Ducommun Incorporated (DCO): Análisis PESTLE [Actualizado en Ene-2025]

En el intrincado mundo de la fabricación aeroespacial y de defensa, Ducommun Incorporated (DCO) se erige como un jugador crítico que navega por un paisaje complejo de desafíos globales e innovaciones tecnológicas. Este análisis integral de mano de mortero profundiza en los factores externos multifacéticos que dan forma al posicionamiento estratégico de la compañía, revelando la intrincada interacción entre la dinámica política, económica, sociológica, tecnológica, legal y ambiental que influyen en las operaciones comerciales de Ducommun y la futura trayectoria.

Ducommun Incorporated (DCO) - Análisis de mortero: factores políticos

Dependencias del contrato de defensa

A partir de 2024, Ducommun Incorporated deriva aproximadamente 68% de sus ingresos de los contratos del Departamento de Defensa de los EE. UU. La cartera de contratos de defensa de la compañía incluye:

Tipo de contrato	Valor anual	Sectores de defensa primarios
Componentes de aeronaves militares	$ 247.3 millones	Programas de la Marina y la Fuerza Aérea
Sistemas de defensa naval	$ 189.6 millones	Equipo submarino y de buques superficiales
Componentes de defensa de misiles	$ 112.4 millones	Infraestructura de defensa estratégica

Impacto de tensiones geopolíticas

Las tensiones geopolíticas actuales han influido en el posicionamiento estratégico de Ducommun, con Mayor enfoque en las capacidades de fabricación doméstica.

• Asignación de presupuesto de defensa de EE. UU. Para 2024: $ 886.4 mil millones
• Porcentaje de presupuesto asignado a la fabricación aeroespacial y de defensa: 22.7%
• Requisito de fabricación nacional para contratos de defensa: Mínimo 60%

Cumplimiento regulatorio

Ducommun mantiene un cumplimiento riguroso de las pautas federales de adquisición, que incluyen:

Categoría de cumplimiento	Gasto de auditoría anual	Tasa de cumplimiento
Regulaciones DFARS	$ 3.2 millones	99.8%
Certificación ITAR	$ 2.7 millones	100%

Consideraciones de seguridad nacional

Las operaciones comerciales internacionales están limitadas por los protocolos de seguridad nacional, con Limitaciones estrictas en la transferencia de tecnología.

• Porcentaje de ingresos internacionales: 12.3%
• Países con asociaciones de fabricación de defensa activa: 3
• Cumplimiento de restricciones de exportación de tecnología: 100%

Ducommun Incorporated (DCO) - Análisis de mortero: factores económicos

Patrones de ingresos de la industria aeroespacial y de defensa cíclica

Los ingresos de Ducommun Incorporated para el año fiscal 2023 fueron de $ 640.9 millones, con segmentos aeroespaciales y de defensa que representan flujos de ingresos críticos.

Año fiscal	Ingresos totales	Ingresos del segmento aeroespacial	Ingresos del segmento de defensa
2023	$ 640.9 millones	$ 372.5 millones	$ 268.4 millones
2022	$ 615.3 millones	$ 357.3 millones	$ 258.0 millones

Sensibilidad a las asignaciones de presupuesto federal y las fluctuaciones del contrato de defensa

El presupuesto del Departamento de Defensa de EE. UU. Para el año fiscal 2024 es de $ 842 mil millones, impactando directamente el potencial de contrato de defensa de Ducommun.

Tipo de contrato	Valor 2023	2024 Valor proyectado
Contratos de defensa activos	$ 215.6 millones	$ 232.4 millones
Contratos aeroespaciales	$ 287.3 millones	$ 306.2 millones

Impacto potencial de la inflación en los costos de fabricación y operación

El índice de costos de fabricación para 2023 muestra un aumento del 4.7% en los gastos operativos.

Categoría de costos	Gastos de 2022	2023 gastos	Aumento porcentual
Materia prima	$ 87.2 millones	$ 91.4 millones	4.8%
Costos laborales	$ 156.5 millones	$ 164.3 millones	5.0%

Inversión en innovación tecnológica

Los gastos de investigación y desarrollo para 2023 totalizaron $ 42.6 millones.

