Darling Ingredients Inc. Reports Third Quarter 2020 Financial Results
Darling Ingredients reported a strong third quarter for 2020, with net income of $101.1 million, or $0.61 per diluted share, compared to $25.7 million a year earlier. Net sales increased to $850.6 million from $842.0 million in Q3 2019, aided by better performance in food and fuel segments. Adjusted EBITDA reached $218.5 million, driven by record sales of 80 million gallons of Diamond Green Diesel. The company also paid down $145 million of long-term debt, with total debt at $1.5 billion. Year-to-date net income stands at $252.1 million, up significantly from $70.0 million in 2019.
- Net income increased to $101.1 million in Q3 2020 from $25.7 million in Q3 2019.
- Record sales of 80 million gallons achieved in Diamond Green Diesel segment.
- Adjusted EBITDA of $218.5 million compared to $147.8 million in Q3 2019.
- Year-to-date net income rose to $252.1 million, from $70.0 million in 2019.
- Successfully reduced outstanding term loan B by $145 million.
- Total debt remained significant at $1.5 billion.
IRVING, Texas, Nov. 3, 2020 /PRNewswire/ -- Darling Ingredients Inc. (NYSE: DAR, "Darling") --
Third Quarter 2020
- Net income of
$101.1 million , or$0.61 per GAAP diluted share - Net Sales of
$850.6 million - Combined adjusted EBITDA of
$218.5 million - Diamond Green Diesel ("DGD") earned
$2.41 EBITDA per gallon on approximately 80 million gallons sold - Global Ingredients business trailing twelve month EBITDA of
$467.6 million demonstrates the continued strength and diversity of the platform
Darling reported net sales of
"Better results in our food segment combined with a strong performance in our international fuel segment, drove the results for our best quarterly performance of 2020," said Randall C. Stuewe, Chairman and Chief Executive Officer of Darling Ingredients Inc. "We continue to see improved margins in our global rendering through better cost management and our hydrolyzed collagen sales most affected by the economic impact of COVID have seen a solid turnaround."
"DGD had record sales volume of 80 million gallons for the third quarter as our vertically integrated supply chain that supports the lowest cost production system and the lowest carbon scoring feedstocks in North America continued to produce strong results. The plant turnaround in October was completed on schedule as we look to finish up 2020 on a positive note producing 285 million gallons of renewable diesel for the year," Stuewe added.
"Our balance sheet remains strong as we paid down our outstanding term loan B by
For the nine months ended September 26, 2020, Darling reported net sales of
In October 2020, Darling acquired a private company that owned rendering plants located in Belgium for approximately
As of September 26, 2020, Darling had
Combined adjusted EBITDA was
Segment Financial Tables (in thousands)
Three Months Ended September 26, 2020 | Feed | Food | Fuel | Corporate | Total |
Net Sales | $ 483,025 | $ 291,842 | $ 75,702 | $ - | $ 850,569 |
Cost of sales and operating expenses | 361,576 | 226,745 | 50,047 | - | 638,368 |
Gross Margin | $ 121,449 | $ 65,097 | $ 25,655 | $ - | $ 212,201 |
Loss/(gain) on sale of assets | 167 | 16 | (61) | - | 122 |
Selling, general and administrative expenses | 49,028 | 23,366 | 5,038 | 12,561 | 89,993 |
Depreciation and amortization | 53,764 | 20,648 | 8,633 | 2,685 | 85,730 |
Equity in net income of Diamond Green Diesel | - | - | 91,099 | - | 91,099 |
Segment operating income/(loss) | $ 18,490 | $ 21,067 | $ 103,144 | $ (15,246) | $ 127,455 |
