Fourth Quarter 2021
Darling Ingredients Inc. Delivers Strong Fourth Quarter and Fiscal Year 2021 Financial Results; Carries Momentum into 2022
Fourth Quarter 2021
- Net income of $155.8 million, or $0.94 per GAAP diluted share
- Net Sales of $1.3 billion
- Combined adjusted EBITDA of $306.8 million
- Global ingredients business EBITDA of $223.6 million
Fiscal Year 2021
- Net income of $650.9 million, or $3.90 per GAAP diluted share
- Net sales of $4.7 billion
- Combined adjusted EBITDA of $1.235 billion
- Global ingredients business record EBITDA of $851.4 million

IRVING, TexasFeb. 28, 2022 /PRNewswire/ -- Darling Ingredients Inc. (NYSE: DAR) today reported net income of $155.8 million, or $0.94 per diluted share for fourth quarter 2021, compared to net income of $44.7 million, or $0.27 per diluted share, for fourth quarter 2020. The company also reported net sales of $1.3 billion for the fourth quarter of 2021, as compared with net sales of $1.0 billion for the same period a year ago. 

Darling Ingredients Inc. (PRNewsfoto/Darling Ingredients Inc.)

"Q4 was an outstanding quarter, capping off another record year for Darling Ingredients, " said Randall C. Stuewe, Chairman and Chief Executive Officer of Darling Ingredients Inc. "Robust demand in our feed segment aligned with increasing demand at Diamond Green Diesel (DGD) positions us well for strong performance in 2022."

DGD sold a record 370 million gallons of renewable diesel in fiscal year 2021 at an average of $2.07 EBITDA per gallon. The DGD Norco, La. renewable diesel expansion project was commissioned in the fourth quarter and is operating above nameplate capacity.

"DGD is providing a solid return," Stuewe added. "Our announced agreement to purchase Valley Proteins strategically positions us to provide low CI feedstocks to fuel growing demand for renewable diesel. It also opens the door to potential new export opportunities as our world drives toward decarbonization."

The leverage ratio as measured by the company's bank covenant was 1.57x at the end of the year. The company reduced its Term Loan B outstanding balance by $100 million during 2021. Capital expenditures totaled approximately $274 million in 2021.  Repurchase of the company's common stock totaled $167.7 million in 2021.

For the 2021 fiscal year, Darling reported net sales of $4.7 billion, as compared with net sales of $3.6 billion for 2020. Net income attributable to Darling for 2021 was $650.9 million, or $3.90 per diluted share, as compared to net income of $296.8 million, or $1.78 per diluted share, for 2020.

As of Jan. 1, 2022, Darling had $69.1 million in cash and cash equivalents, and $1.29 billion available under its committed revolving credit agreement. Total debt outstanding at the end of the fiscal year was $1.46 billion.

Combined adjusted EBITDA was $306.8 million for the fourth quarter of 2021, compared to $214.5 million for the same period in 2020. For the 2021 fiscal year, combined adjusted EBITDA totaled $1.235 billion, compared to $841.5 million for fiscal year 2020.

Segment Financial Tables (in thousands)
(unaudited)

 

Three Months Ended January 1, 2022

Feed
Ingredients

Food
Ingredients

Fuel
Ingredients

Corporate

Total

           

Net sales

$       846,498

$       344,677

$       118,893

$               -

$     1,310,068

Cost of sales and operating expenses

621,581

272,972

94,371

-

988,924

Gross margin

$       224,917

$         71,705

$         24,522

$               -

$        321,144

           

Gain on sale of assets

(60)

(87)

(18)

-

(165)

Selling, general and administrative expenses

57,484

22,405

3,177

14,667

97,733

Depreciation and amortization

56,538

15,263

6,222

2,782

80,805

Acquisition and integration costs

-

-

-

1,396

1,396

Equity in net income of Diamond Green Diesel

-

-

69,663

-

69,663

Segment operating income/(loss)

$       110,955

$         34,124

$         84,804

$    (18,845)

$        211,038

Equity in net income of other unconsolidated subsidiaries

$           1,554

$                   -

$                   -

$               -

$            1,554

Segment Income/(loss)

