Darling Ingredients Inc. Reports Second Quarter 2024 Results
Darling Ingredients Inc. (NYSE: DAR) reported Q2 2024 net income of $78.9 million, or $0.49 per diluted share, down from $252.4 million in Q2 2023. Net sales decreased to $1.5 billion from $1.8 billion year-over-year. The decline was primarily due to lower fat prices and reduced earnings from Diamond Green Diesel (DGD). Combined adjusted EBITDA was $273.6 million, compared to $508.3 million in Q2 2023.
Key highlights:
- DGD sold 311.5 million gallons of renewable diesel at $0.49/gallon EBITDA
- Received $77.1 million cash dividend from DGD
- Repurchased $29.2 million of common stock
- Reaffirmed FY2024 guidance of $1.3-$1.4 billion combined adjusted EBITDA
The company remains focused on debt reduction and margin improvement through cost-cutting measures.
Darling Ingredients Inc. (NYSE: DAR) ha riportato un reddito netto Q2 2024 di 78,9 milioni di dollari, ovvero 0,49 dollari per azione diluita, in calo rispetto ai 252,4 milioni di dollari del Q2 2023. Le vendite nette sono diminuite a 1,5 miliardi di dollari rispetto ai 1,8 miliardi di dollari dell'anno precedente. Questo declino è stato principalmente causato dalla diminuzione dei prezzi dei grassi e dalla riduzione dei guadagni da Diamond Green Diesel (DGD). L'EBITDA rettificato combinato è stato di 273,6 milioni di dollari, rispetto ai 508,3 milioni di dollari nel Q2 2023.
Punti salienti:
- DGD ha venduto 311,5 milioni di galloni di diesel rinnovabile con un EBITDA di 0,49 dollari/gallone
- Ricevuto un dividendo in contante di 77,1 milioni di dollari da DGD
- Riacquistati 29,2 milioni di dollari di azioni ordinarie
- Riconfermato l'orientamento per l'intero anno 2024 di un EBITDA rettificato combinato di 1,3-1,4 miliardi di dollari
L'azienda rimane focalizzata sulla riduzione del debito e sul miglioramento dei margini attraverso misure di contenimento dei costi.
Darling Ingredients Inc. (NYSE: DAR) reportó un ingreso neto de 78.9 millones de dólares en el Q2 2024, o $0.49 por acción diluida, una disminución con respecto a los 252.4 millones de dólares en el Q2 2023. Las ventas netas disminuyeron a 1.5 mil millones de dólares desde 1.8 mil millones de dólares en comparación interanual. La disminución se debió principalmente a los precios más bajos de las grasas y a una reducción en las ganancias de Diamond Green Diesel (DGD). El EBITDA ajustado combinado fue de 273.6 millones de dólares, en comparación con 508.3 millones de dólares en el Q2 2023.
Aspectos destacados:
- DGD vendió 311.5 millones de galones de diésel renovable con un EBITDA de $0.49/galón
- Recibió un dividendo en efectivo de 77.1 millones de dólares de DGD
- Recompró 29.2 millones de dólares de acciones ordinarias
- Reiteró la guía de FY2024 de 1.3-1.4 mil millones de dólares en EBITDA ajustado combinado
La empresa sigue centrada en la reducción de deudas y la mejora de márgenes mediante medidas de reducción de costos.
Darling Ingredients Inc. (NYSE: DAR)는 2024년 2분기 순이익이 7890만 달러, 즉 희석 주당 0.49달러라고 보고했습니다. 이는 2023년 2분기의 2억 5240만 달러에서 감소한 수치입니다. 순매출은 15억 달러로 감소했습니다, 지난해 18억 달러에서 감소했습니다. 이 하락은 주로 지방 가격 하락과 Diamond Green Diesel(DGD)으로부터의 수익 감소 때문입니다. 조정된 EBITDA의 총 합계는 2억 7360만 달러로, 2023년 2분기 5억 830만 달러와 비교됩니다.
주요 하이라이트:
- DGD는 갤런당 0.49달러의 EBITDA로 3억 1150만 갤런의 재생 가능한 디젤을 판매했습니다
- DGD로부터 7710만 달러의 현금 배당금을 받았습니다
- 2920만 달러의 보통주를 재구매했습니다
- 2024 회계연도의 조정된 EBITDA 가이드를 13억에서 14억 달러로 재확인했습니다
회사는 비용 절감을 통해 부채 감소와 마진 향상에 집중하고 있습니다.