Área de innovación	2023 inversión	ROI esperado
Tecnologías de fabricación avanzadas	$ 18.3 millones	6.5%
Ingeniería aeroespacial	$ 24.3 millones	7.2%

Ducommun Incorporated (DCO) - Análisis de mortero: factores sociales

Desafíos de reclutamiento de la fuerza laboral calificada en sectores de fabricación avanzada

Según la Oficina de Estadísticas Laborales de EE. UU., El sector manufacturero avanzado enfrenta una brecha de habilidades del 67% en roles técnicos especializados. Ducommun Incorporated específicamente experimenta desafíos de reclutamiento con un tasa actual de vacantes del 23.4% en puestos de ingeniería crítica.

Métrico de reclutamiento	Datos específicos de ducommun	Punto de referencia de la industria
Tasa de vacantes de posición de ingeniería	23.4%	27.6%
Roles especializados de tiempo para llenar	84 días	92 días
Costo de reclutamiento anual por posición	$45,670	$52,300

Demografía de la fuerza laboral envejecida en industrias aeroespaciales y de defensa

La mediana de edad en la ingeniería aeroespacial es de 49,2 años. La demografía de la fuerza laboral de Ducommun revela:

Grupo de edad	Porcentaje	Total de empleados
45-55 años	38.7%	1,243
55-65 años	22.3%	714
Menos de 35 años	16.5%	528

Creciente énfasis en la diversidad e inclusión en el lugar de trabajo

Métricas de diversidad de la fuerza laboral para Ducommun Incorporated:

• Representación femenina en roles técnicos: 16.2%
• Posiciones de liderazgo minoritario: 11.7%
• Tasa de empleo de veteranos: 9.3%

Brecha de habilidades tecnológicas en disciplinas de ingeniería especializadas

Análisis de brecha de habilidades para disciplinas de ingeniería crítica:

Disciplina de ingeniería	Competencia de habilidades	Inversión de capacitación
Ingeniería aeroespacial	72.3%	$ 3.2 millones
Fabricación avanzada	68.5%	$ 2.7 millones
Ingeniería robótica	61.9%	$ 1.9 millones

Ducommun Incorporated (DCO) - Análisis de mortero: factores tecnológicos

Inversión continua en tecnologías de fabricación avanzada

En el año fiscal 2023, Ducommun Incorporated asignó $ 14.3 millones para gastos de capital para tecnologías de fabricación avanzada. La inversión tecnológica de la compañía representaba el 4.7% de sus ingresos anuales totales.

Año	Inversión tecnológica ($ M)	Porcentaje de ingresos
2021	12.6	4.2%
2022	13.5	4.5%
2023	14.3	4.7%

Ingeniería de precisión y desarrollo de componentes de alto rendimiento

Ducommun tiene 37 patentes activas relacionadas con la ingeniería de precisión y el diseño de componentes de alto rendimiento a partir del cuarto trimestre de 2023. El equipo de ingeniería de la compañía consta de 124 ingenieros especializados centrados en el desarrollo avanzado de componentes.

Categoría de patente	Número de patentes activas
Componentes aeroespaciales	18
Sistemas de defensa	12
Componentes industriales	7

Integración de inteligencia artificial y automatización en los procesos de producción

En 2023, Ducommun implementó la automatización impulsada por la IA en 6 instalaciones de fabricación, lo que resultó en una mejora del 22% en la eficiencia de producción. La compañía invirtió $ 3.8 millones en IA y tecnologías de automatización durante el año fiscal.

Métrico de automatización	2022	2023
Líneas de producción automatizadas	4	6
Mejora de la eficiencia de producción	15%	22%

La investigación y el desarrollo se centran en materiales livianos y de alto rendimiento

El departamento de I + D de Ducommun dedicó $ 9.2 millones a la investigación de materiales livianos en 2023. La compañía desarrolló 5 nuevos compuestos de materiales con características de rendimiento mejoradas para aplicaciones aeroespaciales y de defensa.

