Facilities to provide short-term liquidity. Cash generated from operations and bank borrowing capacity is expected to provide sufficient liquidity to meet our obligations during the next twelve months from the date of issuance of these financial statements.Liquidity

We continue to depend on operating cash flow and the availability of our 2025 Credit Facilities to provide short-term liquidity. Cash generated from operations and bank borrowing capacity is expected to provide sufficient liquidity to meet our obligations during the next twelve months from the date of issuance of these financial statements.

Cash Flow Summary

Net cash provided by operating activities for the ~~nine~~three months ended ~~September~~April 274, ~~2025~~2026 was $4111.32 million compared to $150.8 million for the ~~nine~~three months ended ~~September~~March 2829, ~~2024~~2025. The higher net cash provided by operating activities during the first ~~nine~~three months of ~~2025~~2026 was mainly due to ~~the~~higher ~~litigation~~net ~~settlement~~income and ~~related~~higher ~~costs,~~contract ~~net,~~liabilities ~~which~~as ~~impacted~~a ~~net~~result ~~loss~~of ~~but~~higher ~~has~~progress ~~not~~payments, ~~yet~~partially ~~been~~offset ~~paid~~by ~~and~~lower ~~higher~~accrued ~~accounts~~and ~~payable,~~other ~~partially~~liabilities ~~offset~~and by higher ~~contract~~accounts ~~assets~~receivable.

Net cash used in investing activities was $92.19 million for the ~~nine~~three months ended ~~September~~April 274, ~~2025~~2026, compared to $104.38 million in the ~~nine~~three months ended ~~September~~March 2829, ~~2024~~2025. The lower net cash used in investing activities during the first ~~nine~~three months of ~~2025~~2026 was mainly due to ~~proceeds~~lower ~~from~~purchases ~~the sale~~ of ~~our~~property ~~Berryville,~~and ~~Arkansas facility~~equipment. ~~See Note 1 to our condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q for further information.~~

Net cash used in financing activities was $1814.45 million for the ~~nine~~three months ended ~~September~~April 274, ~~2025~~2026, compared to $112.14 million for the ~~nine~~three months ended ~~September~~March 2829, ~~2024~~2025. The higher net cash used in financing activities during the first ~~nine~~three months of ~~2025~~2026 was mainly due to higher ~~payments~~net oncash ~~our~~paid ~~revolving~~upon ~~credit~~issuance ~~facility~~of common stock under stock plans related to the release of vested performance stock units and ~~term~~higher ~~loan~~stock options exercised, both of which are net settled.

Off-Balance Sheet Arrangements

Our off-balance sheet arrangements consist of operating and finance leases not recorded as a result of the practical expedients utilized, right of offset of industrial revenue bonds and associated failed sales-leasebacks on property and equipment, and indemnities, none of which we believe may have a material current or future effect on our financial condition, liquidity, capital resources, or results of operations.

Critical Accounting Policies

The preparation of our unaudited condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States requires estimation and judgment that affect the reported amounts of net revenues, expenses, assets and liabilities. For a description of our critical accounting policies, please refer to “Critical Accounting Policies” in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our ~~2024~~2025 ~~Annual Report on~~ Form 10-K/A. There have been no material changes in any of our critical accounting policies during the three months ended ~~September~~April 274, ~~2025~~2026.

Recent Accounting Pronouncements

See “Part I, Item 1. Ducommun Incorporated and Subsidiaries—Notes to Condensed Consolidated Financial Statements—Note 1. Summary of Significant Accounting Policies—Recent Accounting Pronouncements” for further information.

~~Item 3. Quantitative and Qualitative Disclosures About Market Risk~~41

Our main market risk exposure relates to changes in U.S. interest rates on our outstanding long-term debt. At September 27, 2025, we had total borrowings of $228.1 million under our 2022 Credit Facilities.