$       112,509

$         34,124

$         84,804

$    (18,845)

$        212,592

           

Segment EBITDA

$       167,493

$         49,387

$         21,363

$    (14,667)

$        223,576

DGD adjusted EBITDA (Darling's Share)

$                   -

$                   -

$         83,192

$               -

$          83,192

Combined adjusted EBITDA

$       167,493

$         49,387

$       104,555

$    (14,667)

$        306,768

           

Three Months Ended January 2, 2021

Feed
Ingredients

Food
Ingredients

Fuel
Ingredients

Corporate

Total

           

Net sales

$       572,764

$       344,631

$       102,444

$               -

$     1,019,839

Cost of sales and operating expenses

426,593

268,348

76,251

-

771,192

Gross margin

$       146,171

$         76,283

$         26,193

$               -

$        248,647

           

Loss/(gain) on sale of assets

(274)

512

(22)

-

216

Selling, general and administrative expenses

56,289

26,000

5,369

14,459

102,117

Restructuring and asset impairment charges

-

-

38,167

-

38,167

Depreciation and amortization

61,219

22,827

9,513

2,908

96,467

Equity in net income of Diamond Green Diesel

-

-

62,684

-

62,684

Segment operating income/(loss)

$         28,937

$         26,944

$         35,850

$    (17,367)

$          74,364

Equity in net income of other unconsolidated subsidiaries

$              726

$                   -

$                   -

$               -

$               726

Segment income/(loss)

$         29,663

$         26,944

$         35,850

$    (17,367)

$          75,090

           

Segment EBITDA

$         90,156

$         49,771

$         20,846

$    (14,459)

$        146,314

DGD adjusted EBITDA (Darling's Share)

$                   -

$                   -

$         68,171

$               -

$          68,171

Combined adjusted EBITDA

$         90,156

$         49,771

$         89,017

$    (14,459)

$        214,485

           
           

Segment Financial Tables (in thousands) continued
(unaudited)

 

Twelve Months Ended January 1, 2022

Feed
Ingredients

Food
Ingredients

Fuel
Ingredients

Corporate

Total

           

Net sales

$    3,039,500

$    1,271,629

$       430,240

$               -

$     4,741,369

Cost of sales and operating expenses

2,206,248

979,232

313,905

-

3,499,385

Gross margin

$       833,252

$       292,397

$       116,335

$               -

$     1,241,984

Gain on sale of assets

(550)

(88)

(320)

-

(958)

Selling, general and administrative expenses

220,078

97,555

16,999

56,906

391,538

Restructuring and asset impairment charges

-

-

778

-

778

Depreciation and amortization

218,942

60,929

25,436

11,080

316,387

Acquisition and integration costs

-

-

-

1,396

1,396

Equity in net income of Diamond Green Diesel

-

-

351,627

-

351,627

Segment operating income/(loss)

$       394,782

$       134,001

$       425,069

$    (69,382)

$        884,470

Equity in net income of other unconsolidated subsidiaries

$           5,753

$                   -

$                   -

$               -

$            5,753

Segment income/(loss)

$       400,535

$       134,001

$       425,069

$    (69,382)

$        890,223

           

Segment EBITDA

$       613,724

$       194,930

$         99,656

$    (56,906)

$        851,404

DGD adjusted EBITDA (Darling's Share)

$                   -

$                   -

$       383,419

$               -

$        383,419

Combined adjusted EBITDA

$       613,724

$       194,930

$       483,075

$    (56,906)

$     1,234,823

           
           

Twelve Months Ended January 2, 2021

Feed
Ingredients

Food
Ingredients

Fuel
Ingredients

Corporate

Total

           

Net sales

$    2,072,104

$    1,185,701

$       314,118

$               -

$     3,571,923

Cost of sales and operating expenses

1,544,524

920,682

223,609

-

2,688,815

Gross margin

$       527,580

$       265,019

$         90,509

$               -

$        883,108

Loss/(gain) on sale of assets

19

482

(75)