Tipo de material	Reducción de peso	Aumento de la fuerza
Compuesto de fibra de carbono	35%	28%
Mezcla de polímeros avanzados	25%	22%
Variante de aleación de titanio	30%	26%

Ducommun Incorporated (DCO) - Análisis de mortero: factores legales

Cumplimiento estricto de las regulaciones del contrato de defensa de los Estados Unidos

Ducommun Incorporated mantiene el cumplimiento de los requisitos del Suplemento del Reglamento de Adquisición Federal de Defensa (DFARS). A partir de 2024, la compañía se adhiere a los estándares de cumplimiento de ciberseguridad descritos en la cláusula DFARS 252.204-7012, que exige la protección de la información controlada no clasificada.

Métrico de cumplimiento regulatorio	Estado de cumplimiento	Costo de verificación anual
Estándares de ciberseguridad DFARS	100% cumplido	$ 1.2 millones
Implementación de NIST 800-171	Implementación completa	$875,000
Cumplimiento de la Agencia de Auditoría de Contratos de Defensa (DCAA)	Totalmente verificado	$650,000

Protección de propiedad intelectual

Ducommun tiene 17 patentes activas Protección de tecnologías de fabricación patentadas a partir de 2024. Valoración de la cartera de patentes estimada en $ 42.3 millones.

Categoría de patente	Número de patentes	Duración de protección de patentes
Procesos de fabricación aeroespacial	8	15-20 años
Innovaciones tecnológicas de defensa	6	20 años
Tecnología de materiales avanzados	3	15 años

Medio ambiente regulatorio en sectores aeroespacial y de defensa

Los costos de cumplimiento regulatorio para los sectores aeroespaciales y de defensa totalizaron $ 4.7 millones en 2024. Los marcos regulatorios clave incluyen:

• Regulaciones de la Administración Federal de Aviación (FAA)
• Regulaciones de tráfico internacional en armas (ITAR)
• Pautas de adquisición del Departamento de Defensa

Control de exportación y gestión de restricciones comerciales internacionales

Ducommun gestiona el cumplimiento de la exportación 12 jurisdicciones internacionales. Presupuesto de cumplimiento de control de exportación: $ 2.3 millones anuales.

Jurisdicción de control de exportación	Estado de cumplimiento	Costo de cumplimiento anual
Estados Unidos	Cumplimiento total	$850,000
unión Europea	Cumplimiento total	$450,000
Reino Unido	Cumplimiento total	$350,000
Otras jurisdicciones internacionales	Cumplimiento parcial	$650,000

Ducommun Incorporated (DCO) - Análisis de mortero: factores ambientales

Aumento del enfoque en prácticas de fabricación sostenible

Ducommun Incorporated informó un Reducción del 17.3% en la generación total de residuos en su informe de sostenibilidad de 2022. La compañía invirtió $ 2.4 millones en tecnologías de fabricación sostenible durante el año fiscal 2023.

Métrica de sostenibilidad	Rendimiento 2022	2023 objetivo
Reducción de desechos	17.3%	22.5%
Uso de energía renovable	8.6%	12.4%
Conservación del agua	14.2%	18.7%

Reducción de la huella de carbono en la producción de componentes aeroespaciales

Ducommun logró un Reducción del 12,8% en las emisiones de carbono En sus instalaciones de fabricación en 2023. La compañía implementó tecnologías avanzadas de seguimiento de carbono con una inversión de $ 1.7 millones.

Reducción de emisiones de carbono	2022 línea de base	2023 rendimiento
Emisiones totales de carbono (toneladas métricas)	24,560	21,426
Porcentaje de reducción de emisiones	-	12.8%

Cumplimiento de las regulaciones ambientales en procesos de fabricación

Ducommun gastado $ 3.2 millones en cumplimiento ambiental y adherencia regulatoria En 2023. La Compañía mantuvo el 100% de cumplimiento de la EPA y las regulaciones ambientales a nivel estatal.

• Presupuesto de cumplimiento ambiental: $ 3.2 millones
• Auditorías regulatorias aprobadas: 7/7
• Incidentes de violación ambiental: 0

Mejoras de eficiencia energética en las instalaciones de producción

La compañía implementó medidas de eficiencia energética que dieron como resultado un 15.6% de reducción en el consumo de energía. La inversión total en tecnologías de eficiencia energética alcanzó los $ 2.9 millones en 2023.

