IRVING, Texas, Feb. 25, 2020 /PRNewswire/ -- Darling Ingredients
Inc. (NYSE: DAR, "Darling") --
Fourth Quarter 2019
- Net income of $242.6 million, or
$1.44 per GAAP diluted share
- Net Sales of $859.4 million
- Adjusted EBITDA of $385.8
million
- Adjusted EBITDA (excluding 2018 BTC) of $299.2 million
Full Year 2019
- Net income of $312.6 million, or
$1.86 per GAAP diluted share
- Net Sales of $3.4 billion
- Adjusted EBITDA of $826.3
million
- Adjusted EBITDA (excluding 2018 BTC) of $739.7 million
Darling reported net sales of $859.4
million for the fourth quarter of 2019, as compared with net
sales of $853.1 million for the same
period a year ago. Net income attributable to Darling for the three
months ended December 28, 2019 was
$242.6 million, or $1.44 per diluted share, compared to a net income
of $40.6 million, or $0.24 per diluted share, for the fourth quarter
of 2018. Adjusted net income attributable to Darling for the fourth
quarter of 2019 was $156.0 million or
$0.92 per diluted share. The
adjustment for the fourth quarter is associated with the 2018
retroactive blender's tax credit ('BTC').
"Our investment in Diamond Green
Diesel continues to provide us with outstanding results and
the growth of low carbon fuel standards around the world, puts
Darling at the forefront of the green revolution," said
Randall C. Stuewe, Chairman and
Chief Executive Officer of Darling Ingredients Inc. "Our global
rendering operations continue to process higher volumes of raw
materials, positioning us to be the preferred supplier of animal
fats and oils for the biofuels industry."
"Our food segment results showed solid growth in 2019 and we
believe that the second half of 2020 will show additional strength
as we complete the expansion of three additional Peptan facilities
in the second and third quarters of this year," added Stuewe.
"Demand for collagen products continue to grow exponentially and
our growth strategy of investing in additional production
capacities enhances our sustainable portfolio of products and
specialty ingredients."
For the fiscal year ended 2019, Darling reported net sales of
$3.4 billion, as compared with net
sales of $3.4 billion for the fiscal
year ended 2018. Net Income attributable to Darling for the fiscal
year ended December 28, 2019 was
$312.6 million, or $1.86 per diluted share, as compared to a net
income of $101.5 million, or
$0.60 per diluted share, for the
fiscal year ended December 29, 2018.
Adjusted net income attributable to Darling for the fiscal year of
2019 was $226.0 million or
$1.34 per diluted share. The
adjustment for the fiscal year is associated with the 2018
retroactive BTC.
Adjusted EBITDA, which is a Non-GAAP financial measure as
outlined later in this release, was $385.8
million for the fourth quarter of 2019, which includes
$276.2 million of Darling's share of
the DGD joint venture. Fourth quarter 2019 adjusted EBITDA
excluding the 2018 BTC was $299.2
million. Adjusted EBITDA for the fiscal year of 2019 was
$826.3 million, which included
$389.4 million of Darling's share of
the DGD joint venture. Fiscal 2019 adjusted EBITDA excluding the
2018 BTC was $739.7 million.
As of December 28, 2019, Darling
had $73 million in cash and cash
equivalents, and $911.9 million
available under committed revolving credit agreements, some of
which are subject to restrictions and other lending conditions.
Total debt outstanding at the end of the fiscal year, was
$1.6 billion.