Darling Ingredients Inc. (NYSE: DAR) a annoncé un revenu net de 78,9 millions de dollars pour le T2 2024, soit 0,49 dollar par action diluée, en baisse par rapport à 252,4 millions de dollars au T2 2023. Les ventes nettes ont diminué à 1,5 milliard de dollars contre 1,8 milliard de dollars d'une année sur l'autre. Cette baisse est principalement due à la baisse des prix des graisses et à la diminution des bénéfices de Diamond Green Diesel (DGD). L'EBITDA ajusté combiné s'élevait à 273,6 millions de dollars, contre 508,3 millions de dollars au T2 2023.
Points clés :
- DGD a vendu 311,5 millions de gallons de diesel renouvelable avec un EBITDA de 0,49 dollar/gallon
- A reçu un dividende en espèces de 77,1 millions de dollars de DGD
- A racheté pour 29,2 millions de dollars d'actions ordinaires
- A réaffirmé l'orientation pour l'exercice 2024 d'un EBITDA ajusté combiné de 1,3 à 1,4 milliard de dollars
L'entreprise reste concentrée sur la réduction de la dette et l'amélioration des marges grâce à des mesures de réduction des coûts.
Darling Ingredients Inc. (NYSE: DAR) berichtete über ein Nettogewinn von 78,9 Millionen US-Dollar im Q2 2024, oder 0,49 US-Dollar pro verwässerter Aktie, was einem Rückgang von 252,4 Millionen US-Dollar im Q2 2023 entspricht. Die Nettoumsätze sanken auf 1,5 Milliarden US-Dollar von 1,8 Milliarden US-Dollar im Vorjahresvergleich. Der Rückgang war hauptsächlich auf fallende Fettpreise und geringere Einnahmen von Diamond Green Diesel (DGD) zurückzuführen. Die kombinierte bereinigte EBITDA betrug 273,6 Millionen US-Dollar, im Vergleich zu 508,3 Millionen US-Dollar im Q2 2023.
Wichtige Highlights:
- DGD verkaufte 311,5 Millionen Gallonen erneuerbaren Diesel zu einem EBITDA von 0,49 US-Dollar pro Gallone
- Erhielt eine Barausschüttung von 77,1 Millionen US-Dollar von DGD
- Wieder erwarb Aktien im Wert von 29,2 Millionen US-Dollar
- Bestätigte die Prognose für das Geschäftsjahr 2024 von 1,3 bis 1,4 Milliarden US-Dollar bereinigte EBITDA
Das Unternehmen bleibt weiterhin auf die Schuldenreduzierung und die Margenverbesserung durch Kostensenkungsmaßnahmen fokussiert.
- Reaffirmed FY2024 guidance of $1.3-$1.4 billion combined adjusted EBITDA
- Received $77.1 million cash dividend from Diamond Green Diesel
- Repurchased $29.2 million of common stock
- Board refreshed share repurchase program to $500 million
- DGD sold 311.5 million gallons of renewable diesel
- Net income decreased to $78.9 million from $252.4 million year-over-year
- Net sales declined to $1.5 billion from $1.8 billion year-over-year
- Combined adjusted EBITDA fell to $273.6 million from $508.3 million in Q2 2023
- Sharp year-over-year decline in fat prices
- Lower earnings within Diamond Green Diesel
Insights
Darling Ingredients' Q2 2024 results reveal significant challenges, with net income dropping to
Net sales fell to
Despite these challenges, there are some positive indicators:
- DGD sold 311.5 million gallons of renewable diesel at
$0.49 per gallon EBITDA - Darling received a
$77.1 million cash dividend from DGD - The company repurchased
$29.2 million of common stock - The Board refreshed the share repurchase program to
$500 million
However, the company's debt position remains concerning, with total debt outstanding at
Darling reaffirmed its fiscal year 2024 guidance of
The sharp decline in Darling Ingredients' performance reflects broader market trends affecting the renewable fuels and specialty ingredients sectors. The deflationary commodity market has significantly impacted the company's profitability, particularly in its core fat processing business.
Key market factors to consider:
- Regulatory uncertainty in the renewable fuels market is creating headwinds for Diamond Green Diesel
- Fat prices have been volatile, but show signs of improvement, which could benefit future quarters
- The specialty ingredients business is adapting to market conditions, with sequential improvements noted
- Sustainable aviation fuel production is on the horizon, potentially opening new revenue streams
The company's focus on debt reduction and margin improvement through cost-cutting measures is a prudent strategy in the current market environment. However, the effectiveness of these measures will be important to watch in the coming quarters.