Equity in net income of unconsolidated subsidiaries | $ 906 | $ - | $ - | $ - | $ 906 |
Segment Income/(loss) | $ 19,396 | $ 21,067 | $ 103,144 | $ (15,246) | $ 128,361 |
Segment EBITDA | $ 72,254 | $ 41,715 | $ 20,678 | $ (12,561) | $ 122,086 |
DGD adjusted EBITDA (Darling's Share) | $ - | $ - | $ 96,435 | $ - | $ 96,435 |
Combined adjusted EBITDA | $ 72,254 | $ 41,715 | $ 117,113 | $ (12,561) | $ 218,521 |
Three Months Ended September 28, 2019 | Feed | Food | Fuel | Corporate | Total |
Net Sales | $ 496,978 | $ 276,467 | $ 68,604 | $ - | $ 842,049 |
Cost of sales and operating expenses | 379,792 | 214,643 | 58,488 | - | 652,923 |
Gross Margin | $ 117,186 | $ 61,824 | $ 10,116 | $ - | $ 189,126 |
Loss/(gain) on sale of assets | (2,429) | (253) | 13 | - | (2,669) |
Selling, general and administrative expenses | 47,319 | 22,811 | 912 | 12,507 | 83,549 |
Depreciation and amortization | 50,182 | 19,743 | 7,895 | 2,587 | 80,407 |
Equity in net income of Diamond Green Diesel | - | - | 32,020 | - | 32,020 |
Segment operating income/(loss) | $ 22,114 | $ 19,523 | $ 33,316 | $ (15,094) | $ 59,859 |
Equity in net loss of unconsolidated subsidiaries | $ (665) | $ - | $ - | $ - | $ (665) |
Segment income/(loss) | $ 21,449 | $ 19,523 | $ 33,316 | $ (15,094) | $ 59,194 |
Segment EBITDA | $ 72,296 | $ 39,266 | $ 9,191 | $ (12,507) | $ 108,246 |
DGD adjusted EBITDA (Darling's Share) | $ - | $ - | $ 39,548 | $ - | $ 39,548 |
Combined adjusted EBITDA | $ 72,296 | $ 39,266 | $ 48,739 | $ (12,507) | $ 147,794 |
Segment Financial Tables (in thousands) continued
Nine Months Ended September 26, 2020 | Feed | Food | Fuel | Corporate | Total |
Net Sales | $ 1,499,340 | $ 841,070 | $ 211,674 | $ - | $ 2,552,084 |
Cost of sales and operating expenses | 1,117,931 | 652,334 | 147,358 | - | 1,917,623 |
Gross Margin | $ 381,409 | $ 188,736 | $ 64,316 | $ - | $ 634,461 |
Loss/(gain) on sale of assets | 293 | (30) | (53) | - | 210 |
Selling, general and administrative expenses | 153,459 | 71,406 | 10,645 | 40,869 | 276,379 |
Depreciation and amortization | 159,968 | 60,925 | 24,705 | 8,113 | 253,711 |
Equity in net income of Diamond Green Diesel | - | - | 252,411 | - | 252,411 |
Segment operating income/(loss) | $ 67,689 | $ 56,435 | $ 281,430 | $ (48,982) | $ 356,572 |
Equity in net income of unconsolidated subsidiaries | $ 2,467 | $ - | $ - | $ - | $ 2,467 |
Segment income/(loss) | $ 70,156 | $ 56,435 | $ 281,430 | $ (48,982) | $ 359,039 |
Segment EBITDA | $ 227,657 | $ 117,360 | $ 53,724 | $ (40,869) | $ 357,872 |
DGD adjusted EBITDA (Darling's Share) | $ - | $ - | $ 269,177 | $ - | $ 269,177 |
Combined adjusted EBITDA | $ 227,657 | $ 117,360 | $ 322,901 | $ (40,869) | $ 627,049 |
Nine Months Ended September 28, 2019 | Feed | Food | Fuel | Corporate | Total |
Net Sales | $ 1,480,244 | $ 830,466 | $ 193,767 | $ - | $ 2,504,477 |
Cost of sales and operating expenses | 1,143,606 | 643,091 | 161,855 | - | 1,948,552 |
Gross Margin | $ 336,638 | $ 187,375 | $ 31,912 | $ - | $ 555,925 |
Loss/(gain) on sale of assets | (7,343) | (13,518) | 16 | - | (20,845) |
Selling, general and administrative expenses | 142,615 | 68,129 | 583 | 38,242 | 249,569 |
Depreciation and amortization | 148,271 | 59,115 | 24,055 | 7,616 | 239,057 |
Equity in net income of Diamond Green Diesel | - | - | 94,390 | - | 94,390 |
Segment operating income/(loss) | $ 53,095 | $ 73,649 | $ 101,648 | $ (45,858) | $ 182,534 |
Equity in net loss of unconsolidated subsidiaries | $ (1,087) | $ - | $ - | $ - | $ (1,087) |
Segment income/(loss) | $ 52,008 | $ 73,649 | $ 101,648 | $ (45,858) | $ 181,447 |
Segment EBITDA | $ 201,366 | $ 132,764 | $ 31,313 | $ (38,242) | $ 327,201 |