-

426

Selling, general and administrative expenses

209,748

97,406

16,014

55,328

378,496

Restructuring and asset impairment charges

-

-

38,167

-

38,167

Depreciation and amortization

221,187

83,752

34,218

11,021

350,178

Equity in net income of Diamond Green Diesel

-

-

315,095

-

315,095

Segment operating income/(loss)

$         96,626

$         83,379

$       317,280

$    (66,349)

$        430,936

Equity in net income of other unconsolidated subsidiaries

$           3,193

$                   -

$                   -

$               -

$            3,193

Segment income/(loss)

$         99,819

$         83,379

$       317,280

$    (66,349)

$        434,129

           

Segment EBITDA

$       317,813

$       167,131

$         74,570

$    (55,328)

$        504,186

DGD adjusted EBITDA (Darling's Share)

$                   -

$                   -

$       337,348

$               -

$        337,348

Combined adjusted EBITDA

$       317,813

$       167,131

$       411,918

$    (55,328)

$        841,534

 

 

Darling Ingredients Inc. and Subsidiaries
Consolidated Balance Sheets
January 1, 2022 and January 2, 2021

  (in thousands)

 
 

January 1,

 

January 2,

2022

 

2021

ASSETS

(unaudited)

   

Current assets:

     
 

Cash and cash equivalents

$              68,906

 

$              81,617

 

Restricted cash

166

 

103

 

Accounts receivable, net

469,092

 

405,387

 

Inventories

457,465

 

405,922

 

Prepaid expenses

53,711

 

47,793

 

Income taxes refundable

1,075

 

3,883

 

Other current assets

38,599

 

42,289

 

              Total current assets

1,089,014

 

986,994

Property, plant and equipment, net

1,840,080

 

1,863,814

Intangible assets, net

397,801

 

473,680

Goodwill

1,219,116

 

1,260,240

Investment in unconsolidated subsidiaries

1,349,247

 

804,682

Operating lease right-of-use assets

155,464

 

146,563

Other assets

66,795

 

60,682

Deferred income taxes

16,211

 

16,676

   

$         6,133,728

 

$         5,613,331

LIABILITIES AND STOCKHOLDERS' EQUITY

     

Current liabilities:

     
 

Current portion of long-term debt

$              24,407

 

$              27,538

 

Accounts payable, principally trade

307,118

 

255,340

 

Income taxes payable

32,310

 

17,497

 

Current operating lease liabilities

38,168

 

39,459

 

Accrued expenses

350,681

 

335,471

 

              Total current liabilities

752,684

 

675,305

Long-term debt, net of current portion

1,438,974

 

1,480,531

Long-term operating lease liabilities

120,314

 

109,707

Other noncurrent liabilities

111,029

 

117,371

Deferred income taxes

362,942

 

276,208

 

              Total liabilities

2,785,943

 

2,659,122

Commitments and contingencies

     

Total Darling's stockholders' equity

3,280,960

 

2,891,909

Noncontrolling interests

66,825

 

62,300

 

              Total stockholders' equity

3,347,785

 

2,954,209

   

$         6,133,728

 

$         5,613,331

 

 

Darling Ingredients Inc. and Subsidiaries
Consolidated Operating Results
For the Three-Month and Twelve-Month Periods Ended January 1, 2022 and January 2, 2021

(in thousands, except per share data)

 
                     
   

Three Months Ended

     

Twelve Months Ended

   

(unaudited)

 

$ Change

     

  (unaudited)

 

$ Change

   

January 1,

 

January 2,

 

Favorable

     

January 1,

 

January 2,

 

Favorable

   

2022

 

2021

 

(Unfavorable)

     

2022

 

2021

 

(Unfavorable)

Net sales

$    1,310,068

 

$    1,019,839

 

$        290,229

     

$    4,741,369

 

$     3,571,923

 

$     1,169,446

Costs and expenses:

                         
 

Cost of sales and operating expenses

988,924

 

771,192

 

(217,732)

     

3,499,385

 

2,688,815

 

(810,570)

 

Loss (gain) on sale of assets

(165)

 

216

 

381

     

(958)

 

426

 

1,384

 

Selling, general and administrative expenses

97,733

 

102,117

 