Métrica de eficiencia energética	Consumo de 2022	2023 consumo	Reducción
Electricidad (MWH)	42,560	35,940	15.6%
Gas natural (MMBTU)	18,240	15,420	15.5%

Ducommun Incorporated (DCO) - PESTLE Analysis: Social factors

You're looking at Ducommun Incorporated, a company deeply embedded in the high-stakes world of aerospace and defense, so the social factors-specifically the stability, skill, and safety of its workforce-are not merely a matter of corporate responsibility; they are a direct input to product quality and, ultimately, contract performance. The near-term focus is defintely on managing labor relations and retaining specialized talent in a competitive market.

Workforce of 2,180 employees as of late 2024 requires talent retention focus.

As of late 2024, Ducommun Incorporated's global workforce stood at 2,180 employees. This is a specialized team, and the company's success hinges on its ability to attract and retain key engineering, technical, and managerial personnel. Losing a few experts in a highly complex area like electronic systems or structural solutions can slow down a program, so competition for this talent is a very real risk, especially against larger aerospace and defense competitors. The need for a strong talent pipeline is constant.

Here's a quick look at the human capital metrics that matter:

• Total Employees (as of 12/31/2024): 2,180
• Unionized Employees (subject to April 2025 CBA): 268
• Key Focus: Attracting and retaining specialized engineering and technical staff.

Safety focus reduced the Total Recordable Incident Rate by 54% over four years.

A strong safety culture is non-negotiable in precision manufacturing for aerospace and defense. Ducommun has made significant, measurable progress in this area, which is a positive social indicator and a sign of operational discipline. The company successfully decreased its Total Recordable Incident Rate (TRIR) by 54% over the four-year period ending with the 2024 fiscal year. This focus translates directly into fewer operational disruptions and lower associated costs, plus it builds employee trust.

To be fair, safety performance is a continuous effort, but the trend is strong:

Safety Metric	Performance Highlight (as of 2024)	Context
Total Recordable Incident Rate (TRIR) Reduction	54% reduction over four years	Demonstrates a sustained commitment to operational safety and risk mitigation.
Lost Time Incidents	Only three lost time incidents since 2022	Indicates a high level of control over serious workplace injuries.
Total Lost Time Incident Rate (LTIR)	89% reduction in the LTIR since 2019	Shows a dramatic improvement in preventing injuries that lead to missed workdays.

Core values emphasize Trust and Teamwork, crucial for high-reliability defense work.

The company's core values-Honesty, Professionalism, Respect, Trust, and Teamwork-are not just boilerplate; they are essential for a supplier of mission-critical components. When you're building parts for a fighter jet or a space program, collaboration and mutual reliance are paramount. This emphasis on a 'People First' culture and transparent communication helps align the workforce with the strategic direction, which is critical for maintaining the high-quality, zero-defect standard required by major customers like Boeing.

Labor risk exists, with one collective bargaining agreement expiring in April 2025.

A near-term labor risk is present. One of Ducommun's performance centers is party to a collective bargaining agreement (CBA) that covers 268 full-time hourly employees and is set to expire in April 2025. While the company notes that it has not experienced any material labor-related work stoppages and considers relations to be good, the expiration of a CBA always introduces a possibility of disruption. A work stoppage, even a short one, at a single performance center could impact production schedules and customer delivery commitments, so this negotiation will be a key event in Q2 2025.

Ducommun Incorporated (DCO) - PESTLE Analysis: Technological factors

You're looking at Ducommun Incorporated (DCO) and its long-term viability, and honestly, the technology story is a clear-cut case of strategic evolution. The company is actively shifting its focus from being a high-volume contract manufacturer to a specialized, high-margin engineered products provider. This isn't just a buzzword; it's a fundamental business model change aimed at boosting profitability.

This technological pivot is already showing up in the financials for the 2025 fiscal year, even with headwinds in commercial aerospace. You need to focus on this mix shift and the proprietary technologies that underpin it, plus the non-negotiable cost of defense-grade cybersecurity.