The 2022 Term Loan bears interest, at our option, at a rate equal to either (i) Term Secured Overnight Financing Rate (“Term SOFR”) plus an applicable margin ranging from 1.375% to 2.375% per year or (ii) Base Rate (defined as the highest of [a]

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~~Federal Funds Rate plus 0~~Item 3.~~50%,~~ ~~[b]~~Quantitative ~~Bank of America’s prime rate,~~ and ~~[c]~~Qualitative ~~Term~~Disclosures ~~SOFR~~About ~~plus~~Market 1.00%, and if the Base Rate is less than zero percent, it will be deemed zero percent) plus an applicable margin ranging from 0.375% to 1.375% per year, in each case based upon the consolidated total net adjusted leverage ratio.Risk

~~The~~Our ~~2022~~main ~~Revolving~~market ~~Credit~~risk ~~Facility~~exposure ~~bears~~relates ~~interest, at our option, at a rate equal~~ to ~~either~~changes ~~(i)~~in ~~Term SOFR plus an applicable margin ranging from 1~~U.~~375% to 2~~S.~~375%~~ ~~per~~interest ~~year~~rates oron ~~(ii)~~our ~~Base~~outstanding ~~Rate~~long-term ~~(defined as the highest of [a] Federal Funds Rate plus 0~~debt.~~50%,~~ ~~[b]~~At ~~Bank of America’s prime rate~~April 4, ~~and [c] Term SOFR plus 1.00%~~2026, ~~and~~we ifhad ~~the~~total ~~Base~~borrowings ~~Rate~~of ~~is less than zero percent, it will be deemed zero percent) plus an applicable margin ranging from 0~~$303.~~375%~~8 tomillion ~~1.375%~~under ~~per~~our ~~year,~~2025 inCredit ~~each case based upon the consolidated total net adjusted leverage ratio~~Facilities.

The 2025 Term Loan bears interest, at our option, at a rate equal to either (i) Term Secured Overnight Financing Rate (“Term SOFR”) plus an applicable margin ranging from 1.250% to 2.125% per year or (ii) Base Rate (defined as the highest of [a] Federal Funds Rate plus 0.50%, [b] Bank of America’s prime rate, and [c] Term SOFR plus 1.00%, and if the Base Rate is less than zero percent, it will be deemed zero percent) plus an applicable margin ranging from 0.250% to 1.125% per year, in each case based upon the consolidated total net adjusted leverage ratio.

The 2025 Revolving Credit Facility bears interest, at our option, at a rate equal to either (i) Term SOFR plus an applicable margin ranging from 1.250% to 2.125% per year or (ii) Base Rate (defined as the highest of [a] Federal Funds Rate plus 0.50%, [b] Bank of America’s prime rate, and [c] Term SOFR plus 1.00%, and if the Base Rate is less than zero percent, it will be deemed zero percent) plus an applicable margin ranging from 0.250% to 1.125% per year, in each case based upon the consolidated total net adjusted leverage ratio.

A hypothetical 10% increase or decrease in the interest rate would have an immaterial impact on our financial condition and results of operations.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

~~The~~Under ~~Company’s~~the ~~chief~~supervision ~~executive~~and ~~officer~~with the participation of our management, including the Chief Executive Officer (“CEO”) and ~~chief~~the ~~financial~~Chief ~~officer~~Financial Officer (“CFO”), ~~have~~we ~~conducted~~carried out an evaluation of the ~~Company’s~~effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) ofunder the Securities Exchange Act of 1934, as amended (“Exchange Act”) and have concluded that ~~such~~as ~~disclosure~~of ~~controls~~April 4, ~~and~~2026 ~~procedures~~due ~~were~~to ~~effective~~the asexistence of the ~~end~~material ofweakness ~~the~~in ~~period~~our ~~covered~~internal bycontrol ~~this~~over ~~report~~financial reporting described below, our disclosure controls and procedures were not effective.

Material Weakness in Internal Control Over Financial Reporting

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.