Darling's stock repurchase program and the Board's decision to refresh it to
The reaffirmation of the full-year guidance suggests management believes the worst may be over, but investors should remain cautious given the significant year-over-year declines and the uncertain regulatory environment in the renewable fuels sector.
Second Quarter 2024
- Net income of
$78.9 million $0.49 - Net sales of
$1.5 billion - Combined adjusted EBITDA of
$273.6 million - Repurchased
$29.2 million - Received
$77.1 million
"Despite a deflationary commodity market and an uncertain regulatory environment during the second quarter, our specialty ingredients business showed sequential improvement as it made the necessary changes to improve margins and earnings. DGD had a good quarter, while the
For the six months ended June 29, 2024, Darling Ingredients reported net sales of
DGD sold 311.5 million gallons of renewable diesel for the second quarter 2024 at an average of
Combined adjusted EBITDA for the second quarter 2024 was
The company repurchased approximately 807,000 shares of its common stock during the second quarter of 2024 for approximately
As of June 29, 2024, Darling Ingredients had
The company reaffirms guidance for fiscal year 2024, which remains at
Segment Financial Tables (in thousands, unaudited)
Feed | Food | Fuel | Corporate | Total | |
Three Months Ended June 29, 2024 | |||||
Net sales | $ 934,147 | $ 378,841 | $ 142,304 | $ — | $ 1,455,292 |
Cost of sales and operating expenses | 737,871 | 276,760 | 113,790 | — | 1,128,421 |
Gross margin | 196,276 | 102,081 | 28,514 | — | 326,871 |
Loss (gain) on sale of assets | 205 | 37 | (20) | — | 222 |
Selling, general and administrative expenses | 74,015 | 28,844 | 8,409 | 18,463 | 129,731 |
Acquisition and integration costs | — | — | — | 1,130 | 1,130 |
Change in fair value of contingent consideration | (33,122) | — | — | — | (33,122) |
Depreciation and amortization | 86,444 | 27,372 | 8,723 | 2,066 | 124,605 |
Equity in net income of Diamond Green Diesel | — | — | 44,197 | — | 44,197 |
Segment operating income/(loss) | $ 68,734 | $ 45,828 | $ 55,599 | $ (21,659) | $ 148,502 |
Equity in net income of other unconsolidated subsidiaries | 3,017 | — | — | — | 3,017 |
Segment income/(loss) | $ 71,751 | $ 45,828 | $ 55,599 | $ (21,659) | $ 151,519 |
Segment EBITDA | $ 122,056 | $ 73,200 | $ 20,125 | $ (18,463) | $ 196,918 |
DGD adjusted EBITDA (Darling's Share) | — | — | 76,642 | — | 76,642 |
Combined adjusted EBITDA | $ 122,056 | $ 73,200 | $ 96,767 | $ (18,463) | $ 273,560 |
Feed | Food | Fuel | Corporate | Total | |
Three Months Ended July 1, 2023 | |||||
Net sales | $ 1,141,661 | $ 476,093 | $ 139,867 | $ — | $ 1,757,621 |
Cost of sales and operating expenses | 876,413 | 371,095 | 112,194 | — | 1,359,702 |
Gross margin | 265,248 | 104,998 | 27,673 | — | 397,919 |
Loss (gain) on sale of assets | 322 | 2 | (65) | — | 259 |
Selling, general and administrative expenses | 77,406 | 33,684 | 4,971 | 20,690 | 136,751 |
Restructuring and asset impairment charges | — | 896 | — | — | 896 |
Acquisition and integration costs | — | — | — | 1,706 | 1,706 |
Change in fair value of contingent consideration | (7,499) | — | — | — | (7,499) |
Depreciation and amortization | 82,575 | 28,445 | 8,567 | 2,499 | 122,086 |
Equity in net income of Diamond Green Diesel | — | — | 212,964 | — | 212,964 |
Segment operating income/(loss) | $ 112,444 | $ 41,971 | $ 227,164 | $ (24,895) | $ 356,684 |
Equity in net income of other unconsolidated subsidiaries | 1,849 | — | — | — | 1,849 |
Segment income/(loss) | $ 114,293 | $ 41,971 | $ 227,164 | $ (24,895) | $ 358,533 |
Segment EBITDA | $ 187,520 | $ 71,312 | $ 22,767 | $ (20,690) | $ 260,909 |
DGD adjusted EBITDA (Darling's Share) | — | — | 247,398 | — | 247,398 |
Combined adjusted EBITDA | $ 187,520 | $ 71,312 | $ 270,165 | $ (20,690) | $ 508,307 |
Segment EBITDA consists of segment income (loss), less equity in net income from unconsolidated subsidiaries, less equity in net income of Diamond Green Diesel, plus depreciation and amortization, acquisition and integration costs, restructuring and asset impairment charges, change in fair value of contingent consideration, plus Darling's share of DGD Adjusted EBITDA.
