DCO Ducommun Inc

Risks

• Our indebtedness could limit our financing options, adversely affect our financial condition, and prevent us from fulfilling our debt obligations.
• We require a considerable amount of cash to run our business.
• We require a considerable amount of cash to fund our anticipated voluntary principal prepayments on our Credit Facilities.
• The covenants in the credit agreement to our Credit Facilities impose restrictions that may limit our operating and financial flexibility.
• We may be adversely affected by changes in LIBOR reporting practices or the method in which LIBOR is determined.
• 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 stock price.
• Our amount of debt may require us to raise additional capital to fund acquisitions.
• Our end-use markets are cyclical.
• We depend upon a selected base of industries and customers, which subjects us to unique risks which may adversely affect us.
• A significant portion of our business depends upon U.S. Government defense spending.
• We are subject to extensive regulation and audit by the Defense Contract Audit Agency.
• We are subject to a number of procurement laws and regulations. Our business and our reputation could be adversely affected if we fail to comply with these laws.
• Contracts with some of our customers, including Federal government contracts, contain provisions which give our customers a variety of rights that are unfavorable to us and the OEMs to whom we provide products and services, including the ability to terminate a contract at any time for convenience.
• Further consolidation in the aerospace industry could adversely affect our business and financial results.
• Our growth strategy includes evaluating selected acquisitions, which entails certain risks to our business and financial performance.
• 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.
• We rely on our suppliers to meet the quality and delivery expectations of our customers.
• We use estimates when bidding on fixed-price contracts. Changes in our estimates could adversely affect our financial results.
• As we move up the value chain to become a more value added supplier, enhanced design, product development, manufacturing, supply chain project management and other skills will be required.
• Risks associated with operating and conducting our business outside the United States could adversely impact us.
• Goodwill and/or other assets could be impaired in the future, which could result in substantial charges.
• Our operations are subject to numerous extensive, complex, costly and evolving laws, regulations and restrictions, and failure to comply with these laws, regulations and restrictions could subject us to penalties and sanctions that could harm our business.
• 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 industry and regulatory standards.
• Environmental liabilities could adversely affect our financial results.
• Cyber security attacks, internal system or service failures may adversely impact our business and operations.
• We may not have the ability to renew facilities leases on terms favorable to us and relocation of operations presents risks due to business interruption.
• The occurrence of litigation in which we could be named as a defendant is unpredictable.
• Product liability claims in excess of insurance could adversely affect our financial results and financial condition.
• Damage or destruction of our facilities caused by storms, earthquake, fires or other causes could adversely affect our financial results and financial condition.
• We are dependent upon our ability to attract and retain key personnel.
• Labor disruptions by our employees could adversely affect our business.
• Unanticipated changes in our tax provision or exposure to additional income tax liabilities could affect our profitability.