Segment Financial
Tables
|
(In thousands)
|
Three Months Ended
December 28, 2019
|
Feed
Ingredients
|
Food
Ingredients
|
Fuel
Ingredients
|
Corporate
|
Total
|
|
|
|
|
|
|
Net Sales
|
$
490,317
|
$
288,619
|
$
80,492
|
$
-
|
$
859,428
|
Cost of sales and
operating expenses
|
375,990
|
221,527
|
43,016
|
-
|
640,533
|
Gross
Margin
|
$
114,327
|
$
67,092
|
$
37,476
|
$
-
|
$
218,895
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
$
57,872
|
$
29,234
|
$
2,179
|
$
19,669
|
$
108,954
|
Loss(Gain) on
sale of assets
|
(377)
|
343
|
297
|
-
|
263
|
Depreciation and
amortization
|
55,185
|
20,556
|
7,891
|
2,821
|
86,453
|
Equity in net income
of Diamond Green Diesel
|
-
|
-
|
270,062
|
-
|
270,062
|
Segment Operating
Income
|
$
1,647
|
$
16,959
|
$
297,171
|
$ (22,490)
|
$
293,287
|
Equity in Net Income
of Unconsolidated Subsidiaries
|
$
1,515
|
$
-
|
$
-
|
$
-
|
$
1,515
|
Segment
Income
|
$
3,162
|
$
16,959
|
$
297,171
|
$ (22,490)
|
$
294,802
|
|
|
|
|
|
|
Segment
EBITDA
|
$
56,832
|
$
37,515
|
$
35,000
|
$
(19,669)
|
$
109,678
|
DGD Adjusted EBITDA
(Darling's Share)
|
$
-
|
$
-
|
$
276,146
|
$
-
|
$
276,146
|
Adjusted
EBITDA
|
$
56,832
|
$
37,515
|
$
311,146
|
$
(19,669)
|
$
385,824
|
|
|
|
|
|
|
Three Months Ended
December 29, 2018
|
Feed
Ingredients
|
Food
Ingredients
|
Fuel
Ingredients
|
Corporate
|
Total
|
|
|
|
|
|
|
Net Sales
|
$
485,190
|
$
291,669
|
$
76,271
|
$
-
|
$
853,130
|
Cost of sales and
operating expenses
|
374,777
|
233,179
|
59,689
|
-
|
667,645
|
Gross
Margin
|
$
110,413
|
$
58,490
|
$
16,582
|
$
-
|
$
185,485
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
44,808
|
23,652
|
(714)
|
8,611
|
76,357
|
Loss(Gain) on
sale of assets
|
199
|
(38)
|
76
|
0
|
237
|
Depreciation and
amortization
|
53,359
|
20,263
|
8,603
|
3,052
|
85,277
|
Equity in net income
of Diamond Green Diesel
|
-
|
-
|
50,124
|
-
|
50,124
|
Segment Operating
Income
|
$
12,047
|
$
14,613
|
$
58,741
|
$ (11,663)
|
$
73,738
|
Equity in Net Income
of Unconsolidated Subsidiaries
|
$
(493)
|
$
-
|
$
-
|
$
-
|
$
(493)
|
Segment
Income
|
$
11,554
|
$
14,613
|
$
58,741
|
$ (11,663)
|
$
73,245
|
|
|
|
|
|
|
Segment
EBITDA
|
$
65,406
|
$
34,876
|
$
17,220
|
$
(8,611)
|
$
108,891
|
DGD Adjusted EBITDA
(Darling's Share)
|
$
-
|
$
-
|
$
55,268
|
$
-
|
$
55,268
|
Adjusted
EBITDA
|
$
65,406
|
$
34,876
|
$
72,488
|
$
(8,611)
|
$
164,159
|
|
|
|
|
|
|
Twelve Months
Ended December 28, 2019
|
Feed
Ingredients
|
Food
Ingredients
|
Fuel
Ingredients
|
Corporate
|
Total
|
|
|
|
|
|
|
Net Sales
|
$
1,970,561
|
$
1,119,085
|
$
274,259
|
$
-
|
$
3,363,905
|
Cost of sales and
operating expenses
|
1,519,596
|
864,618
|
204,871
|
-
|
2,589,085
|
Gross
Margin
|
$
450,965
|
$
254,467
|
$
69,388
|
$
-
|
$
774,820
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
200,487
|
97,363
|
2,762
|
57,911
|
358,523
|
Loss/(Gain) on
sale of assets
|
(7,720)
|
(13,175)
|
313
|
-
|
(20,582)
|
Depreciation and
amortization
|
203,456
|
79,671
|
31,946
|
10,437
|
325,510
|
Equity in net income
of Diamond Green Diesel
|
-
|
-
|
364,452
|
-
|
364,452
|
Segment Operating