Feed | Food | Fuel | Corporate | Total | |
Six Months Ended June 29, 2024 | |||||
Net sales | $ 1,823,995 | $ 770,123 | $ 281,473 | $ — | $ 2,875,591 |
Cost of sales and operating expenses | 1,443,640 | 574,905 | 226,542 | — | 2,245,087 |
Gross margin | 380,355 | 195,218 | 54,931 | — | 630,504 |
Loss (gain) on sale of assets | 337 | (257) | (432) | — | (352) |
Selling, general and administrative expenses | 151,153 | 60,588 | 17,154 | 39,979 | 268,874 |
Acquisition and integration costs | — | — | — | 5,184 | 5,184 |
Change in fair value of contingent consideration | (58,371) | — | — | — | (58,371) |
Depreciation and amortization | 174,013 | 56,240 | 17,390 | 4,471 | 252,114 |
Equity in net income of Diamond Green Diesel | — | — | 122,616 | — | 122,616 |
Segment operating income/(loss) | $ 113,223 | $ 78,647 | $ 143,435 | $ (49,634) | $ 285,671 |
Equity in net income of other unconsolidated subsidiaries | 5,327 | — | — | — | 5,327 |
Segment income/(loss) | $ 118,550 | $ 78,647 | $ 143,435 | $ (49,634) | $ 290,998 |
Segment EBITDA | $ 228,865 | $ 134,887 | $ 38,209 | $ (39,979) | $ 361,982 |
DGD adjusted EBITDA (Darling's Share) | — | — | 191,702 | — | 191,702 |
Combined adjusted EBITDA | $ 228,865 | $ 134,887 | $ 229,911 | $ (39,979) | $ 553,684 |
Feed | Food | Fuel | Corporate | Total | |
Six Months Ended July 1, 2023 | |||||
Net sales | $ 2,379,155 | $ 872,485 | $ 297,153 | $ — | $ 3,548,793 |
Cost of sales and operating expenses | 1,826,485 | 661,210 | 238,980 | — | 2,726,675 |
Gross margin | 552,670 | 211,275 | 58,173 | — | 822,118 |
Gain on sale of assets | (20) | (19) | (29) | — | (68) |
Selling, general and administrative expenses | 152,097 | 66,806 | 11,163 | 42,151 | 272,217 |
Restructuring and asset impairment charges | 92 | 5,328 | — | — | 5,420 |
Acquisition and integration costs | — | — | — | 8,728 | 8,728 |
Change in fair value of contingent consideration | (7,499) | — | — | — | (7,499) |
Depreciation and amortization | 172,895 | 42,918 | 16,960 | 5,319 | 238,092 |
Equity in net income of Diamond Green Diesel | — | — | 307,301 | — | 307,301 |
Segment operating income/(loss) | $ 235,105 | $ 96,242 | $ 337,380 | $ (56,198) | $ 612,529 |
Equity in net income of other unconsolidated subsidiaries | 1,969 | — | — | — | 1,969 |
Segment income/(loss) | $ 237,074 | $ 96,242 | $ 337,380 | $ (56,198) | $ 614,498 |
Segment EBITDA | $ 400,593 | $ 144,488 | $ 47,039 | $ (42,151) | $ 549,969 |
DGD adjusted EBITDA (Darling's Share) | — | — | 376,721 | — | 376,721 |
Combined adjusted EBITDA | $ 400,593 | $ 144,488 | $ 423,760 | $ (42,151) | $ 926,690 |
Segment EBITDA consists of segment income (loss), less equity in net income from unconsolidated subsidiaries, less equity in net income of Diamond Green Diesel, plus depreciation and amortization, acquisition and integration costs, restructuring and asset impairment charges, change in fair value of contingent consideration, plus Darling's share of DGD Adjusted EBITDA.