As previously disclosed in our 2025 Form 10-K/A, we identified a material weakness whereby we did not design and maintain effective controls to review the terms of employee stock award plan documents to ensure that stock-based compensation expense is recorded completely and accurately. The material weakness resulted in the restatement of the consolidated financial statements as of and for the years ended December 31, 2025 and 2024, and the unaudited condensed consolidated financial statements as of and for the quarters ended June 29, 2024 and September 28, 2024, and all fiscal quarters within 2025, as well as the revision to the condensed financial statements as of and for the quarter ended March 30, 2024, related to stock-based compensation expense included as part of selling, general and administrative expense, accrued and other liabilities, other long-term liabilities, and additional paid-in capital. Additionally, this material weakness could result in misstatements to stock-based compensation expense and related disclosures that would result in a material misstatement to the annual or interim consolidated financial statements that would not be prevented or detected.

Management’s Remediation Activities for Previously Identified Material Weakness in Internal Control Over Financial Reporting

The Company’s management, with oversight from the Company’s Audit Committee, is in the process of designing and implementing a remediation plan in response to the identified material weakness described above. Specifically, the Company will design and implement a review over any changes to employee stock award plan documents and determine the appropriate accounting treatment of the revised terms and conditions.

This material weakness will not be considered remediated until the applicable remedial controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively. The Company believes the above measures will remediate the material weakness identified and strengthen its internal control over financial reporting.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting ~~during~~(as ~~the~~defined ~~three~~in ~~months~~Rules ~~ended~~13a-15(f) ~~September 27,~~and ~~2025~~15d-15(f) under the Exchange Act) that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting during the quarter ended April 4, 2026.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

See Note 1011 to our unaudited condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q for a description of our legal proceedings.

Item 1A. Risk Factors

See Part I, Item 1A of our Amendment No. 1 to our Annual Report on Form 10-K ~~(“Form 10-K”)~~ for the year ended December 31, ~~2024~~2025 (“2025 Form 10-K/A”) for a discussion of our risk factors. There have been no material changes during the three months ended ~~September~~April 274, ~~2025~~2026 to the risk factors disclosed in our 2025 Form 10-K/A for the year ended December 31, ~~2024~~2025.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Not applicable.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

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Item 6. Exhibits

Exhibit

No. Description

3.1 Restated Certificate of Incorporation filed with the Delaware Secretary of State on May 29, 1990. Incorporated by reference to Exhibit 3.1 to Form 10-K for the year ended December 31, 1990.

3.2 Certificate of Amendment of Certificate of Incorporation filed with the Delaware Secretary of State on May 27, 1998. Incorporated by reference to Exhibit 3.2 to Form 10-K for the year ended December 31, 1998.

3.3 Amended and Restated Bylaws of Ducommun Incorporated, dated as of November 5, 2024. Incorporated by reference to Exhibit 3.1 to Form 8-K filed on November 7, 2024.

*10.1 Form of Performance Stock Unit Agreement for 202 6 and after.

*10.2 Form of Revenue Performance Stock Unit Agreement for 202 6 and after.

31.1 Certification of Principal Executive Officer.

31.2 Certification of Principal Financial Officer.

32 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS Inline XBRL Instance Document with Embedded Linkbase Documents - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL

104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

___________________

* Indicates an executive compensation plan or arrangement.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

		DUCOMMUN INCORPORATED
		(Registrant)
Date: November 5, 2025	By:	/s/ Stephen G. Oswald
Date: May 12, 2026	By:	/s/ Stephen G. Oswald
		Stephen G. Oswald
		Chairman, President and Chief Executive Officer
		(Principal Executive Officer)
Date: November 5, 2025	By:	/s/ Suman B. Mookerji
Date: May 12, 2026	By:	/s/ Suman B. Mookerji
		Suman B. Mookerji
		Senior Vice President, Chief Financial Officer
		(Principal Financial and Principal Accounting Officer)

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