What Ducommun, Inc. told the SEC could break it.

Many of Ducommun's manufacturing properties are in Southern California, an area subject to earthquake activity, and its California performance centers generated $189.8 million of net revenue in 2025. It does not carry earthquake insurance due to prohibitive cost. A significant earthquake (or storm/fire) could damage facilities, halt production, cause it to miss customer delivery schedules, and lead to lost customers or terminated aerospace/defense contracts — with much of the loss uninsured. A concentrated, largely uninsured natural-catastrophe (physical) risk.

“many of our properties are located in Southern California, an area subject to earthquake activity. Our California performance centers generated $189.8 million in net revenues during 2025.”

Ducommun's aerostructures and electronic systems are metals-intensive, depending on aluminum, titanium and other raw materials and components. Due to lingering supply-chain issues it has experienced increased lead times and limited availability of these items (titanium in particular has been supply-constrained for aerospace since 2022). Price spikes or availability shortfalls in aluminum/titanium can raise costs or delay deliveries on fixed-price aerospace contracts. A specific aluminum/titanium commodity dependence.

“we have experienced increases in lead times and limited availability of various items including aluminum, titanium and certain other raw materials and/or components.”

Ducommun faces a volatile, partly-realized tariff environment. After the February 20, 2026 U.S. Supreme Court decision striking down IEEPA-based tariffs, the U.S. government imposed a new 10% global tariff (potentially rising to 15%) effective February 24, 2026 for 150 days unless extended by Congress. With a production facility in Guaymas, Mexico and imports of raw materials and equipment from suppliers outside the U.S. (plus exports subject to export-control authorizations), sustained tariffs could negatively affect profitability and cash flows to the extent Ducommun cannot claim duty exemptions or pass incremental tariffs to customers. A realized and uncertain trade-policy exposure.

“However, the U.S. government subsequently imposed a global tariff of 10% (which could potentially increase to 15%) that went into effect on February 24, 2026, and which would be effective for 150 days unless they are extended by the U.S Congress.”

Ducommun relies on numerous third-party suppliers for raw materials and a large proportion of the components in its production. Certain of these are available only from single or a limited number of sources, and customer specifications sometimes require it to obtain materials/components from a single source or specified supplier. Many suppliers are small companies with limited financial resources and manufacturing capabilities, and Ducommun cannot currently manufacture these components itself — so a supplier failure, quality issue, or disruption (compounded by import tariffs) could interrupt production. Suppliers unnamed, so a sole-source/supplier-concentration risk.

“Certain of these raw materials and components are available only from single sources or a limited number of suppliers, or similarly, customers' specifications may require us to obtain raw materials and/or components from a single source or certain suppliers.”