General Dynamics (NYSE:GD) | Materials & Supply

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Key Raw Materials and Components + Supply

General Dynamics depends on suppliers and subcontractors for raw materials and components. These supply networks can experience price fluctuations and capacity constraints, which can put pressure on pricing. Effective management and oversight of suppliers and subcontractors is an important element of the company's performance. General Dynamics attempts to mitigate these risks through long-term agreements with its suppliers or by negotiating flexible pricing terms in its customer contracts. The company has not experienced, and do not foresee, significant difficulties in obtaining the materials, components or supplies necessary for its business operations. General Dynamics' business is not seasonal in nature. The timing of contract awards, the availability of funding from the customer, the incurrence of contract costs and unit deliveries are the primary drivers of the company's revenue recognition. In the United States, these factors are influenced by the federal government's October-to-September fiscal year. This process has historically resulted in higher revenues in the latter half of the year. Internationally, many of General Dynamics' government customers schedule deliveries toward the end of the calendar year, resulting in increasing revenues and earnings over the course of the year.

To manufacture its products, among other materials, General Dynamics uses aluminum, titanium, steel, various specialty metals and composite fibers. For its Gulfstream business, General Dynamics purchases avionics, aircraft engines, composite and metallic aerostructures, aircraft furnishings and seats, landing gear, brakes, windows, electric wire harnesses, fuel tanks, hydraulic pipes, and other components and parts.

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