Income
|
$
54,742
|
$
90,608
|
$
398,819
|
$ (68,348)
|
$
475,821
|
Equity in Net Income
of Unconsolidated Subsidiaries
|
$
428
|
$
-
|
$
-
|
$
-
|
$
428
|
Segment
Income
|
$
55,170
|
$
90,608
|
$
398,819
|
$ (68,348)
|
$
476,249
|
|
|
|
|
|
|
Segment
EBITDA
|
$
258,198
|
$
170,279
|
$
66,313
|
$
(57,911)
|
$
436,879
|
DGD Adjusted EBITDA
(Darling's Share)
|
$
-
|
$
-
|
$
389,416
|
$
-
|
$
389,416
|
Adjusted
EBITDA
|
$
258,198
|
$
170,279
|
$
455,729
|
$
(57,911)
|
$
826,295
|
|
|
|
|
|
|
Twelve Months
Ended December 29, 2018
|
Feed
Ingredients
|
Food
Ingredients
|
Fuel
Ingredients
|
Corporate
|
Total
|
|
|
|
|
|
|
Net Sales
|
$
1,952,555
|
$
1,139,126
|
$
296,045
|
$
-
|
$
3,387,726
|
Cost of sales and
operating expenses
|
1,497,973
|
918,141
|
230,260
|
-
|
2,646,374
|
Gross
Margin
|
$
454,582
|
$
220,985
|
$
65,785
|
$
-
|
$
741,352
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
176,722
|
91,546
|
(4,770)
|
45,766
|
309,264
|
Loss/(Gain) on
sale of assets
|
725
|
(282)
|
266
|
-
|
709
|
Restructure
Cost
|
|
14,965
|
|
|
14,965
|
Depreciation and
amortization
|
194,292
|
80,988
|
34,981
|
10,931
|
321,192
|
Equity in net income
of Diamond Green Diesel
|
-
|
-
|
159,779
|
-
|
159,779
|
Segment Operating
Income
|
$
82,843
|
$
33,768
|
$
195,087
|
$ (56,697)
|
$
255,001
|
Equity in Net Income
of Unconsolidated Subsidiaries
|
$
(550)
|
$
-
|
$
-
|
$
-
|
$
(550)
|
Segment
Income
|
$
82,293
|
$
33,768
|
$
195,087
|
$ (56,697)
|
$
254,451
|
|
|
|
|
|
|
Segment
EBITDA
|
$
277,135
|
$
129,721
|
$
70,289
|
$
(45,766)
|
$
431,379
|
DGD Adjusted EBITDA
(Darling's Share)
|
$
-
|
$
-
|
$
174,013
|
$
-
|
174,013
|
Adjusted
EBITDA
|
$
277,135
|
$
129,721
|
$
244,302
|
$
(45,766)
|
$
605,392
|
Darling
Ingredients Inc. and Subsidiaries
|
Condensed
Consolidated Balance Sheets
|
December 28, 2019
and December 29, 2018
|
(in
thousands)
|
|
|
|
December
28,
|
|
December
29,
|
|
|
2019
|
|
2018
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
$
72,935
|
|
$
107,262
|
|
Restricted
cash
|
110
|
|
107
|
|
Accounts Receivable,
less allowance for bad debts of $8,802 at December 28, 2019
and $7,830 at December 29, 2018
|
406,338
|
|
385,737
|
|
Inventories
|
362,957
|
|
341,028
|
|
Prepaid
expenses
|
46,599
|
|
35,247
|
|
Income taxes
refundable
|
3,317
|
|
6,462
|
|
Other current
assets
|
25,032
|
|
22,099
|
|
Total current assets
|
917,288
|
|
897,942
|
Property, plant and
equipment, net
|
1,802,411
|
|
1,687,858
|
Intangible assets,
net
|
526,394
|
|
595,862
|
Goodwill
|
1,223,291
|
|
1,229,159
|
Investment in
unconsolidated subsidiaries
|
689,354
|
|
410,177
|
Operating lease
right-of-use assets
|
124,726
|
|
-
|
Other
assets
|
47,400
|
|
53,375
|
Deferred income
taxes
|
14,394
|
|
14,981
|
|
|
$
5,345,258
|
|
$
4,889,354
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
|
Current portion of
long-term debt
|
$
90,996
|
|
$
7,492
|
|
Accounts payable,
principally trade
|
239,252
|
|
219,479
|
|
Income taxes
payable
|
8,895
|
|
4,043
|
|
Current operating
lease liabilities
|
37,805
|
|
-
|
|
Accrued
expenses
|
311,391
|
|
309,484
|