DGD adjusted EBITDA (Darling's Share) | $ - | $ - | $ 113,270 | $ - | 113,270 |
Combined adjusted EBITDA | $ 201,366 | $ 132,764 | $ 144,583 | $ (38,242) | $ 440,471 |
Darling Ingredients Inc. and Subsidiaries | ||||
September 26, | December 28, | |||
2020 | 2019 | |||
ASSETS | (unaudited) | |||
Current assets: | ||||
Cash and cash equivalents | $ 65,845 | $ 72,935 | ||
Restricted cash | 110 | 110 | ||
Accounts receivable, net | 373,583 | 406,338 | ||
Inventories | 406,805 | 362,957 | ||
Prepaid expenses | 52,359 | 46,599 | ||
Income taxes refundable | 3,940 | 3,317 | ||
Other current assets | 28,532 | 25,032 | ||
Total current assets | 931,174 | 917,288 | ||
Property, plant and equipment, net | 1,789,172 | 1,802,411 | ||
Intangible assets, net | 474,793 | 526,394 | ||
Goodwill | 1,239,343 | 1,223,291 | ||
Investment in unconsolidated subsidiaries | 742,875 | 689,354 | ||
Operating lease right-of-use assets | 142,269 | 124,726 | ||
Other assets | 45,598 | 47,400 | ||
Deferred income taxes | 15,762 | 14,394 | ||
$ 5,380,986 | $ 5,345,258 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||
Current liabilities: | ||||
Current portion of long-term debt | $ 26,185 | $ 90,996 | ||
Accounts payable, principally trade | 206,998 | 239,252 | ||
Income taxes payable | 19,013 | 8,895 | ||
Current operating lease liabilities | 40,973 | 37,805 | ||
Accrued expenses | 330,385 | 311,391 | ||
Total current liabilities | 623,554 | 688,339 | ||
Long-term debt, net of current portion | 1,448,019 | 1,558,429 | ||
Long-term operating lease liabilities | 105,821 | 91,424 | ||
Other noncurrent liabilities | 102,559 | 115,785 | ||
Deferred income taxes | 265,844 | 247,931 | ||
Total liabilities | 2,545,797 | 2,701,908 | ||
Commitments and contingencies | ||||
Total Darling's stockholders' equity | 2,773,920 | 2,565,819 | ||
Noncontrolling interests | 61,269 | 77,531 | ||
Total stockholders' equity | $ 2,835,189 | $ 2,643,350 | ||
$ 5,380,986 | $ 5,345,258 | |||
Darling Ingredients Inc. and Subsidiaries | ||||||||||||||
(unaudited) | ||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||
$ Change | $ Change | |||||||||||||
September 26, | September 28, | Favorable | September 26, | September 28, | Favorable | |||||||||
2020 | 2019 | (Unfavorable) | 2020 | 2019 | (Unfavorable) | |||||||||
Net sales | $ 850,569 | $ 842,049 | $ 8,520 | $ 2,552,084 | $ 2,504,477 | $ 47,607 | ||||||||
Costs and expenses: | ||||||||||||||
Cost of sales and operating expenses | 638,368 | 652,923 | 14,555 | 1,917,623 | 1,948,552 | 30,929 | ||||||||
Loss (gain) on sale of assets | 122 | (2,669) | (2,791) | 210 | (20,845) | (21,055) | ||||||||
Selling, general and administrative expenses | 89,993 | 83,549 | (6,444) | 276,379 | 249,569 | (26,810) | ||||||||
Depreciation and amortization | 85,730 | 80,407 | (5,323) | 253,711 | 239,057 | (14,654) | ||||||||
Total costs and expenses | 814,213 | 814,210 | (3) | 2,447,923 | 2,416,333 | (31,590) | ||||||||
Equity in net income of Diamond Green Diesel | 91,099 | 32,020 | 59,079 | 252,411 | 94,390 | 158,021 | ||||||||
Operating income | 127,455 | 59,859 | 67,596 | 356,572 | 182,534 | 174,038 | ||||||||
Other expense: | ||||||||||||||
Interest expense | (18,793) | (19,359) | 566 | (55,803) | (60,088) | 4,285 | ||||||||
Debt extinguishment costs | - | - | - | - | (12,126) | 12,126 | ||||||||
Foreign currency gain/(loss) | (1,239) | 466 | (1,705) | (709) | (654) | (55) | ||||||||
Other expense, net | (1,912) | (2,614) | 702 | (5,278) | (7,158) | 1,880 | ||||||||
Total other expense | (21,944) | (21,507) | (437) | (61,790) | (80,026) | 18,236 | ||||||||