4,384

     

391,538

 

378,496

 

(13,042)

 

Restructuring and asset impairment charges

-

 

38,167

 

38,167

     

778

 

38,167

 

37,389

 

Depreciation and amortization

80,805

 

96,467

 

15,662

     

316,387

 

350,178

 

33,791

 

Acquisition and integration costs

1,396

 

-

 

(1,396)

     

1,396

 

-

 

(1,396)

Total costs and expenses

1,168,693

 

1,008,159

 

(160,534)

     

4,208,526

 

3,456,082

 

(752,444)

 

Equity in net income of Diamond Green Diesel

69,663

 

62,684

 

6,979

     

351,627

 

315,095

 

36,532

Operating income

211,038

 

74,364

 

136,674

     

884,470

 

430,936

 

453,534

Other expense:

                         
 

Interest expense

(14,972)

 

(16,883)

 

1,911

     

(62,077)

 

(72,686)

 

10,609

 

Foreign currency losses

(900)

 

(1,581)

 

681

     

(2,199)

 

(2,290)

 

91

 

Other expense, net

(1,341)

 

(256)

 

(1,085)

     

(4,551)

 

(5,534)

 

983

Total other expense

(17,213)

 

(18,720)

 

1,507

     

(68,827)

 

(80,510)

 

11,683

Equity in net income

                         

    of other unconsolidated subsidiaries

1,554

 

726

 

828

     

5,753

 

3,193

 

2,560

Income before income taxes

195,379

 

56,370

 

139,009

     

821,396

 

353,619

 

467,777

Income tax expense

37,782

 

10,231

 

(27,551)

     

164,106

 

53,289

 

(110,817)

Net income

157,597

 

46,139

 

111,458

     

657,290

 

300,330

 

356,960

Net income attributable to

                         
 

noncontrolling interests

(1,843)

 

(1,394)

 

(449)

     

(6,376)

 

(3,511)

 

(2,865)

Net income attributable to Darling

$       155,754

 

$         44,745

 

$        111,009

     

$       650,914

 

$        296,819

 

$        354,095

                             

Basic income per share:

$             0.96

 

$             0.28

 

$              0.68

     

$             4.01

 

$              1.83

 

$              2.18

Diluted income per share:

$             0.94

 

$             0.27

 

$              0.67

     

$             3.90

 

$              1.78

 

$              2.12

                             

Number of diluted common shares:

166,267

 

167,920

         

167,096

 

167,208

   

 

Darling Ingredients Inc. and Subsidiaries
Consolidated Statement of Cash Flows
Periods Ended January 1, 2022 and January 2, 2021

(in thousands)

 
       

Twelve Months Ended

       

(unaudited)

   
       

January 1,

 

January 2,

Cash flows from operating activities:

2022

 

2021

 

Net income

 

$  657,290

 

$    300,330

 

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

     
   

Depreciation and amortization

316,387

 

350,178

   

Deferred income taxes

96,812

 

15,814

   

Loss/(gain) on sale of assets

(958)

 

426

   

Asset impairment

 

138

 

37,802

   

Decrease in long-term pension liability

(4,742)

 

(6,555)

   

Stock-based compensation expense

21,837

 

23,222

   

Write-off deferred loan costs

1,130

 

3,052

   

Deferred loan cost amortization

4,038

 

5,357

   

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

(357,380)

 

(318,288)

   

Distributions of earnings from Diamond Green Diesel and other unconsolidated subsidiaries

4,611

 

207,328

   

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

     
   

     Accounts receivable

(79,954)

 

22,362

   

     Income taxes refundable/payable

18,826

 

4,200

   

     Inventories and prepaid expenses

(72,919)

 

(18,666)

   

     Accounts payable and accrued expenses

84,580

 

11,200

   

     Other

 

14,724

 

(13,111)

     

Net cash provided by operating activities

704,420

 

624,651

Cash flows from investing activities:

     
 

Capital expenditures

(274,126)

 

(280,115)

 

Acquisitions, net of cash acquired

(2,059)

 

(29,793)

 

Investment in Diamond Green Diesel

(189,000)

 

-

 