|
Total current liabilities
|
688,339
|
|
540,498
|
Long-term debt, net
of current portion
|
1,558,429
|
|
1,666,940
|
Long-term operating
lease liabilties
|
91,424
|
|
-
|
Other noncurrent
liabilities
|
115,785
|
|
115,032
|
Deferred income
taxes
|
247,931
|
|
231,063
|
|
Total liabilities
|
2,701,908
|
|
2,553,533
|
Commitments and
contingencies
|
|
|
|
Total Darling's
stockholders' equity
|
2,565,819
|
|
2,273,048
|
Noncontrolling
interests
|
77,531
|
|
62,773
|
|
Total stockholders' equity
|
$
2,643,350
|
|
$
2,335,821
|
|
|
$
5,345,258
|
|
$
4,889,354
|
Darling
Ingredients Inc. and Subsidiaries
|
Consolidated
Operating Results
|
For the Periods
Ended December 28, 2019 and December 29, 2018
|
(in thousands, except
per share data)
|
|
|
|
(Fourth Quarter
Unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Fiscal Year
Ended
|
|
|
|
|
|
|
$ Change
|
|
|
|
|
|
|
$ Change
|
|
|
December
28,
|
|
December
29,
|
|
Favorable
|
|
|
December
28,
|
|
December
29,
|
|
Favorable
|
|
|
2019
|
|
2018
|
|
(Unfavorable)
|
|
|
2019
|
|
2018
|
|
(Unfavorable)
|
Net sales
|
$
859,428
|
|
$
853,130
|
|
$
6,298
|
|
|
$
3,363,905
|
|
$
3,387,726
|
|
$
(23,821)
|
Costs and
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales and
operating expenses
|
640,533
|
|
667,645
|
|
27,112
|
|
|
2,589,085
|
|
2,646,374
|
|
57,289
|
|
Loss (gain) on sale
of assets
|
263
|
|
237
|
|
(26)
|
|
|
(20,582)
|
|
709
|
|
21,291
|
|
Selling, general and
administrative expenses
|
108,954
|
|
76,357
|
|
(32,597)
|
|
|
358,523
|
|
309,264
|
|
(49,259)
|
|
Restructuring and
impairment charges
|
-
|
|
-
|
|
-
|
|
|
-
|
|
14,965
|
|
14,965
|
|
Depreciation and
amortization
|
86,453
|
|
85,277
|
|
(1,176)
|
|
|
325,510
|
|
321,192
|
|
(4,318)
|
Total costs and
expenses
|
836,203
|
|
829,516
|
|
(6,687)
|
|
|
3,252,536
|
|
3,292,504
|
|
39,968
|
|
Equity in net income
of Diamond Green Diesel
|
270,062
|
|
50,124
|
|
219,938
|
|
|
364,452
|
|
159,779
|
|
204,673
|
Operating
income
|
293,287
|
|
73,738
|
|
219,549
|
|
|
475,821
|
|
255,001
|
|
220,820
|
Other
expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
(18,586)
|
|
(20,209)
|
|
1,623
|
|
|
(78,674)
|
|
(86,429)
|
|
7,755
|
|
Debt extinguishment
costs
|
-
|
|
-
|
|
-
|
|
|
(12,126)
|
|
(23,509)
|
|
11,383
|
|
Foreign currency
gain/(loss)
|
(657)
|
|
651
|
|
(1,308)
|
|
|
(1,311)
|
|
(6,431)
|
|
5,120
|
|
Gain/(loss) on
disposal of subsidiaries
|
2,967
|
|
(45)
|
|
3,012
|
|
|
2,967
|
|
(12,545)
|
|
15,512
|
|
Other income
(expense), net
|
487
|
|
(3,459)
|
|
3,946
|
|
|
(6,671)
|
|
(7,562)
|
|
891
|
Total other
expense
|
(15,789)
|
|
(23,062)
|
|
7,273
|
|
|
(95,815)
|
|
(136,476)
|
|
40,661
|
Equity in net
income/(loss) of unconsolidated subsidiaries
|
1,515
|
|
(493)
|
|
2,008
|
|
|
428
|
|
(550)
|
|
978
|
Income before income
taxes
|
279,013
|
|
50,183
|
|
228,830
|
|
|
380,434
|
|
117,975
|
|
262,459
|
Income taxes
expense
|
35,567
|
|
8,039
|
|
(27,528)
|
|
|
59,467
|
|
12,031
|
|
(47,436)
|
Net income
|
243,446
|
|
42,144
|
|
201,302
|
|
|
320,967
|
|
105,944
|
|
215,023
|
Net income
