IRVING, Texas, March 2, 2021 /PRNewswire/ -- Darling
Ingredients Inc. (NYSE: DAR, "Darling") --
Fourth Quarter 2020
- Net income of $44.7 million, or
$0.27 per GAAP diluted share
- Adjusted net income of $75.3
million, or $0.45 per diluted
share, excluding the $30.6 million
after-tax restructuring and asset impairment charge related to the
shutdown of the company's biodiesel plants in Montreal, Quebec and Butler, Kentucky
- Net Sales of $1.0 billion
- Combined adjusted EBITDA of $214.5
million
- Global Ingredients business record Q4 EBITDA of $146.3 million
Fiscal Year 2020
- Net income of $296.8 million, or
$1.78 per GAAP diluted share
- Adjusted net income of $327.4
million, or $1.96 per diluted
share, excluding the $30.6 million
after-tax restructuring and asset impairment charge related to the
shutdown of the company's biodiesel plants in Montreal, Quebec and Butler, Kentucky
- Net Sales of $3.6 billion
- Combined adjusted EBITDA of $841.5
million
- Global Ingredients business FY 2020 EBITDA of $504.2 million
- Diamond Green Diesel sold a
record 288 million gallons of renewable diesel at an average of
$2.34 EBITDA per gallon
Darling reported net sales of $1.0
billion for the fourth quarter of 2020, as compared with net
sales of $859.4 million for the same
period a year ago. Net income attributable to Darling for the
three months ended January 2, 2021
was $44.7 million, or $0.27 per diluted share, compared to a net income
of $242.6 million, or $1.44 per diluted share, for the fourth quarter
of 2019. Excluding the restructuring and asset impairment charge
related to the shutdown of the company's 2 biodiesel locations,
adjusted net income for the three months ended January 2, 2021 was $75.3
million, or $0.45 per diluted
share. The results for the three months ending December 28, 2019 included retroactive blenders
tax credit (BTC) for 2018 and all of 2019. Adjusted net income for
the fourth quarter 2019, excluding the retroactive BTC of 2018 and
the first three quarters of 2019, was $50.1
million, or $0.30 per diluted
share.
"Our global ingredients business performed well in the fourth
quarter of 2020 generating $146.3
million of EBITDA," said Randall C.
Stuewe, Chairman and Chief Executive Officer of Darling
Ingredients Inc. "We made the decision to shutdown operations of
our two biodiesel plants due to unfavorable biodiesel industry
economics and there are no current plans to resume biodiesel
production at these facilities in the future. The closure of the
facilities will create additional feedstock for growth of renewable
diesel in our DGD Joint Venture."
"DGD met our expectation for 2020 selling 288 million gallons of
renewable diesel at an average of $2.34 EBITDA per gallon," Stuewe added. The
earnings of DGD have been consistent and steady over the last three
years and based on the current environment, we believe that DGD
should generate around $2.25 EBITDA
per gallon for 2021. Also, we anticipate the startup of the 400
million gallon expansion in Norco,
LA to commission in the fourth quarter, potentially adding
some capacity to finish out the year," Stuewe added.
The leverage ratio as measured by the company's bank covenant
was 1.90x at the end of the year. The company reduced its Term Loan
B outstanding balance by $195 million during 2020. Capital
expenditures totaled approximately $280
million for all of 2020, down $79
million from 2019, which was due to the company initiating a
temporary reduction in non-essential capital expenditures in
2020.
For the 2020 fiscal year, Darling reported net sales of
$3.6 billion, as compared with net
sales of $3.4 billion for 2019. Net
Income attributable to Darling for 2020 was $296.8 million, or $1.78 per diluted share, as compared to net
income of $312.6 million, or
$1.86 per diluted share, for 2019.
Excluding the restructuring and asset impairment charge related to
the shutdown of the company's two biodiesel locations, adjusted net
income for 2020 was $327.4 million,
or $1.96 per diluted share. Excluding
the retroactive BTC related to 2018, adjusted net income for fiscal
2019 was $226.0 million, or
$1.34 per diluted share.
As of January 2, 2021, Darling had
$81.7 million in cash and cash
equivalents, and $893.9 million
available under its committed revolving credit agreement. Total
debt outstanding at the end of the fiscal year was $1.5 billion.
Combined adjusted EBITDA was $214.5
million for the fourth quarter of 2020, compared to
$193.3 million for the same period in
2019, excluding retroactive BTCs recorded in the 2019 fourth
quarter. For the 2020 fiscal year, combined adjusted EBITDA totaled
$841.5 million, compared to
$739.7 million for fiscal year 2019,
excluding the 2018 retroactive BTC.
