Darling Ingredients Inc. Reports Third Quarter 2021 Financial Results

IRVING, Texas, Nov. 9, 2021 /PRNewswire/ -- Darling Ingredients Inc. (NYSE: DAR, "Darling") --

Third Quarter 2021

  • Net income of $146.8 million, or $0.88 per GAAP diluted share
  • Net Sales of $1.2 billion
  • Combined adjusted EBITDA of $289.6 million
  • Global Ingredients business reported Q3 EBITDA of $229.6 million
  • Renewable diesel JV, Diamond Green Diesel (DGD) contributed $60.0 million of EBITDA to Darling
  • Darling repurchased approximately $22 million of common stock in the third quarter

Darling reported net sales of $1.2 billion for the third quarter of 2021, as compared with net sales of $851 million for the same period a year ago.  Net income attributable to Darling for the three months ended October 2, 2021 was $146.8 million, or $0.88 per diluted share, compared to net income of $101.1 million, or $0.61 per diluted share, for the third quarter of 2020.

"We produced another strong quarterly earnings in our global ingredients business, reporting adjusted EBITDA of approximately $230 million for the third quarter," said Randall C. Stuewe, Chairman and Chief Executive Officer of Darling Ingredients Inc. "Demand for protein products and low carbon feedstocks around the world continue to provide positive tailwinds for our global platform, enabling us to deliver what we expect to be our best annual financial results in Darling Ingredients' history and in line with our previous guidance of combined adjusted EBITDA of $1.275 billion for the year."

"DGD's Norco, Louisiana expansion project was completed ahead of schedule and continues to ramp up and should reach our expected operating capacity within the next week," stated Mr. Stuewe. "Our Port Arthur DGD III project continues to make exceptional progress on construction and remains on target for completion in the first half of 2023."

Under Darling's current share repurchase authorization, the Company repurchased 319,330 shares of common stock during the third quarter for a total of $22.3 million. Darling has approximately $102 million remaining under its current authorization which was extended to August 13, 2022. For the first nine months of 2021, the Company has repurchased approximately $98 million of common stock.

For the nine months ended October 2, 2021, Darling reported net sales of $3.4 billion, as compared with net sales of $2.6 billion for the same period of 2020. Net Income attributable to Darling for the first nine months of 2021 was $495.2 million, or $2.96 per diluted share, as compared to a net income of $252.1 million, or $1.51 per diluted share, for the first nine months of 2020.

As of October 2, 2021, Darling had $67.4 million in cash and cash equivalents, and $912.6 million available under its committed revolving credit agreement. Total debt outstanding as of October 2, 2021 was $1.38 billion. Capital expenditures (exclusive of DGD investments) of $191.7 million were made during the first nine months of fiscal 2021, compared to $184.9 million in the first nine months of fiscal 2020.

Combined adjusted EBITDA was $289.6 million for the third quarter of 2021, compared to $218.5 million for the same period in 2020. On a year-to-date basis, combined adjusted EBITDA totaled $928.1 million for 2021, compared to $627.0 million on a year-to-date basis for 2020.

 

Segment Financial Tables (in thousands)

(unaudited)


Three Months Ended October 2, 2021

Feed
Ingredients

Food
Ingredients

Fuel
Ingredients

Corporate

Total







Net Sales

$           769,626

$           311,856

$           104,434

$                   -

$         1,185,916

Cost of sales and operating expenses

553,662

241,308

64,634

-

859,604

Gross Margin

$           215,964

$             70,548

$             39,800

$                   -

$            326,312







Gain on sale of assets

(229)

(8)

(264)

-

(501)

Selling, general and administrative expenses

54,997

24,417

4,481

13,380

97,275

Depreciation and amortization

53,824

14,933

6,361

2,708

77,826

Equity in net income of Diamond Green Diesel

-

-

53,951

-

53,951

Segment operating income/(loss)