Investment in other unconsolidated subsidiaries

(4,449)

 

-

 

Loan to Diamond Green Diesel

(25,000)

 

-

 

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

4,645

 

2,797

 

Proceeds from insurance settlement

-

 

293

 

Payments related to routes and other intangibles

(274)

 

(3,810)

     

Net cash used in investing activities

(490,263)

 

(310,628)

Cash flows from financing activities:

     
 

Proceeds from long-term debt

43,824

 

34,569

 

Payments on long-term debt

(142,133)

 

(232,726)

 

Borrowings from revolving credit facility

620,601

 

495,691

 

Payments on revolving credit facility

(515,424)

 

(480,604)

 

Net cash overdraft financing

(3,845)

 

(37,692)

 

Deferred loan costs

 

(3,809)

 

(4,292)

 

Issuance of common stock

50

 

67

 

Repurchase of common stock

(167,708)

 

(55,044)

 

Minimum withholding taxes paid on stock awards

(46,894)

 

(11,918)

 

Acquisition of noncontrolling interest

-

 

(8,784)

 

Distributions to noncontrolling interests

(6,022)

 

(6,253)

     

Net cash used in financing activities

(221,360)

 

(306,986)

Effect of exchange rate changes on cash flows

(5,445)

 

1,638

Net (decrease)/increase in cash, cash equivalents and restricted cash

(12,648)

 

8,675

Cash, cash equivalents and restricted cash at beginning of year

81,720

 

73,045

Cash, cash equivalents and restricted cash at end of period

$     69,072

 

$       81,720

Supplemental disclosure of cash flow information:

     
 

Accrued capital expenditures

$        6,585

 

$        (4,967)

 

Cash paid during the period for:

     
   

Interest, net of capitalized interest

$     58,449

 

$       66,216

   

Income taxes, net of refunds

$     46,399

 

$       36,779

 

Non-cash operating activities:

     
   

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

$     56,642

 

$       58,052

 

Non-cash financing activities:

     
   

Debt issued for service contract assets

$            126

 

$          8,123

 

Diamond Green Diesel Joint Venture
Condensed Consolidated Balance Sheets
December 31, 2021 and December 31, 2020

(in thousands)

 
       

December  31,

 

December  31,

       

2021

 

2020

Assets:

         
 

Total current assets

 

$        686,294

 

$       383,557

 

Property, plant and equipment, net

 

2,710,747

 

1,238,726

 

Other assets

 

51,514

 

36,082

   

Total assets

 

$     3,448,555

 

$    1,658,365

             

Liabilities and members' equity:

       
 

Total current portion of long term debt

 

$        165,092

 

$              517

 

Total other current liabilities

 

295,860

 

99,787

 

Total long term debt

 

344,309

 

8,705

 

Total other long term liabilities

 

17,531

 

3,758

 

Total members' equity

 

2,625,763

 

1,545,598

   

Total liabilities and members' equity

 

$     3,448,555

 

$    1,658,365

 

Diamond Green Diesel Joint Venture
Operating Financial Results
For the Three-Month and Twelve-Month Periods Ended December 31, 2021 and December 31, 2020

(in thousands)

 
                         
     

Three Months Ended

     

Twelve Months Ended

 
     

(unaudited)

 

$ Change

         

$ Change

 
     

December 31,

 

December 31,

 

Favorable

     

December 31,

 

December 31,

 

Favorable

 

Revenues:

2021

 

2020

 

(Unfavorable)

     

2021

 

2020

 

(Unfavorable)

 
 

Operating revenues

$        936,940

 

$        266,760

 

$          670,180

     

$     2,342,332

 

$     1,267,477

 

$     1,074,855

 

Expenses:

                           
 

Total costs and expenses less

                           
   

depreciation, amortization and accretion expense

770,555

 

130,417

 

(640,138)

     

1,575,494

 

592,781

 

(982,713)

 
 

Depreciation, amortization and

23,653

 

11,222

 

(12,431)

     

58,326

 

44,882

 

(13,444)

 
   

accretion expense

                           

Total costs and expenses

794,208

 

141,639

 

(652,569)

     