Darling Ingredients Inc. and Subsidiaries | |||||||||||
Consolidated Operating Results | |||||||||||
For the Three and Six Months Ended June 29, 2024 and July 1, 2023 | |||||||||||
(in thousands, except per share data, unaudited) | |||||||||||
Three Months Ended | Six Months Ended | ||||||||||
$ Change | $ Change | ||||||||||
June 29, | July 1, | Favorable | June 29, | July 1, | Favorable | ||||||
2024 | 2023 | (Unfavorable) | 2024 | 2023 | (Unfavorable) | ||||||
Net sales | $ 1,455,292 | $ 1,757,621 | $ (302,329) | $ 2,875,591 | $ 3,548,793 | $ (673,202) | |||||
Costs and expenses: | |||||||||||
Cost of sales and operating expenses | 1,128,421 | 1,359,702 | 231,281 | 2,245,087 | 2,726,675 | 481,588 | |||||
(Gain)/loss on sale of assets | 222 | 259 | 37 | (352) | (68) | 284 | |||||
Selling, general and administrative expenses | 129,731 | 136,751 | 7,020 | 268,874 | 272,217 | 3,343 | |||||
Restructuring and asset impairment charges | — | 896 | 896 | — | 5,420 | 5,420 | |||||
Acquisition and integration costs | 1,130 | 1,706 | 576 | 5,184 | 8,728 | 3,544 | |||||
Change in fair value of contingent consideration | (33,122) | (7,499) | 25,623 | (58,371) | (7,499) | 50,872 | |||||
Depreciation and amortization | 124,605 | 122,086 | (2,519) | 252,114 | 238,092 | (14,022) | |||||
Total costs and expenses | 1,350,987 | 1,613,901 | 262,914 | 2,712,536 | 3,243,565 | 531,029 | |||||
Equity in net income of Diamond Green Diesel | 44,197 | 212,964 | (168,767) | 122,616 | 307,301 | (184,685) | |||||
Operating income | 148,502 | 356,684 | (208,182) | 285,671 | 612,529 | (326,858) | |||||
Other expense: | |||||||||||
Interest expense | (69,225) | (70,193) | 968 | (132,101) | (120,492) | (11,609) | |||||
Foreign currency gain | 413 | 2,490 | (2,077) | 649 | 7,494 | (6,845) | |||||
Other income/(expense), net | (568) | 5,079 | (5,647) | 8,088 | 11,238 | (3,150) | |||||
Total other expense | (69,380) | (62,624) | (6,756) | (123,364) | (101,760) | (21,604) | |||||
Equity in net income of other unconsolidated | 3,017 | 1,849 | 1,168 | 5,327 | 1,969 | 3,358 | |||||
Income from operations before income taxes | 82,139 | 295,909 | (213,770) | 167,634 | 512,738 | (345,104) | |||||
Income tax expense | 774 | 40,712 | 39,938 | 4,681 | 67,686 | 63,005 | |||||
Net income | 81,365 | 255,197 | (173,832) | 162,953 | 445,052 | (282,099) | |||||
Net income attributable to noncontrolling interests | (2,499) | (2,814) | 315 | (2,930) | (6,868) | 3,938 | |||||
Net income attributable to Darling | $ 78,866 | $ 252,383 | $ (173,517) | $ 160,023 | $ 438,184 | $ (278,161) | |||||
Basic income per share: | $ 0.49 | $ 1.58 | $ (1.09) | $ 1.00 | $ 2.74 | $ (1.74) | |||||
Diluted income per share: | $ 0.49 | $ 1.55 | $ (1.06) | $ 0.99 | $ 2.69 | $ (1.70) | |||||
Number of diluted common shares: | 161,705 | 162,370 | 161,805 | 162,593 | |||||||
Darling Ingredients Inc. and Subsidiaries | |||
Balance Sheet Disclosures | |||
As of June 29, 2024 and December 30, 2023 | |||
(in thousands) | |||
(unaudited) | |||
June 29, | December 30, | ||
2024 | 2023 | ||
Cash and cash equivalents | $ 121,587 | $ 126,502 | |
Property, plant and equipment, net | $ 2,840,682 | $ 2,935,185 | |
Current portion of long-term debt | $ 92,258 | $ 60,703 | |
Long-term debt, net of current portion | $ 4,317,129 | $ 4,366,370 | |
Other Financial Data | |||
As of June 29, 2024 | |||
(unaudited) | |||
June 29, | |||
2024 | |||
Revolver availability | $ 814,426 | ||
Capital expenditures - YTD | $ 191,728 | ||
Projected Leverage Ratio | 4.24x | ||
Diamond Green Diesel Joint Venture | |||||||||||
Operating Financial Results | |||||||||||
For the Three and Six Months Ended June 30, 2024 and June 30, 2023 | |||||||||||
(in thousands, unaudited) | |||||||||||