$           107,372

$             31,206

$             83,173

$        (16,088)

$            205,663

Equity in net income of other unconsolidated subsidiaries

$               1,647

$                       -

$                       -

$                   -

$                1,647

Segment Income/(loss)

$           109,019

$             31,206

$             83,173

$        (16,088)

$            207,310







Segment EBITDA

$           161,196

$             46,139

$             35,583

$        (13,380)

$            229,538

DGD adjusted EBITDA (Darling's Share)

$                       -

$                       -

$             60,026

$                   -

$              60,026

Combined adjusted EBITDA

$           161,196

$             46,139

$             95,609

$        (13,380)

$            289,564







Three Months Ended September 26, 2020

Feed
Ingredients

Food
Ingredients

Fuel
Ingredients

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 other 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













 

 

Segment Financial Tables (in thousands) continued

(unaudited)


Nine Months Ended October 2, 2021

Feed
Ingredients

Food
Ingredients

Fuel
Ingredients

Corporate

Total







Net Sales

$       2,193,002

$            926,952

$           311,347

$                   -

$         3,431,301

Cost of sales and operating expenses

1,584,667

706,260

219,534

-

2,510,461

Gross Margin

$          608,335

$            220,692

$             91,813

$                   -

$            920,840







Gain on sale of assets

(490)

(1)

(302)

-

(793)

Selling, general and administrative expenses

162,594

75,150

13,822

42,239

293,805

Restructuring and asset impairment charges

-

-

778

-

778

Depreciation and amortization

162,404

45,666

19,214

8,298

235,582

Equity in net income of Diamond Green Diesel

-

-

281,964

-

281,964

Segment operating income/(loss)

$           283,827

$              99,877

$           340,265

$        (50,537)

$            673,432

Equity in net income of other unconsolidated subsidiaries

$               4,199

$                        -

$                       -

$                   -

$                4,199

Segment income/(loss)

$           288,026

$              99,877

$           340,265

$        (50,537)

$            677,631







Segment EBITDA

$           446,231

$            145,543

$             78,293

$        (42,239)

$            627,828

DGD adjusted EBITDA (Darling's Share)

$                       -

$                        -

$           300,227

$                   -

$            300,227

Combined adjusted EBITDA

$           446,231

$            145,543

$           378,520

$        (42,239)

$            928,055







Nine Months Ended September 26, 2020

Feed
Ingredients

Food
Ingredients

Fuel
Ingredients

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 other 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

 

           

Darling Ingredients Inc. and Subsidiaries

Consolidated Balance Sheets

October 2, 2021 and January 2, 2021

  (in thousands)




October 2,


January 2,



2021


2021

ASSETS

(unaudited)



Current assets:





Cash and cash equivalents

$                  67,188


$                  81,617


Restricted cash

172


103


Accounts receivable, net

479,575


405,387


Inventories

476,295


405,922


Prepaid expenses

63,633


47,793


Income taxes refundable

3,060


3,883


Other current assets

13,721


42,289


              Total current assets

1,103,644


986,994

Property, plant and equipment, net

1,834,670


1,863,814

Intangible assets, net

417,409


473,680

Goodwill

1,232,179


1,260,240

Investment in unconsolidated subsidiaries

1,107,834


804,682

Operating lease right-of-use assets

160,660


146,563

Other assets

53,887


60,682

Deferred income taxes

15,437


16,676



$             5,925,720


$             5,613,331

LIABILITIES AND STOCKHOLDERS' EQUITY




Current liabilities:





Current portion of long-term debt

$                  55,138


$                  27,538


Accounts payable, principally trade

272,844


255,340


Income taxes payable

34,623


17,497


Current operating lease liabilities

40,182


39,459


Accrued expenses

353,410


335,471


              Total current liabilities

756,197


675,305

Long-term debt, net of current portion

1,325,736


1,480,531

Long-term operating lease liabilities

123,169


109,707

Other noncurrent liabilities

115,815


117,371

Deferred income taxes

335,566


276,208


              Total liabilities

2,656,483


2,659,122

Commitments and contingencies




Total Darling's stockholders' equity

3,205,524


2,891,909

Noncontrolling interests

63,713


62,300


              Total stockholders' equity

3,269,237


2,954,209



$             5,925,720


$             5,613,331

 

