As L.A.'s biggest aerospace companies capture headlines and investor interest with their huge takeover battles, one of the region's smaller publicly held aerospace firms has been engineering a remarkable turnaround.
Carson-based Ducommun Inc. went from a company on the verge of failure in the late 1980s to one that earned $10.5 million on $118 million in revenues last year.
And it performed that feat by going against the trend. While other companies were abandoning aerospace, Ducommun embraced it.
"It might seem a little ironic that they concentrated on aerospace when they did, but they weathered the downturn pretty well and now they're positioned for the upturn," said Jeffrey Van Sinderen, an analyst with Dabney/Resnick/Imperial LLC in Los Angeles.
Ducommun survived by converting itself from a nearly defunct electronics distributor into an aerospace components specialist that makes parts for the Space Shuttle, Boeing commercial airliners and other military and civilian aircraft.
Ducommun, believed to be the oldest continuously operating business in California, was started in Los Angeles in 1849 by Charles Ducommun, a Swiss immigrant who supplied picks, shovels and other supplies to fortune-seekers on their way to California's Gold Rush country.
In later years, it evolved into a metals distributor. Ducommun changed course in the 1970s by moving into electronics distribution which proved disastrous. By 1988, the company was losing nearly $20 million a year and the stock was valued at under $1.
"For the three years from 1989 to 1991 we had a one-word mission statement: Survive," recalled Joseph Berenato, the company's president and chief executive. "People thought the company was gone."
Berenato, who now runs the company's day-to-day operations, credits Ducommun's success to Chairman Norman Barkeley, a former Lear-Siegler CEO who was hired in 1988.
"Basically, the board turned to Norm and asked him to save the company," Berenato said.
To do so, Barkeley reinvented the company. He sold off the unprofitable units and held onto the three remaining subsidiaries, which were small, profitable aerospace firms.
After some financial restructuring that included trading debt for equity, Ducommun began acquiring additional subsidiaries in 1994. Its holdings today include one Phoenix-based company, Mechtronics of Arizona Corp. , and five California-based subsidiaries: Aerochem Inc., AHF-Ducommun Inc., Jay-El Products Inc., Brice Manufacturin Co. and 3dbm Inc.
The company, with about 1,000 employees, had earnings per share last year of $1.33 up from 87 cents in 1995.
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