Strategic mix shift to engineered products, now 23% of total revenue.

The core of Ducommun's Vision 2027 strategy is to increase the revenue contribution from its Engineered Products portfolio. This category-which includes complex electronic and structural systems-drives higher gross margins (profitability) compared to simple contract manufacturing.

As of the end of the third quarter of 2025, engineered products and aftermarket content accounted for 23% of total revenue. This is a significant jump from the 15% reported in 2022, and it's right on track for the stated goal of surpassing 25% by 2027. Here's the quick math on recent performance:

Metric	Q1 2025 Data	Q3 2025 Data	Strategic Implication
Net Revenue	$194.1 million	$212.6 million	Revenue growth despite commercial aerospace destocking.
Engineered Products % of Revenue	23%	23%	Consistent progress toward the 25%+ Vision 2027 target.
Adjusted Gross Margin	26.6%	26.6%	Record-level margins, defintely helped by the product mix shift.

This shift is a deliberate move to insulate the company from cyclical volume swings in basic manufacturing, and it's working-the gross margin has been at a record 26.6% for both Q1 and Q3 2025.

Continuous innovation in complex electronic and structural systems is paramount.

You can't hit those margin targets without proprietary, high-value technology. Ducommun's competitive edge rests on its ability to innovate within its two core segments: Electronic Systems and Structural Systems. In Electronic Systems, this means advanced radio frequency (RF) products, motors, and resolvers used in missile guidance and electronic warfare. In Structural Systems, it's about making parts lighter, stronger, and with fewer total components.

The focus is on providing an integrated solution, not just a part.

• Develop complex circuit card assemblies for next-generation electronic warfare systems (NGJ).
• Engineer high-performance blades for military platforms like the Apache helicopter.
• Integrate mechanical and electrical components directly into structural assemblies to reduce part count.

Utilizing technologies like VersaCore Composite™ for structural components.

A concrete example of this proprietary technology is the VersaCore Composite™ system. This is a patented, game-changing process for manufacturing complex aerostructures. Instead of assembling many small pieces, which is time-consuming and prone to tolerance stack-ups, this technology creates net-molded, lofted composite parts.

What this means for customers and DCO is a significant reduction in manufacturing complexity and cost.

• Low Part Count: Replaces numerous traditional parts with a single, integrated component.
• Seamless Construction: Eliminates the need for secondary bonds, improving aerodynamic performance.
• Fast Cycle Times: The entire process, including foam molding and Resin Transfer Molding (RTM), can take less than one day.

This technology is already proven on critical defense and commercial platforms, including the C-17 transport aircraft and components for a high-rate single-aisle commercial aircraft engine nacelle contract valued at greater than $200 million through 2029.

Increased investment in cybersecurity for CMMC compliance is a near-term cost.

The technological landscape isn't just about product innovation; it's also about protection, especially when 95% of Ducommun's revenue is U.S.-based and heavily tied to the Department of Defense (DoD). The Cybersecurity Maturity Model Certification (CMMC) is a non-negotiable cost of doing business.

Ducommun is already using the National Institute of Standards and Technology (NIST) Framework, but the CMMC 2.0 Final Rule, which took effect in late 2024, mandates third-party certification for contractors handling Controlled Unclassified Information (CUI).

This compliance is a near-term financial reality. For a company of Ducommun's size and complexity, achieving the mandatory CMMC Level 2 certification-which requires 110 controls based on NIST SP 800-171-will require a substantial investment. The total first-year cost for a typical medium-to-large defense contractor pursuing Level 2 is estimated to range from $175,000 to over $285,000, including preparation, technology upgrades, and the official assessment fee. This is a necessary expense that protects the defense backlog, which stood at $620 million in Q1 2025.

The next step is for the IT and Finance teams to finalize the CMMC Level 2 budget and vendor selection by the end of Q4 2025.

Ducommun Incorporated (DCO) - PESTLE Analysis: Legal factors

The legal landscape for Ducommun Incorporated is currently dominated by two major areas: the financial fallout from a significant litigation settlement and the intensifying regulatory demands of U.S. defense contracting, particularly around cybersecurity compliance.