 

Darling Ingredients Inc. and Subsidiaries

Consolidated Operating Results

For the Three-Month and Nine-Month Periods Ended October 2, 2021 and September 26, 2020

(in thousands, except per share data)        




Three Months Ended




Nine Months Ended



(unaudited)


$ Change




(unaudited)


$ Change



October 2,


September 26,


Favorable




October 2,


September 26,


Favorable



2021


2020


(Unfavorable)




2021


2020


(Unfavorable)

Net sales

$       1,185,916


$          850,569


$           335,347




$      3,431,301


$       2,552,084


$           879,217

Costs and expenses:















Cost of sales and operating expenses

859,604


638,368


(221,236)




2,510,461


1,917,623


(592,838)


Loss (gain) on sale of assets

(501)


122


623




(793)


210


1,003


Selling, general and administrative expenses

97,275


89,993


(7,282)




293,805


276,379


(17,426)


Restructuring and asset impairment charges

-


-


-




778


-


(778)


Depreciation and amortization

77,826


85,730


7,904




235,582


253,711


18,129

Total costs and expenses

1,034,204


814,213


(219,991)




3,039,833


2,447,923


(591,910)


Equity in net income of Diamond Green Diesel

53,951


91,099


(37,148)




281,964


252,411


29,553

Operating income

205,663


127,455


78,208




673,432


356,572


316,860

Other expense:















Interest expense

(15,409)


(18,793)


3,384




(47,105)


(55,803)


8,698


Foreign currency loss

(205)


(1,239)


1,034




(1,299)


(709)


(590)


Other expense, net

(853)


(1,912)


1,059




(3,210)


(5,278)


2,068

Total other expense

(16,467)


(21,944)


5,477




(51,614)


(61,790)


10,176

Equity in net income














    of other unconsolidated subsidiaries

1,647


906


741




4,199


2,467


1,732

Income before income taxes

190,843


106,417


84,426




626,017


297,249


328,768

Income tax expense

42,637


4,812


(37,825)




126,324


43,058


(83,266)

Net income

148,206


101,605


46,601




499,693


254,191


245,502

Net income attributable to















noncontrolling interests

(1,394)


(480)


(914)




(4,533)


(2,117)


(2,416)

Net income attributable to Darling

$          146,812


$          101,125


$             45,687




$         495,160


$           252,074


$           243,086
















Basic income per share:

$                0.91


$                0.62


$                 0.29




$                3.04


$                 1.55


$                 1.49

Diluted income per share:

$                0.88


$                0.61


$                 0.27




$                2.97


$                 1.51


$                 1.46
















Number of diluted common shares:

166,770


166,997






167,374


166,974



 

 

Darling Ingredients Inc. and Subsidiaries

     Consolidated Statement of Cash Flows

Periods Ended October 2, 2021 and September 26, 2020

(in thousands)

(unaudited)     






Nine Months Ended





October 2,


September 26,

Cash flows from operating activities:

2021


2020


Net income


$  499,693


$    254,191


Adjustments to reconcile net income to net cash provided by operating activities:






Depreciation and amortization

235,582


253,711



Loss/(gain) on disposal of property, plant and equipment and other assets

(793)


210



Asset impairment


138


-



Deferred taxes


67,272


13,362



Decrease in long-term pension liability

(1,118)


(7,960)



Stock-based compensation expense

18,413


19,202



Write-off deferred loan costs

1,130


2,419



Deferred loan cost amortization

3,044


4,242



Equity in net income of Diamond Green Diesel and other unconsolidated subsidiaries