Three Months Ended | Six Months Ended | ||||||||||
$ Change | $ Change | ||||||||||
June 30, | June 30, | Favorable | June 30, | June 30, | Favorable | ||||||
2024 | 2023 | (Unfavorable) | 2024 | 2023 | (Unfavorable) | ||||||
Revenues: | |||||||||||
Operating revenues | $ 1,184,076 | $ 2,246,111 | $ (1,062,035) | $ 2,595,191 | $ 3,926,161 | $ (1,330,970) | |||||
Expenses: | |||||||||||
Total costs and expenses less | 1,014,927 | 1,751,315 | 736,388 | 2,174,283 | 3,172,719 | 998,436 | |||||
Lower of cost or market (LCM) | 15,866 | — | (15,866) | 37,504 | — | (37,504) | |||||
Depreciation, amortization | 61,910 | 58,315 | (3,595) | 127,200 | 116,922 | (10,278) | |||||
Total costs and expenses | 1,092,703 | 1,809,630 | 716,927 | 2,338,987 | 3,289,641 | 950,654 | |||||
Operating income | 91,373 | 436,481 | (345,108) | 256,204 | 636,520 | (380,316) | |||||
Other income | 6,058 | 2,121 | 3,937 | 9,278 | 4,162 | 5,116 | |||||
Interest and debt expense, net | (9,037) | (12,674) | 3,637 | (20,279) | (26,080) | 5,801 | |||||
Income before income tax expense | 88,394 | 425,928 | (337,534) | 245,203 | 614,602 | (369,399) | |||||
Income tax benefit | — | — | — | (29) | — | 29 | |||||
Net income | $ 88,394 | $ 425,928 | $ (337,534) | $ 245,232 | $ 614,602 | $ (369,370) | |||||
Diamond Green Diesel Joint Venture | |||
Consolidated Balance Sheets | |||
June 30, 2024 and December 31, 2023 | |||
(in thousands) | |||
June 30, | December 31, | ||
2024 | 2023 | ||
(unaudited) | |||
Assets: | |||
Total current assets | $ 1,849,534 | $ 1,877,430 | |
Property, plant and equipment, net | 3,888,370 | 3,838,800 | |
Other assets | 122,629 | 89,697 | |
Total assets | $ 5,860,533 | $ 5,805,927 | |
Liabilities and members' equity: | |||
Total current portion of long term debt | $ 29,251 | $ 278,639 | |
Total other current liabilities | 404,090 | 417,918 | |
Total long term debt | 722,346 | 737,097 | |
Total other long term liabilities | 17,189 | 16,996 | |
Total members' equity | 4,687,657 | 4,355,277 | |
Total liabilities and members' equity | $ 5,860,533 | $ 5,805,927 | |
Darling Ingredients Inc. reports Adjusted EBITDA results, which is a Non-GAAP financial measure, as a compliment to results provided in accordance with generally accepted accounting principles (GAAP) (for additional information, see "Use of Non-GAAP Financial Measures" included later in this media release). The Company believes that Adjusted EBITDA provides additional useful information to investors. Adjusted EBITDA, as the Company uses the term, is calculated below:
Reconciliation of Net Income to (Non-GAAP) Adjusted EBITDA and (Non-GAAP) Pro forma | ||||||||
Adjusted EBITDA to Foreign Currency | ||||||||
For the Three and Six Months Ended June 29, 2024 and July 1, 2023 | ||||||||
(in thousands, unaudited) | ||||||||
Three Months Ended | Six Months Ended | |||||||
Adjusted EBITDA | June 29, | July 1, | June 29, | July 1, | ||||
( | 2024 | 2023 | 2024 | 2023 | ||||
Net income attributable to Darling | $ 78,866 | $ 252,383 | $ 160,023 | $ 438,184 | ||||
Depreciation and amortization | 124,605 | 122,086 | 252,114 | 238,092 | ||||
Interest expense | 69,225 | 70,193 | 132,101 | 120,492 | ||||
Income tax expense | 774 | 40,712 | 4,681 | 67,686 | ||||
Restructuring and asset impairment charges | — | 896 | — | 5,420 | ||||
Acquisition and integration costs | 1,130 | 1,706 | 5,184 | 8,728 | ||||
Change in fair value of contingent consideration | (33,122) | (7,499) | (58,371) | (7,499) | ||||
Foreign currency gain | (413) | (2,490) | (649) | (7,494) | ||||
Other (income)/expense, net | 568 | (5,079) | (8,088) | (11,238) | ||||
Equity in net income of Diamond Green Diesel | (44,197) | (212,964) | (122,616) | (307,301) | ||||