Equity in net income/(loss) | ||||||||||||||
of unconsolidated subsidiaries | 906 | (665) | 1,571 | 2,467 | (1,087) | 3,554 | ||||||||
Income before income taxes | 106,417 | 37,687 | 68,730 | 297,249 | 101,421 | 195,828 | ||||||||
Income tax expense | 4,812 | 10,850 | 6,038 | 43,058 | 23,900 | (19,158) | ||||||||
Net income | 101,605 | 26,837 | 74,768 | 254,191 | 77,521 | 176,670 | ||||||||
Net income attributable to | ||||||||||||||
noncontrolling interests | (480) | (1,116) | 636 | (2,117) | (7,530) | 5,413 | ||||||||
Net income attributable to Darling | $ 101,125 | $ 25,721 | $ 75,404 | $ 252,074 | $ 69,991 | $ 182,083 | ||||||||
Basic income per share: | $ 0.62 | $ 0.16 | $ 0.46 | $ 1.55 | $ 0.42 | $ 1.13 | ||||||||
Diluted income per share: | $ 0.61 | $ 0.15 | $ 0.46 | $ 1.51 | $ 0.42 | $ 1.09 | ||||||||
Number of diluted common shares: | 166,997 | 168,266 | 166,974 | 168,453 | ||||||||||
Darling Ingredients Inc. and Subsidiaries | ||||||
Nine Months Ended | ||||||
Sept 26, | Sept 28, | |||||
Cash flows from operating activities: | 2020 | 2019 | ||||
Net income | $ 254,191 | $ 77,521 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||
Depreciation and amortization | 253,711 | 239,057 | ||||
Loss/(gain) on disposal of property, plant, equipment and other assets | 210 | (20,845) | ||||
Gain on insurance proceeds from insurance settlement | - | (1,371) | ||||
Deferred taxes | 13,362 | (4,765) | ||||
Increase (decrease) in long-term pension liability | (7,960) | 1,122 | ||||
Stock-based compensation expense | 19,202 | 18,543 | ||||
Write-off deferred loan costs | 2,419 | 4,721 | ||||
Deferred loan cost amortization | 4,242 | 4,435 | ||||
Equity in net income of Diamond Green Diesel and other unconsolidated subsidiaries | (254,878) | (93,303) | ||||
Distributions of earnings from Diamond Green Diesel and other unconsolidated subsidiaries | 207,165 | 57,118 | ||||
Changes in operating assets and liabilities, net of effects from acquisitions: | ||||||
Accounts receivable | 36,083 | 20,388 | ||||
Income taxes refundable/payable | 8,282 | 8,058 | ||||
Inventories and prepaid expenses | (43,980) | (34,371) | ||||
Accounts payable and accrued expenses | (10,832) | (19,799) | ||||
Other | (10,804) | 6,173 | ||||
Net cash provided by operating activities | 470,413 | 262,682 | ||||
Cash flows from investing activities: | ||||||
Capital expenditures | (184,919) | (245,092) | ||||
Acquisitions, net of cash acquired | - | (1,431) | ||||
Investment in unconsolidated subsidiary | - | (2,000) | ||||
Gross proceeds from disposal of property, plant and equipment and other assets | 1,291 | 15,402 | ||||
Proceeds from insurance settlement | - | 1,371 | ||||
Payments related to routes and other intangibles | (3,712) | (3,150) | ||||
Net cash used by investing activities | (187,340) | (234,900) | ||||
Cash flows from financing activities: | ||||||
Proceeds from long-term debt | 24,085 | 511,985 | ||||
Payments on long-term debt | (171,640) | (566,107) | ||||
Borrowings from revolving credit facility | 390,971 | 325,485 | ||||
Payments on revolving credit facility | (415,800) | (332,884) | ||||
Net cash overdraft financing | (33,385) | 27,858 | ||||
Deferred loan costs | (3,688) | (7,027) | ||||
Issuance of common stock | 67 | 39 | ||||
Repurchase of common stock | (55,044) | (11,740) | ||||
Minimum withholding taxes paid on stock awards | (7,980) | (3,247) | ||||
Acquisition of noncontrolling interest | (8,784) | - | ||||
Distributions to noncontrolling interests | (6,253) | (4,500) | ||||
Net cash used by financing activities | (287,451) | (60,138) | ||||
