Melissa A. Gaither, Vice President Investor Relations and Global Communications, Phone: 972-281-4478; email@example.com
There has never been an IPO. In August of 1994, the Company became public by registering stock received by the Company’s previous bondholders in a stock for debt restructuring completed December 1993.
The Company has a 52/53 week fiscal year ending on the Saturday nearest December 31.
Darling does not currently pay a cash dividend.
The process starts with the collection of animal processing by-products (including fat, bones, feathers, offal and other animal by-products).The animal processing by-products are ground and heated to extract water and separate oils and grease from animal tissue as well as to sterilize and make the material suitable as an ingredient for animal feed. The separated oils, tallows, and greases are then centrifuged and /or refined for purity. The remaining solid product is pressed to remove additional oils to create meals. The meal is then sifted through screens and ground further if necessary to produce an appropriately sized protein meal.
Darling has two primary pricing arrangements – formula and non-formula—with its suppliers of poultry, beef, pork, bakery residuals and used cooking oil. Additional information on these pricing arrangements can be found in the Company’s filings with the Securities and Exchange Commission (SEC). “Formula” generally means the material is procured in a way that creates a fixed dollar margin for Darling and therefore is not sensitive to commodity price movements.
The Company competes with other rendering, restaurant services, and bakery by-product businesses, as well as alternative methods of disposal of animal processing by-products and used restaurant cooking oil such as those provided by trash haulers, waste management companies and bio-diesel companies, as well as the alternative of illegal disposal.
The quantity of raw materials available to the Company is impacted by seasonal factors, including holidays, when raw material volumes decline, and cold weather, which can impact the collection of raw material. In addition, warm weather can adversely affect the quality of raw material processed and the Company’s yield on production due to more rapidly degrading raw materials.
Even though in most states it is illegal to steal inedible grease, and unlawful to transport inedible grease without a license, increased prices for biofuel feed stocks have led to an increase in thefts of recycling equipment and spent cooking oil and grease.
Many of the Company’s markets for restaurant services do indeed use the site where rendering occurs, but it is through a separate processing system. Although different vehicles with different frequencies are used for each business line, shared personnel and wastewater permits create efficiencies.
Renewable Identification Numbers (RINs) are used to track and demonstrate compliance with Renewable Fuel Standards (RFS) mandates. A RIN is a 38-digit serial number that is assigned by renewable fuel producers and importers to each gallon/batch of renewable fuel. A RIN encompasses several pieces of information, including company registration ID, Facility registration ID, year of production, batch serial number, batch volume, equivalence value, and renewable type code. A RIN specifies or remains attached to a particular renewable fuel until it is blended into motor vehicle fuel. Subsequently, the RIN can be used to meet compliance, held for future compliance, or sold. Not all fuels are created equally; the RIN values are assigned to qualifying renewable fuels based on energy content. For instance, a gallon of corn ethanol is treated as the base, which has a RIN value of 1.0 on a per-gallon basis. Biodiesel has a RIN value of 1.5 and renewable diesel has a RIN value of 1.7 on a per gallon basis.