Equity in net income of other unconsolidated subsidiaries | (3,017) | (1,849) | (5,327) | (1,969) | ||||
Net income attributable to noncontrolling interests | 2,499 | 2,814 | 2,930 | 6,868 | ||||
Adjusted EBITDA (Non-GAAP) | $ 196,918 | $ 260,909 | $ 361,982 | $ 549,969 | ||||
Foreign currency exchange impact | 1,765 | (1) | — | 525 | (2) | — | ||
Pro forma Adjusted EBITDA to Foreign Currency (Non-GAAP) | $ 198,683 | $ 260,909 | $ 362,507 | $ 549,969 | ||||
DGD Joint Venture Adjusted EBITDA (Darling's share) | $ 76,642 | $ 247,398 | $ 191,702 | $ 376,721 | ||||
Darling plus Darling's share of DGD Joint Venture Adjusted EBITDA | $ 273,560 | $ 508,307 | $ 553,684 | $ 926,690 | ||||
(1) The average rates for the three months ended June 29, 2024 were | |||
(2) The average rates for the six months ended June 29, 2024 were |
About Darling Ingredients
A pioneer in circularity, Darling Ingredients Inc. (NYSE: DAR) takes material from the animal agriculture and food industries, and transforms them into valuable ingredients that nourish people, feed animals and crops, and fuel the world with renewable energy. The company operates over 260 facilities in more than 15 countries and processes about
Darling Ingredients will host a conference call on Thursday, July 25, 2024, at 9 a.m. Eastern Time (8 a.m. Central Time) to discuss second quarter 2024 financial results, which will be released earlier that day, and provide an update on company operations. A presentation with accompanying supplemental financial data will also be available at darlingii.com/investors.
To access the call as a listener, please register for the audio-only webcast.
To join the call as a participant to ask a question, please register in advance to receive a confirmation email with the dial-in number and PIN for immediate access on July 25, 2024, or call 844-868-8847 (
A replay of the call will be available online via the webcast registration link and via phone at 877-344-7529 (
Use of Non-GAAP Financial Measures:
Adjusted EBITDA is not a recognized accounting measurement under GAAP; it should not be considered as an alternative to net income, as a measure of operating results, or as an alternative to cash flow as a measure of liquidity. It is presented here not as an alternative to net income, but rather as a measure of the Company's operating performance. Since EBITDA (generally, net income plus interest expense, taxes, depreciation and amortization) is not calculated identically by all companies, the presentation in this report may not be comparable to EBITDA or Adjusted EBITDA presentations disclosed by other companies. Adjusted EBITDA is calculated above and represents for any relevant period, net income/(loss) plus depreciation and amortization, restructuring and asset impairment charges, acquisition and integration costs, change in fair value of contingent consideration, interest expense, income tax provision, other income/(expense) and equity in net (income)/loss of unconsolidated subsidiary. Management believes that Adjusted EBITDA is useful in evaluating the Company's operating performance compared to that of other companies in its industry because the calculation of Adjusted EBITDA generally eliminates the effects of financing, income taxes and certain non-cash and other items that may vary for different companies for reasons unrelated to overall operating performance.
Pro forma Adjusted EBITDA to Foreign Currency is not a recognized accounting measurement under GAAP. The Company evaluates the impact of foreign currency on its adjusted EBITDA. DGD Joint Venture Adjusted EBITDA (Darling's share) is not reflected in the Adjusted EBITDA or the Pro forma Adjusted EBITDA to Foreign Currency (Non-GAAP).