attributable to noncontrolling interests
|
(837)
|
|
(1,496)
|
|
659
|
|
|
(8,367)
|
|
(4,448)
|
|
(3,919)
|
Net income
attributable to Darling
|
$
242,609
|
|
$
40,648
|
|
$
201,961
|
|
|
$
312,600
|
|
$
101,496
|
|
$
211,104
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic income per
share:
|
$
1.48
|
|
$
0.25
|
|
$
1.23
|
|
|
$
1.90
|
|
$
0.62
|
|
$
1.28
|
Diluted income per
share:
|
$
1.44
|
|
$
0.24
|
|
$
1.20
|
|
|
$
1.86
|
|
$
0.60
|
|
$
1.26
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of diluted
common shares:
|
168,152
|
|
168,379
|
|
|
|
|
168,378
|
|
167,910
|
|
|
Darling
Ingredients Inc. and Subsidiaries
|
Consolidated
Statement of Cash Flows
|
Fiscal Years Ended
December 28, 2019 and December 29, 2018
|
(in
thousands)
|
|
|
|
|
|
Fiscal Year
Ended
|
|
|
|
|
December
28,
|
|
December
29,
|
Cash flows from
operating activities:
|
2019
|
|
2018
|
|
Net income
|
$
320,967
|
|
$
105,944
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
Depreciation and
amortization
|
325,510
|
|
321,192
|
|
|
Deferred income
taxes
|
20,530
|
|
(16,974)
|
|
|
Loss/(gain) on sale
of assets
|
(20,582)
|
|
709
|
|
|
Loss/(gain) on
disposal of subsidiaries
|
(2,967)
|
|
12,545
|
|
|
Asset
impairment
|
-
|
|
2,907
|
|
|
Gain on insurance
proceeds from insurance settlement
|
(6,600)
|
|
(1,253)
|
|
|
Increase in long-term
pension liability
|
1,831
|
|
1,463
|
|
|
Stock-based
compensation expense
|
21,007
|
|
18,779
|
|
|
Debt extinguishment
costs
|
12,126
|
|
23,509
|
|
|
Write-off deferred
loan costs
|
270
|
|
320
|
|
|
Deferred loan cost
amortization
|
5,846
|
|
7,870
|
|
|
Equity in net income
of unconsolidated subsidiaries
|
(364,880)
|
|
(159,229)
|
|
|
Distribution of
earnings from unconsolidated subsidiaries
|
69,213
|
|
67,638
|
|
|
Changes in operating
assets and liabilities, net of effects from
acquisitions:
|
|
|
|
|
|
Accounts
receivable
|
(26,086)
|
|
(6,347)
|
|
|
Income taxes
refundable/payable
|
9,542
|
|
(9,809)
|
|
|
Inventories and prepaid
expenses
|
(39,111)
|
|
2,391
|
|
|
Accounts payable and accrued
expenses
|
32,436
|
|
14,534
|
|
|
Other
|
3,569
|
|
12,426
|
|
|
|
Net cash
provided by operating activities
|
362,621
|
|
398,615
|
Cash flows from
investing activities:
|
|
|
|
|
Capital
expenditures
|
(359,498)
|
|
(321,896)
|
|
Acquisitions, net of
cash acquired
|
(1,431)
|
|
(107,727)
|
|
Investment of
unconsolidated subsidiary
|
(2,000)
|
|
(12,250)
|
|
Proceeds from sale of
investment in subsidiaries
|
3,671
|
|
82,760
|
|
Gross proceeds from
disposal of property, plant and equipment and other
assets
|
18,235
|
|
19,328
|
|
Proceeds from
insurance settlement
|
6,600
|
|
1,253
|
|
Payments related to
routes and other intangibles
|
(3,651)
|
|
(3,883)
|
|
|
|
Net cash used
by investing activities
|
(338,074)
|
|
(342,415)
|
Cash flows from
financing activities:
|
|
|
|
|
Proceeds from
long-term debt
|
517,606
|
|
624,620
|
|
Payments on long-term
debt
|
(581,163)
|
|
(686,628)
|
|
Borrowings from
revolving credit facility
|
469,227
|
|
543,898
|
|
Payments on revolving
credit facility
|
(461,669)
|
|