Effect of exchange rate changes on cash flows | (2,712) | (5,732) | ||||
Net decrease in cash, cash equivalents and restricted cash | (7,090) | (38,088) | ||||
Cash, cash equivalents and restricted cash at beginning of year | 73,045 | 107,369 | ||||
Cash, cash equivalents and restricted cash at end of period | $ 65,955 | $ 69,281 | ||||
Supplemental disclosure of cash flow information: | ||||||
Accrued capital expenditures | $ (2,202) | $ 3,978 | ||||
Cash paid during the period for: | ||||||
Interest, net of capitalized interest | $ 39,481 | $ 49,727 | ||||
Income taxes, net of refunds | $ 24,868 | $ 21,475 | ||||
Non-cash operating activities: | ||||||
Operating lease right of use obtained in exchange for new lease liabilities | $ 44,479 | $ 16,425 | ||||
Non-cash financing activities: | ||||||
Debt issued for service contract assets | $ 21 | $ - | ||||
Diamond Green Diesel Joint Venture | ||||||
September 30, | December 31, | |||||
2020 | 2019 | |||||
Assets: | (unaudited) | |||||
Total current assets | $ 465,669 | $ 668,026 | ||||
Property, plant and equipment, net | 1,039,802 | 713,489 | ||||
Other assets | 32,813 | 30,710 | ||||
Total assets | $ 1,538,284 | $ 1,412,225 | ||||
Liabilities and members' equity: | ||||||
Total current portion of long term debt | $ 506 | $ 341 | ||||
Total other current liabilities | 98,618 | 75,802 | ||||
Total long term debt | 8,839 | 8,742 | ||||
Total other long term liabilities | 3,875 | 4,422 | ||||
Total members' equity | 1,426,446 | 1,322,918 | ||||
Total liabilities and members' equity | $ 1,538,284 | $ 1,412,225 | ||||
Diamond Green Diesel Joint Venture | ||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||
$ Change | $ Change | |||||||||||||
September 30, | September 30, | Favorable | September 30, | September 30, | Favorable | |||||||||
Revenues: | 2020 | 2019 | (Unfavorable) | 2020 | 2019 | (Unfavorable) | ||||||||
Operating revenues | $ 346,276 | $ 262,118 | $ 84,158 | $ 1,000,717 | $ 859,647 | $ 141,070 | ||||||||
Expenses: | ||||||||||||||
Total costs and expenses less | ||||||||||||||
depreciation, amortization and | 153,406 | 183,022 | 29,616 | 462,364 | 633,109 | 170,745 | ||||||||
Depreciation, amortization and | 10,772 | 15,242 | 4,470 | 33,660 | 38,574 | 4,914 | ||||||||
accretion expense | ||||||||||||||
Total costs and expenses | 164,178 | 198,264 | 34,086 | 496,024 | 671,683 | 175,659 | ||||||||
Operating income | 182,098 | 63,854 | 118,244 | 504,693 | 187,964 | 316,729 | ||||||||
Other income | 415 | 506 | (91) | 1,076 | 1,781 | (705) | ||||||||
Interest and debt expense, net | (315) | (320) | 5 | (947) | (965) | 18 | ||||||||
Net income | $ 182,198 | $ 64,040 | $ 118,158 | $ 504,822 | $ 188,780 | $ 316,042 | ||||||||
Darling Ingredients Inc. reports Adjusted EBITDA results, which is a Non-GAAP financial measure, as a complement 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
For the Three-Month and Nine-Month Periods Ended September 26, 2020 and September 28, 2019
Three Months Ended | Nine Months Ended | ||||||||
Adjusted EBITDA | September 26, | September 28, | September 26, | September 28, | |||||
(U.S. dollars in thousands) | 2020 | 2019 | 2020 | 2019 | |||||
Net income attributable to Darling | $ 101,125 | $ 25,721 | $ 252,074 | $ 69,991 | |||||
Depreciation and amortization | 85,730 | 80,407 | 253,711 | 239,057 | |||||
Interest expense | 18,793 | 19,359 | 55,803 | 60,088 | |||||
Income tax expense | 4,812 | 10,850 | 43,058 | 23,900 | |||||
Foreign currency loss/(gain) | 1,239 | (466) | 709 | 654 | |||||
Other expense, net | 1,912 | 2,614 | 5,278 | 7,158 | |||||