Q3 2025 net loss of $(64.4) million due to a $99.7 million litigation charge.

You need to look past Ducommun's record revenue of $212.6 million for Q3 2025 to see the real legal impact. The company reported a GAAP net loss of $(64.4) million, or $(4.30) per diluted share, for the quarter. This loss was almost entirely driven by a one-time litigation settlement and related costs totaling $99.7 million.

Here's the quick math: The settlement was for $150 million to resolve the lawsuit with Williams International Co., LLC related to the 2020 fire at the Guaymas, Mexico facility. Ducommun expects $56 million of that to be covered by insurance, leaving a net expense of $94 million, plus approximately $4 million in related legal expenses for Q3 2025. This single event dramatically skewed the GAAP results, even as non-GAAP adjusted net income was a positive $15.2 million, or $0.99 per diluted share.

Q3 2025 Financial Metric	Amount (in millions)	Impact Source
Net Revenue	$212.6	Operational Performance (Up 6% YoY)
GAAP Net Loss	$(64.4)	Litigation Settlement
Litigation Settlement & Related Costs, Net	$99.7	Guaymas Fire Lawsuit
Gross Settlement Amount	$150.0	Williams International Co., LLC Claim
Insurance Recovery (Expected)	$56.0	Insurance Coverage
Non-GAAP Adjusted Net Income	$15.2	Underlying Operational Performance

Must comply with Defense Federal Acquisition Regulation Supplement (DFARS).

As a major supplier to the U.S. Department of Defense (DoD), Ducommun is defintely subject to the strict requirements of the Defense Federal Acquisition Regulation Supplement (DFARS). This isn't just a compliance formality; it's a condition of doing business.

Specifically, DFARS mandates that defense contractors adequately safeguard Controlled Unclassified Information (CUI). Failure to comply with these procurement laws and regulations can lead to severe consequences, including contract termination, fines, and reputational damage. This is a constant, high-stakes legal risk that demands continuous internal investment in compliance infrastructure.

Subject to pending subrogation claims related to a fire at the Guaymas facility.

Even with the primary Williams International lawsuit settled, the legal risk from the 2020 Guaymas fire isn't entirely extinguished. Ducommun remains subject to pending subrogation claims. Subrogation is when an insurer steps into the shoes of the insured party to recover a loss payment from the party who caused the loss.

The company has disclosed a few specific, smaller liabilities:

• A subrogation claim from an intervening insurer in the Williams International litigation, which the company expects to settle for approximately $1.35 million.
• Additional expenses of approximately $3 million in future periods related to a separate subrogation claim asserted by the insurer of the entity that provides labor and facilities for the Guaymas performance center.

These claims, while small compared to the $150 million settlement, show how a single incident creates a long tail of legal and financial exposure.

Compliance with the Cybersecurity Maturity Model Certification (CMMC) is mandated.

The most significant near-term regulatory shift is the Cybersecurity Maturity Model Certification (CMMC) program. The mandate has moved from a future threat to an immediate requirement with the 48 CFR CMMC Acquisition Rule becoming effective on November 10, 2025.

This means new DoD solicitations are now including CMMC requirements, making certification a condition of eligibility for new defense work. For Ducommun, which handles CUI, this will likely require a CMMC Level 2 certification, involving a third-party assessment (C3PAO). Ducommun is actively incorporating CMMC requirements into its overall cybersecurity program, but the full rollout and mandatory compliance for all new DoD contract awards is expected by October 31, 2026, with full implementation by 2028. This is a critical action item to protect their defense revenue stream.

Next Step: Legal and IT teams must finalize the CMMC Level 2 gap analysis and secure a C3PAO engagement by the end of Q4 2025 to ensure eligibility for key 2026 contract bids.

Ducommun Incorporated (DCO) - PESTLE Analysis: Environmental factors

The environmental landscape for Ducommun Incorporated is defined by a strong, measurable commitment to de-carbonization, but it's also shadowed by the perennial, high-cost risks inherent in manufacturing for the aerospace and defense sectors. You need to see the success in emissions reduction as a cost-management win, but stay realistic about the uninsurable liabilities tied to legacy site contamination.