(510,974)
|
|
Net cash overdraft
financing
|
38,367
|
|
3,460
|
|
Deferred loan
costs
|
(7,027)
|
|
(9,668)
|
|
Issuance of common
stock
|
39
|
|
182
|
|
Repurchase of common
stock
|
(19,260)
|
|
-
|
|
Minimum withholding
taxes paid on stock awards
|
(4,472)
|
|
(2,215)
|
|
Distributions to
noncontrolling interests
|
(6,533)
|
|
(10,257)
|
|
|
|
Net cash used
in financing activities
|
(54,885)
|
|
(47,582)
|
Effect of exchange
rate changes on cash flows
|
(3,986)
|
|
(8,165)
|
Net
increase/(decrease) in cash, cash equivalents and restricted
cash
|
(34,324)
|
|
453
|
Cash, cash
equivalents and restricted cash at beginning of year
|
107,369
|
|
106,916
|
Cash, cash
equivalents and restricted cash at end of year
|
$
73,045
|
|
$
107,369
|
Supplemental
disclosure of cash flow information:
|
|
|
|
|
Accrued capital
expenditures
|
$
6,487
|
|
$
5,951
|
|
Cash paid during the
period for:
|
|
|
|
|
|
Interest, net of
capitalized interest
|
$
79,132
|
|
$
75,006
|
|
|
Income taxes, net of
refunds
|
$
29,778
|
|
$
33,162
|
|
Non-cash operating
activities:
|
|
|
|
|
|
Operating lease right
of use obtained in exchange for new lease liabilities
|
$
40,596
|
|
$
-
|
|
Non-cash financing
activities:
|
|
|
|
|
|
Debt issued for
service contract assets
|
$
25
|
|
$
22
|
Diamond Green
Diesel Joint Venture
|
Condensed
Consolidated Balance Sheets
|
December 31, 2019
and December 31, 2018
|
(in
thousands)
|
|
|
|
|
|
December
31,
|
|
December
31,
|
|
|
|
|
2019
|
|
2018
|
Assets:
|
|
|
|
|
|
Total current
assets
|
|
$
668,026
|
|
$
186,258
|
|
Property, plant and
equipment, net
|
|
713,489
|
|
576,384
|
|
Other
assets
|
|
30,710
|
|
24,601
|
|
|
Total
assets
|
|
$
1,412,225
|
|
$
787,243
|
|
|
|
|
|
|
|
Liabilities and
members' equity:
|
|
|
|
|
|
Total current portion
of long term debt
|
|
$
341
|
|
$
189
|
|
Total other current
liabilities
|
|
75,802
|
|
40,619
|
|
Total long term
debt
|
|
8,742
|
|
8,485
|
|
Total other long term
liabilities
|
|
4,422
|
|
539
|
|
Total members'
equity
|
|
1,322,918
|
|
737,411
|
|
|
Total liabilities and
members' equity
|
|
$
1,412,225
|
|
$
787,243
|
Diamond Green
Diesel Joint Venture
|
Operating
Financial Results
|
Three Months and
Fiscal Year Ended December 31, 2019 and December 31,
2018
|
(in
thousands)
|
|
|
|
|
(Fourth Quarter
Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Twelve Months
Ended
|
|
|
|
|
|
|
|
$ Change
|
|
|
|
|
|
|
$ Change
|
|
|
|
December
31,
|
|
December
31,
|
|
Favorable
|
|
|
December
31,
|
|
December
31,
|
|
Favorable
|
Revenues:
|
2019
|
|
2018
|
|
(Unfavorable)
|
|
|
2019
|
|
2018
|
|
(Unfavorable)
|
|
Operating
revenues
|
$
357,857
|
|
$
270,542
|
|
$
87,315
|
|
|
$
1,217,504
|
|
$
677,663
|
|
$
539,841
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total costs and
expenses less depreciation, amortization and accretion
expense
|
236,149
|
|
160,004
|
|
(76,145)
|
|
|
869,258
|
|
490,030
|
|
(379,228)
|
|
Depreciation,
amortization and accretion expense
|
12,193
|
|
10,544
|
|
(1,649)
|
|
|
50,767
|
|
29,434
|
|
(21,333)
|
|
Blenders tax
credit
|
(430,586)
|
|
-
|
|