Debt extinguishment costs | - | - | - | 12,126 | |||||
Equity in net income of Diamond Green Diesel | (91,099) | (32,020) | (252,411) | (94,390) | |||||
Equity in net (income)/loss of unconsolidated subsidiaries | (906) | 665 | (2,467) | 1,087 | |||||
Net income attributable to noncontrolling interests | 480 | 1,116 | 2,117 | 7,530 | |||||
Adjusted EBITDA (Non-GAAP) | $ 122,086 | $ 108,246 | $ 357,872 | $ 327,201 | |||||
Foreign currency exchange impact | (3,702) | (1) | - | 407 | (2) | - | |||
Pro forma Adjusted EBITDA to Foreign Currency (Non-GAAP) | $ 118,384 | $ 108,246 | $ 358,279 | $ 327,201 | |||||
DGD Joint Venture Adjusted EBITDA (Darling's Share) | $ 96,435 | $ 39,548 | $ 269,177 | $ 113,270 | |||||
Darling plus Darling's share of DGD Joint Venture Adjusted EBITDA | $ 218,521 | $ 147,794 | $ 627,049 | $ 440,471 | |||||
(1) The average rate assumption used in this calculation was the actual fiscal average rate for the three months ended | |||||||||
September 26, 2020 of | |||||||||
September 28, 2019 of | |||||||||
(2) The average rate assumption used in this calculation was the actual fiscal average rate for the nine months ended | |||||||||
September 26, 2020 of | |||||||||
September 28, 2019 of | |||||||||
About Darling
Darling Ingredients Inc. (NYSE: DAR) is one of the world's leading producers of organic ingredients, producing a wide array of sustainable protein and fat products while being one of the largest producers of renewable clean energy. With operations on five continents, Darling collects waste streams from the agri-food industry, repurposing into specialty ingredients, such as hydrolyzed collagen, edible and feed-grade fats, animal proteins and meals, plasma, pet food ingredients, fuel feedstocks, and green bioenergy. The Company sells its products around the globe and works to strengthen our promise for a better tomorrow, creating product applications for health, nutrients and bioenergy while optimizing our services to the food chain. Darling is a
Darling Ingredients Inc. will host a conference call to discuss the Company's third quarter 2020 financial results at 9:00 am Eastern Time (8:00 am Central Time) on Wednesday, November 4, 2020. To listen to the conference call, participants calling from within North America should dial 1-844-868-8847; international participants should dial 1-412-317-6593. Please refer to access code 10149629. Please call approximately ten minutes before the start of the call to ensure that you are connected.
The call will also be available as a live audio webcast that can be accessed on the Company website at http://ir.darlingii.com. Beginning one hour after its completion, a replay of the call can be accessed through November 11, 2020, by dialing 1-877-344-7529 (U.S. callers), 1-855-669-9658 (Canada) and 1-412-317-0088 (international callers). The access code for the replay is 10149629. The conference call will also be archived on the Company's website.
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 and is not intended to be a presentation in accordance with GAAP. Adjusted EBITDA 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, this presentation may not be comparable to EBITDA or Adjusted EBITDA presentations disclosed by other companies. Adjusted EBITDA is calculated in this presentation and represents, for any relevant period, net income/(loss) plus depreciation and amortization, goodwill and long-lived asset impairment, interest expense, (income)/loss from discontinued operations, net of tax, income tax provision, other income/(expense) and equity in net 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.