(286,163)


(254,878)



Distributions of earnings from Diamond Green Diesel and other unconsolidated subsidiaries

3,322


207,165



Changes in operating assets and liabilities, net of effects from acquisitions:






     Accounts receivable

(85,822)


36,083



     Income taxes refundable/payable

18,688


8,282



     Inventories and prepaid expenses

(97,531)


(43,980)



     Accounts payable and accrued expenses

46,912


(10,832)



     Other


29,282


(10,804)




Net cash provided by operating activities

452,049


470,413

Cash flows from investing activities:





Capital expenditures


(191,738)


(184,919)


Acquisitions, net of cash acquired

(2,059)


-


Investment in Diamond Green Diesel

(25,000)


-


Investment in other unconsolidated subsidiaries

(4,449)


-


Gross proceeds from disposal of property, plant and equipment and other assets

3,805


1,291


Payments related to routes and other intangibles

(274)


(3,712)




Net cash used by investing activities

(219,715)


(187,340)

Cash flows from financing activities:





Proceeds from long-term debt

31,088


24,085


Payments on long-term debt

(131,224)


(171,640)


Borrowings from revolving credit facility

287,000


390,971


Payments on revolving credit facility

(309,000)


(415,800)


Net cash overdraft financing

29,034


(33,385)


Deferred loan costs


-


(3,688)


Issuance of common stock

50


67


Repurchase of common stock

(97,924)


(55,044)


Minimum withholding taxes paid on stock awards

(45,260)


(7,980)


Acquisition of noncontrolling interest

-


(8,784)


Distributions to noncontrolling interests

(3,853)


(6,253)




Net cash used by financing activities

(240,089)


(287,451)

Effect of exchange rate changes on cash flows

(6,605)


(2,712)

Net decrease in cash, cash equivalents and restricted cash

(14,360)


(7,090)

Cash, cash equivalents and restricted cash at beginning of period

81,720


73,045

Cash, cash equivalents and restricted cash at end of period

$    67,360


$      65,955

Supplemental disclosure of cash flow information:





Accrued capital expenditures

$      3,008


$       (2,202)


Cash paid during the period for:






Interest, net of capitalized interest

$    32,430


$      39,481



Income taxes, net of refunds

$    36,709


$      24,868


Non-cash operating activities:






Operating lease right of use asset obtained in exchange for new lease liabilities

$    50,883


$      44,479


Non-cash financing activities:






Debt issued for service contract assets

$            66


$              21

 

 

Diamond Green Diesel Joint Venture

Condensed Consolidated Balance Sheets

September 30, 2021 and December 31, 2020

(in thousands)






September 30,


December  31,





2021


2020

Assets:



 (unaudited) 




Total current assets


$           365,354


$          383,557


Property, plant and equipment, net


2,192,808


1,238,726


Other assets


44,657


36,082



Total assets


$        2,602,819


$       1,658,365








Liabilities and members' equity:






Total current portion of long term debt


$           106,423


$                  517


Total other current liabilities


228,657


99,787


Total long term debt


108,952


8,705


Total other long term liabilities


17,048


3,758


Total members' equity


2,141,739


1,545,598



Total liabilities and members' equity


$        2,602,819


$       1,658,365

 

 

Diamond Green Diesel Joint Venture

Operating Financial Results

For the Three-Month and Nine-Month Periods Ended September 30, 2021 and September 30, 2020

(in thousands)





Three Months Ended




Nine Months Ended




(unaudited)


$ Change




(unaudited)


$ Change




September 30,


September 30,


Favorable




September 30,


September 30,


Favorable

Revenues:

2021


2020


(Unfavorable)




2021


2020


(Unfavorable)


Operating revenues

$           401,900


$           346,276


$               55,624




$        1,405,392


$        1,000,717


$           404,675

Expenses:















Total costs and expenses less
















depreciation, amortization and
accretion expense

281,848


153,406


(128,442)