430,586
|
|
|
(430,586)
|
|
(160,394)
|
|
270,192
|
Total costs and
expenses
|
(182,244)
|
|
170,548
|
|
352,792
|
|
|
489,439
|
|
359,070
|
|
(130,369)
|
|
Operating
income
|
540,101
|
|
99,994
|
|
440,107
|
|
|
728,065
|
|
318,593
|
|
409,472
|
Other
income
|
340
|
|
571
|
|
(231)
|
|
|
2,121
|
|
1,919
|
|
202
|
|
|
Interest and debt
expense, net
|
(317)
|
|
(318)
|
|
1
|
|
|
(1,282)
|
|
(955)
|
|
(327)
|
|
|
Net
income
|
$
540,124
|
|
$
100,247
|
|
$
439,877
|
|
|
$
728,904
|
|
$
319,557
|
|
$
409,347
|
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
Three and
twelve months ended December 28, 2019
and December 29, 2018
|
|
(unaudited)
|
|
|
|
|
|
|
Three Months
Ended
|
|
Fiscal Year
Ended
|
Adjusted
EBITDA
|
December
28,
|
|
December
29,
|
|
December
28,
|
|
December
29,
|
(U.S. dollars in
thousands)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
|
|
Net income
attributable to Darling
|
$
242,609
|
|
$
40,648
|
|
$
312,600
|
|
$
101,496
|
Depreciation and
amortization
|
86,453
|
|
85,277
|
|
325,510
|
|
321,192
|
Interest
expense
|
18,586
|
|
20,209
|
|
78,674
|
|
86,429
|
Income tax
expense/(benefit)
|
35,567
|
|
8,039
|
|
59,467
|
|
12,031
|
Restructuring and
impairment charges
|
-
|
|
-
|
|
-
|
|
14,965
|
Foreign currency
loss/(gain)
|
657
|
|
(651)
|
|
1,311
|
|
6,431
|
Other income
(expense), net
|
(487)
|
|
3,459
|
|
6,671
|
|
7,562
|
Debt extinguishment
costs
|
-
|
|
-
|
|
12,126
|
|
23,509
|
Loss/(gain) on
disposal of subsidiaries
|
(2,967)
|
|
45
|
|
(2,967)
|
|
12,545
|
Equity in net
(income)/loss of Diamond Green Diesel
|
(270,062)
|
|
(50,124)
|
|
(364,452)
|
|
(159,779)
|
Equity in net income
of unconsolidated subsidiaries
|
(1,515)
|
|
493
|
|
(428)
|
|
550
|
Net income
attributable to noncontrolling interests
|
837
|
|
1,496
|
|
8,367
|
|
4,448
|
|
Adjusted EBITDA
(Non-GAAP)
|
$
109,678
|
|
$
108,891
|
|
$
436,879
|
|
$
431,379
|
Foreign currency
exchange impact
|
2,149
|
(1)
|
-
|
|
16,898
|
(1)
|
-
|
|
Pro forma
Adjusted EBITDA to Foreign Currency (Non-GAAP)
|
$
111,827
|
|
$
108,891
|
|
$
453,777
|
|
$
431,379
|
DGD Joint Venture
Adjusted EBITDA (Darling's Share)
|
$
276,146
|
|
$
55,268
|
|
$
389,416
|
|
$
174,013
|
|
|
|
|
|
|
|
|
|
Darling plus
Darling's share of DGD Joint Venture Adjusted
EBITDA
|
$
385,824
|
|
$
164,159
|
|
$
826,295
|
|
$
605,392
|
|
(1) The average
rate assumption used in this calculation was the actual fiscal
average rate for the three months ended December 28, 2019 of
€1.00:USD$1.11 and CAD$1.00:USD$0.76 as compared to the average rate for the
three months ended December 29, 2018 of €1.00:USD$1.14 and
CAD$1.00:USD$0.76, respectively.
|
The average rate
assumption used in this calculation was the actual fiscal average
rate for the fiscal year ended December 28, 2019 of €1.00:USD$1.12
and CAD$1.00:USD$0.75 as compared to the average rate for the
fiscal year ended December 29, 2018 of €1.00:USD$1.18 and
CAD$1.00:USD$0.77, respectively.
|
About Darling
Darling Ingredients Inc. is a global developer and producer of
sustainable natural ingredients from edible and inedible