As a result, 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,
Cautionary Statements Regarding Forward-Looking Information:
{This media release contains "forward-looking" statements regarding the business operations and prospects of Darling Ingredients Inc. and industry factors affecting it. These statements are identified by words such as "believe," "anticipate," "expect," "estimate," "intend," "could," "may," "will," "should," "planned," "potential," "continue," "momentum," and other words referring to events that may occur in the future. These statements reflect Darling Ingredient's current view of future events and are based on its assessment of, and are subject to, a variety of risks and uncertainties beyond its control, each of which could cause actual results to differ materially from those indicated in the forward-looking statements. These factors include, among others, 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; global demands for bio-fuels and 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 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 and used cooking oil finished product prices; changes to worldwide government policies relating to renewable fuels and greenhouse gas("GHG") emissions that adversely affect programs like the U.S. government's renewable fuel standard, low carbon fuel standards ("LCFS") and tax credits for biofuels both in the United States and abroad; possible product recall resulting from developments relating to the discovery of unauthorized adulterations to food or food additives; the occurrence of 2009 H1N1 flu (initially known as "Swine Flu"), Highly pathogenic strains of avian influenza (collectively known as "Bird Flu"), severe acute respiratory syndrome ("SARS"), bovine spongiform encephalopathy (or "BSE"), porcine epidemic diarrhea ("PED") or other diseases associated with animal origin in the United States or elsewhere, such as the outbreak of African Swine Fever ("ASF") in China and elsewhere; the occurrence of pandemics, epidemics or disease outbreaks, such as the current COVID-19 outbreak; unanticipated costs and/or reductions in raw material volumes related to the Company's compliance with the existing or unforeseen new U.S. or foreign (including, without limitation, China) regulations (including new or modified animal feed, Bird Flu, SARS, PED, BSE, ASF or similar or unanticipated regulations) affecting the industries in which the Company operates or its value added products; risks associated with the DGD Joint Venture, including possible unanticipated operating disruptions and issues relating to the announced expansion project; risks and uncertainties relating to international sales and operations, including imposition of tariffs, quotas, trade barriers and other trade protections imposed by foreign countries; difficulties or a significant disruption in our information systems or failure to implement new systems and software successfully, risks relating to possible third party claims of intellectual property infringement; increased contributions to the Company's pension and benefit plans, including multiemployer and employer-sponsored defined benefit pension plans as required by legislation, regulation or other applicable U.S. or foreign law or resulting from a U.S. mass withdrawal event; bad debt write-offs; loss of or failure to obtain necessary permits and registrations; continued or escalated conflict in the Middle East, North Korea, Ukraine or elsewhere; uncertainty regarding the exit of the U.K. from the European Union; and/or unfavorable export or import markets. These factors, coupled with volatile prices for natural gas and diesel fuel, climate conditions, currency exchange fluctuations, general performance of the U.S. and global economies, disturbances in world financial, credit, commodities and stock markets, and any decline in consumer confidence and discretionary spending, including the inability of consumers and companies to obtain credit due to lack of liquidity in the financial markets, among others, could cause actual results to vary materially from the forward looking statements included in this release or negatively impact the Company's results of operations. Among other things, future profitability may be affected by the Company's ability to grow its business, which faces competition from companies that may have substantially greater resources than the Company. The Company's announced share repurchase program may be suspended or discontinued at any time and purchases of shares under the program are subject to market conditions and other factors, which are likely to change from time to time. Other risks and uncertainties regarding Darling Ingredients Inc., its business and the industries in which it operates are referenced from time to time in the Company's filings with the Securities and Exchange Commission. Darling Ingredients Inc. is under no obligation to (and expressly disclaims any such obligation to) update or alter its forward-looking statements whether as a result of new information, future events or otherwise.}
For More Information, contact:
Jim Stark, Vice President, Investor Relations Email : james.stark@darlingii.com
5601 MacArthur Blvd., Irving, Texas 75038 Phone : 972-281-4823
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SOURCE Darling Ingredients Inc.
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