804,939


462,364


(342,575)


Depreciation, amortization and

10,991


10,772


(219)




34,673


33,660


(1,013)



accretion expense














Total costs and expenses

292,839


164,178


(128,661)




839,612


496,024


(343,588)


Operating income 

109,061


182,098


(73,037)




565,780


504,693


61,087

Other income

113


415


(302)




524


1,076


(552)



Interest and debt expense, net

(1,272)


(315)


(957)




(2,376)


(947)


(1,429)



Net income 

$           107,902


$           182,198


$              (74,296)




$           563,928


$           504,822


$             59,106

 

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 October 2, 2021 and September 26, 2020




Three Months Ended



Nine Months Ended 

Adjusted EBITDA 

October 2,


September 26,



October 2,


September 26,

(U.S. dollars in thousands)

2021


2020



2021


2020











Net income attributable to Darling

$        146,812


$             101,125



$        495,160


$             252,074

Depreciation and amortization

77,826


85,730



235,582


253,711

Interest expense

15,409


18,793



47,105


55,803

Income tax expense

42,637


4,812



126,324


43,058

Restructuring and asset impairment charges

-


-



778


-

Foreign currency loss

205


1,239



1,299


709

Other expense, net

853


1,912



3,210


5,278

Equity in net income of Diamond Green Diesel

(53,951)


(91,099)



(281,964)


(252,411)

Equity in net income of other unconsolidated subsidiaries

(1,647)


(906)



(4,199)


(2,467)

Net income attributable to noncontrolling interests

1,394


480



4,533


2,117


Adjusted EBITDA (Non-GAAP)

$        229,538


$        122,086



$        627,828


$        357,872

Foreign currency exchange impact 

(2,249)

(1)

-



(21,791)

(2)

-


 Pro forma Adjusted EBITDA to Foreign Currency (Non-GAAP)

$        227,289


$        122,086



$        606,037


$        357,872

DGD Joint Venture Adjusted EBITDA (Darling's Share)

$          60,026


$          96,435



$        300,227


$        269,177











Darling plus Darling's share of DGD Joint Venture Adjusted EBITDA 

$        289,564


$        218,521



$        928,055


$        627,049











(1) The average rate assumption used in this calculation was the actual fiscal average rate for the three months ended

October 2, 2021 of €1.00:USD$1.18 and CAD$1.00:USD$0.79, as compared to the average rate for the three months ended

September 26, 2020 of  €1.00:USD$1.17 and CAD$1.00:USD$0.75, respectively.

(2) The average rate assumption used in this calculation was the actual fiscal average rate for the nine months ended

October 2, 2021 of €1.00:USD$1.20 and CAD$1.00:USD$0.80, as compared to the average rate for the nine months ended

September 26, 2020 of  €1.00:USD$1.12 and CAD$1.00:USD$0.74, respectively.


 

About Darling

Darling Ingredients Inc. (NYSE: DAR) is a world leading producer of organic ingredients, generating 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. Darling Ingredients named one of the 50 Sustainability and Climate Leaders in 2021, to learn more Darling Ingredients: The greenest Company on the planet - 50 Sustainability & Climate Leaders (50climateleaders.com). The Company sells its ingredients 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 50% joint venture partner in Diamond Green Diesel (DGD), North America's largest renewable diesel manufacturer, which products reduce Greenhouse Gas (GHG) emissions by up to 85% compared to fossil fuels. 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 third quarter 2021 financial results at 9:00 am Eastern Time (8:00 am Central Time) on Wednesday, November 10, 2021.  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 10161773. 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 17, 2021, 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 10161773.  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.

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).

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, 5.25% Notes and 3.625% Notes that were outstanding at October 2, 2021. 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, 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.

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 income and statement of cash flow, 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 a range 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.

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," "combined adjusted EBITDA guidance" 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 projects; 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

 

 

SOURCE Darling Ingredients Inc.