1,633,820

 

637,663

 

(996,157)

 
 

Operating income 

142,732

 

125,121

 

17,611

     

708,512

 

629,814

 

78,698

 

Other income

154

 

560

 

(406)

     

678

 

1,636

 

(958)

 
   

Interest and debt expense, net

(3,560)

 

(313)

 

(3,247)

     

(5,936)

 

(1,260)

 

(4,676)

 
   

Net income 

$        139,326

 

$        125,368

 

$            13,958

     

$        703,254

 

$        630,190

 

$          73,064

 
                                 

 

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 to Foreign
Currency                      
For the Three-Month and Twelve-Month Periods Ended January 1, 2022 and January 2, 2021
(unaudited) 

   

Three Months Ended

   

Twelve Months Ended 

Adjusted EBITDA 

January 1,

 

January 2,

   

January 1,

 

January 2,

(U.S. dollars in thousands)

2022

 

2021

   

2022

 

2021

                   

Net income attributable to Darling

$          155,754

 

$            44,745

   

$          650,914

 

$          296,819

Depreciation and amortization

80,805

 

96,467

   

316,387

 

350,178

Interest expense

14,972

 

16,883

   

62,077

 

72,686

Income tax expense

37,782

 

10,231

   

164,106

 

53,289

Restructuring and asset impairment charges

-

 

38,167

   

778

 

38,167

Acquisition and integration costs

1,396

 

-

   

1,396

 

-

Foreign currency losses

900

 

1,581

   

2,199

 

2,290

Other expense, net

1,341

 

256

   

4,551

 

5,534

Equity in net income of Diamond Green Diesel

(69,663)

 

(62,684)

   

(351,627)

 

(315,095)

Equity in net income of other unconsolidated subsidiaries

(1,554)

 

(726)

   

(5,753)

 

(3,193)

Net income attributable to noncontrolling interests

1,843

 

1,394

   

6,376

 

3,511

 

Adjusted EBITDA (Non-GAAP)

$          223,576

 

$          146,314

   

$          851,404

 

$          504,186

Foreign currency exchange impact 

2,903

(1)

-

   

(18,888)

(2)

-

 

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

$          226,479

 

$          146,314

   

$          832,516

 

$          504,186

DGD Joint Venture Adjusted EBITDA (Darling's Share)

$            83,192

 

$            68,171

   

$          383,419

 

$          337,348

                   

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

$          306,768

 

$          214,485

   

$       1,234,823

 

$          841,534

                   

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

January 1, 2022 of €1.00:USD$1.14 and CAD$1.00:USD$0.79, as compared to the average rate for the three months ended

January 2, 2021 of  €1.00:USD$1.19 and CAD$1.00:USD$0.77, respectively.

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

January 1, 2022 of €1.00:USD$1.18 and CAD$1.00:USD$0.80, as compared to the average rate for the twelve months ended

January 2, 2021 of €1.00:USD$1.14 and CAD$1.00:USD$0.75, respectively.

 

About Darling

Darling Ingredients Inc. (NYSE: DAR) is the largest publicly traded company turning food waste into sustainable products and a leading producer of renewable energy. Recognized as a sustainability leader, the company operates 250 plants in 17 countries and repurposes nearly 10% of the world's meat industry waste streams into value-added products, such as green energy, renewable diesel, collagen, fertilizer, animal proteins and meals and pet food ingredients. To learn more, visit darlingii.com. Follow us on LinkedIn.

Darling Ingredients Inc. will host a conference call to discuss the Company's fourth quarter and fiscal year 2021 financial results at 9 a.m. Eastern Time (8 a.m. Central Time) on Tuesday, March 1, 2022.  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 10163722. 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 8, 2022, 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 82060219.  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, 5.25% Notes and 3.625% Notes that were outstanding at January 1, 2022. 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.

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; failure to close on strategic acquisitions, such as Valley Proteins; 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 EastNorth KoreaUkraine 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.}

 

Contact:   

Suann Guthrie

 

VP, Investor Relations, Sustainability & Communications

 

(469) 214-8202

 

 

SOURCE Darling Ingredients Inc.

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