bio-nutrients, creating a wide range of ingredients and specialty
solutions for customers in the pharmaceutical, food, pet food,
feed, technical, fuel, bioenergy, and fertilizer industries.
With operations on five continents, the Company collects and
transforms all aspects of animal by-product streams into useable
and specialty ingredients, such as collagen, edible fats,
feed-grade fats, animal proteins and meals, plasma, pet food
ingredients, organic fertilizers, yellow grease, fuel feedstocks,
green energy, natural casings and hides. The Company also
recovers and converts recycled oils (used cooking oil and animal
fats) into valuable feed and fuel ingredients and collects and
processes residual bakery products into feed ingredients. In
addition, the Company provides environmental services, such as
grease trap collection and disposal services to food service
establishments. The Company sells its products domestically and
internationally and operates within three industry segments: Feed
Ingredients, Food Ingredients and Fuel Ingredients. For additional
information, visit the Company's website at
http://www.darlingii.com.
Darling Ingredients Inc. will host a conference call to discuss
the Company's fourth quarter and fiscal year end 2019 financial
results at 8:30 am Eastern Time
(7:30 am Central Time) on
Wednesday, February 26, 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 10139036.
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 March 4, 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 10139036.
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 expenses, 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 and 5.25% Notes and 3.625% Notes that were outstanding
at December 28, 2019. However, the
amounts shown in this presentation for Adjusted EBITDA differ from
the amounts calculated under similarly titled definitions in the
Company's Senior Secured Credit Facilities and 5.25% Notes and
3.625% Notes, as those definitions permit further adjustments to
reflect certain other non-recurring costs, non-cash charges and
cash dividends from the DGD Joint Venture. Additionally, the
Company evaluates the impact of foreign exchange impact on
operating cash flow, which is defined as segment operating income
(loss) plus depreciation and amortization.
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 Unites 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"), 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; escalation in the
outbreak of the coronavirus; 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, 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, including our ongoing enterprise
resource planning project; 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 likely 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 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
|
View original content to download
multimedia:http://www.prnewswire.com/news-releases/darling-ingredients-inc-reports-fourth-quarter-and-fiscal-2019-financial-results-301011074.html
SOURCE Darling Ingredients Inc.