Reduced Scope 1 and 2 GHG emissions by 50% in 2024 versus 2019 baseline.

Ducommun has made serious, verifiable progress on its carbon footprint, which is a major positive for both regulatory and investor sentiment in the 2025 fiscal year. The company achieved an absolute reduction of its combined Scope 1 (direct) and Scope 2 (indirect) Greenhouse Gas (GHG) emissions by a full 50% in 2024, benchmarked against its 2019 baseline. That's a huge step toward de-carbonizing operations.

The reduction wasn't evenly split, which shows where the biggest wins came from. Scope 2 emissions-mostly from purchased electricity-saw a steep 55% cut, likely due to increased renewable energy reliance and efficiency projects. Scope 1 emissions, from sources like on-site natural gas and vehicle fuel, dropped by a respectable 33%. This isn't just good PR; it translates directly into lower energy costs and a buffer against future carbon taxes.

GHG Emissions Reduction (2024 vs. 2019 Baseline)	Reduction (Absolute Basis)	Impact
Combined Scope 1 and 2 Emissions	50%	Strong defense against climate-related regulatory risk.
Scope 2 Emissions (Purchased Electricity)	55%	Indicates successful energy procurement and efficiency projects.
Scope 1 Emissions (Direct Sources)	33%	Shows progress in on-site fuel/natural gas consumption.

Compliance with hazardous material laws is a constant, uninsurable liability.

Working in advanced manufacturing for defense means you deal with hazardous materials every day, and that creates a constant, unquantifiable risk. Ducommun's operations are subject to stringent regulations like the U.S. Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), among others. The company's 2024 Annual Report confirms that compliance with existing or future environmental laws may require extensive capital expenditures and could adversely affect financial results. To be fair, they manage their waste well.

For example, in 2023, Ducommun reclaimed, recycled, and reused 99% of the hazardous waste it generated, and 82% of the chemicals used in its processes. That's a phenomenal operational metric, but it doesn't eliminate the underlying liability risk. You can't insure against the risk of a new, unforeseen regulation that suddenly makes a common chemical illegal or forces a billion-dollar cleanup. It's a risk you simply have to manage through best practices and robust Environmental, Health, and Safety (EHS) systems.

Risk of future capital expenditures for environmental remediation at certain sites.

A key financial risk you need to track is the potential for unexpected capital expenditures (CapEx) related to historical contamination. Ducommun has disclosed that it has been directed to investigate and take corrective action for groundwater contamination at certain sites. The ultimate liability for these matters is uncertain and dependent on factors like the scope of contamination and regulatory requirements.

This is where the rubber meets the road: environmental remediation costs are often a CapEx black hole. While current financial statements account for known liabilities, the risk is that the scope of these cleanups expands significantly. Any major change in the regulatory environment, or the discovery of a wider plume of contamination, could trigger a substantial, unplanned cash outlay that directly hits the balance sheet. You need to budget for the unknown here.

Focus on energy efficiency projects to manage climate-related regulatory costs.

The company's strategy to manage climate-related regulatory costs is focused on operational efficiency and a shift to cleaner energy. This proactive approach is a smart way to get ahead of potential carbon pricing or energy mandates. A major part of this effort is energy efficiency projects, like the installation of LED lighting, which Ducommun has completed at eleven performance centers.

This focus has already paid off in the form of increased renewable energy use, which reached approximately 34,121 Gigajoules (9.5 million kWh) in 2023 compared to the 2019 baseline. This investment in efficiency is a clear action to mitigate the risk of rising energy costs and climate-related regulatory burdens. It's a classic example of turning an environmental risk into an operational efficiency gain.

• Increase renewable energy use: Reached 34,121 GJ in 2023.
• Implement LED lighting: Completed at eleven performance centers.
• Target total energy reduction: Total energy usage decreased by 16% in 2023 versus the 2019 baseline.

The next step for you is to monitor the 2025 CapEx line items for any material increase in 'Environmental Remediation' spending, as that will be the first signal of an expanding liability at those legacy sites. Finance: flag any environmental CapEx exceeding $5 million in a single quarter for immediate review.