The Company's management uses Adjusted EBITDA as a measure to evaluate performance and for other discretionary purposes. In addition to the foregoing, management also uses or will use Adjusted EBITDA to measure compliance with certain financial covenants under the Company's Senior Secured Credit Facilities,
DGD Joint Venture Adjusted EBITDA (Darling's share) is not a recognized accounting measure under GAAP; it should not be considered as an alternative to net income or equity in net income of Diamond Green Diesel, as a measure of operating results, or as an alternative to cash flow as a measure of liquidity and is not intended to be a presentation in accordance with GAAP. The Company calculates DGD Joint Venture Adjusted EBITDA (Darling's share) by taking DGD's operating income plus DGD's depreciation, amortization and accretion expense and then multiplying by
Information reconciling forward-looking combined adjusted EBITDA to net income is unavailable to the Company without unreasonable effort. The Company is not able to provide reconciliations of combined adjusted EBITDA to net income because certain items required for such reconciliations are outside of the Company's control and/or cannot be reasonably predicted, such as the impact of volatile commodity prices on the Company's operations, impact of foreign currency exchange fluctuations, depreciation and amortization and the provision for income taxes. Preparation of such reconciliations for Darling Ingredients Inc. and the Company's joint venture, Diamond Green Diesel, would require a forward-looking balance sheet, statement of operations and statement of cash flows, prepared in accordance with GAAP for each entity, and such forward-looking financial statements are unavailable to the Company without unreasonable effort. The Company provides guidance for its combined adjusted EBITDA outlook that it believes will be achieved; however, it cannot accurately predict all the components of the combined adjusted EBITDA calculation.
EBITDA per gallon is not a recognized accounting measurement under GAAP; it should not be considered as an alternative to net income or equity in income of Diamond Green Diesel, as a measure of operating results, or as an alternative to cash flow as a measure of liquidity and is not intended to be a presentation in accordance with GAAP. EBITDA per gallon is presented here not as an alternative to net income or equity in income of Diamond Green Diesel, but rather as a measure of Diamond Green Diesel's operating performance. Since EBITDA per gallon (generally, net income plus interest expense, taxes, depreciation and amortization divided by total gallons sold) is not calculated identically by all companies, this presentation may not be comparable to EBITDA per gallon presentations disclosed by other companies. Management believes that EBITDA per gallon is useful in evaluating Diamond Green Diesel's operating performance compared to that of other companies in its industry because the calculation of EBITDA per gallon generally eliminates the effects of financing, income taxes and certain non-cash and other items presented on a per gallon basis that may vary for different companies for reasons unrelated to overall operating performance.
Cautionary Statements Regarding Forward-Looking Information:
This media release includes "forward-looking" statements that are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the statements. Statements that are not statements of historical facts are forward-looking statements and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Words such as "estimate," "guidance," "outlook," "project," "planned," "contemplate," "potential," "possible," "proposed," "intend," "believe," "anticipate," "expect," "may," "will," "would," "should," "could," and similar expressions are intended to identify forward-looking statements. All statements other than statements of historical facts included in this release are forward-looking statements. Forward-looking statements are based on the Company's current expectations and assumptions regarding its business, the economy and other future conditions. The Company cautions readers that any such forward-looking statements it makes are not guarantees of future performance and that actual results may differ materially from anticipated results or expectations expressed in its forward-looking statements as a result of a variety of factors, including many that are beyond the Company's control.
Important factors that could cause actual results to differ materially from the Company's expectations include: existing and unknown future limitations on the ability of the Company's direct and indirect subsidiaries to make their cash flow available to the Company for payments on the Company's indebtedness or other purposes; reduced demands or prices for biofuels, biogases or renewable electricity; global demands for grain and oilseed commodities, which have exhibited volatility, and can impact the cost of feed for cattle, hogs and poultry, thus affecting available rendering feedstock and selling prices for the Company's products; reductions in raw material volumes available to the Company due to weak margins in the meat production industry as a result of higher feed costs, reduced consumer demand, reduced volume due to government regulations affecting animal production or other factors, reduced volume from food service establishments, or otherwise; reduced demand for animal feed; reduced finished product prices, including a decline in fat, used cooking oil, protein or collagen (including, without limitation, collagen peptides and gelatin) finished product prices; changes to government policies around the world relating to renewable fuels and greenhouse gas ("GHG") emissions that adversely affect prices, margins or markets (including for the DGD Joint Venture), including programs like the
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Darling Ingredients Contacts | |
Investors: | Suann Guthrie |
Senior VP, Investor Relations, Sustainability & Communications | |
(469) 214-8202; suann.guthrie@darlingii.com | |
Media: | Jillian Fleming |
Director, Global Communications | |
(972) 541-7115; jillian.fleming@darlingii.com | |
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SOURCE Darling Ingredients Inc.
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