Segment Financial Tables (in thousands)
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 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
|
|
|
|
|
|
|
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
|
|
|
|
|
|
|
Loss/(gain) on sale
of assets
|
(377)
|
343
|
297
|
-
|
263
|
Selling, general and
administrative expenses
|
57,872
|
29,234
|
2,179
|
19,669
|
108,954
|
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/(loss)
|
$
1,647
|
$
16,959
|
$
297,171
|
$ (22,490)
|
$
293,287
|
Equity in net income
of unconsolidated subsidiaries
|
$
1,515
|
$
-
|
$
-
|
$
-
|
$
1,515
|
Segment
income/(loss)
|
$
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
|
Combined adjusted
EBITDA
|
$
56,832
|
$
37,515
|
$
311,146
|
$
(19,669)
|
$
385,824
|
|
|
|
|
|
|
|
|
|
|
|
|
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 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
|
|
|
|
|
|
|
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
|
|
|
|
|
|
|
Loss/(gain) on sale
of assets
|
(7,720)
|
(13,175)
|
313
|
-
|
(20,582)
|
Selling, general and
administrative expenses
|
200,487
|
97,363
|
2,762
|
57,911
|
358,523
|
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/(loss)
|
$
54,742
|
$
90,608
|
$
398,819
|
$ (68,348)
|
$
475,821
|
Equity in net income
of unconsolidated subsidiaries
|
$
428
|
$
-
|
$
-
|
$
-
|
$
428
|
Segment
income/(loss)
|
$
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
|
Combined adjusted
EBITDA
|
$
258,198
|
$
170,279
|
$
455,729
|
$
(57,911)
|
$
826,295
|
Darling
Ingredients Inc. and Subsidiaries
|
Consolidated
Balance Sheets
|
January 2, 2021
and December 28, 2019
|
(in
thousands)
|
|
|
|
|
|
|
|
January 2,
|
|
December
28,
|
|
|
2021
|
|
2019
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
$
81,617
|
|
$
72,935
|
|
Restricted
cash
|
103
|
|
110
|
|
Accounts receivable,
net
|
405,387
|
|
406,338
|
|
Inventories
|
405,922
|
|
362,957
|
|
Prepaid
expenses
|
47,793
|
|
46,599
|
|
Income taxes
refundable
|
3,883
|
|
3,317
|
|
Other current
assets
|
42,289
|
|
25,032
|
|
Total current assets
|
986,994
|
|
917,288
|
Property, plant and
equipment, net
|
1,863,814
|
|
1,802,411
|
Intangible assets,
net
|
473,680
|
|
526,394
|
Goodwill
|
1,260,240
|
|
1,223,291
|
Investment in
unconsolidated subsidiaries
|
804,682
|
|
689,354
|
Operating lease
right-of-use assets
|
146,563
|
|
124,726
|
Other
assets
|
60,682
|
|
47,400
|
Deferred income
taxes
|
16,676
|
|
14,394
|
|
$
5,613,331
|
|
$
5,345,258
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
|
Current portion of
long-term debt
|
$
27,538
|
|
$
90,996
|
|
Accounts payable,
principally trade
|
255,340
|
|
239,252
|
|
Income taxes
payable
|
17,497
|
|
8,895
|
|
Current operating
lease liabilities
|
39,459
|
|
37,805
|
|
Accrued
expenses
|
335,471
|
|
311,391
|
|
Total current liabilities
|
675,305
|
|
688,339
|
Long-term debt, net
of current portion
|
1,480,531
|
|
1,558,429
|
Long-term operating
lease liabilities
|
109,707
|
|
91,424
|
Other noncurrent
liabilities
|
117,371
|
|
115,785
|
Deferred income
taxes
|
276,208
|
|
247,931
|
|
Total liabilities
|
2,659,122
|
|
2,701,908
|
Commitments and
contingencies
|
|
|
|
Total Darling's
stockholders' equity
|
2,891,909
|
|
2,565,819
|
Noncontrolling
interests
|
62,300
|
|
77,531
|
|
Total stockholders' equity
|
$
2,954,209
|
|
$
2,643,350
|
|
|
$
5,613,331
|
|
$
5,345,258
|
Darling
Ingredients Inc. and Subsidiaries
|
Consolidated
Operating Results
|
For the
Three-Month and Twelve-Month Periods Ended January 2, 2021 and
December 28, 2019
|
(in thousands, except
per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
Twelve Months
Ended
|
|
|
(unaudited)
|
|
$ Change
|
|
|
|
|
|
|
|
$ Change
|
|
|
January 2,
|
|
December
28,
|
|
Favorable
|
|
|
|
January 2,
|
|
December
28,
|
|
Favorable
|
|
|
2021
|
|
2019
|
|
(Unfavorable)
|
|
|
|
2021
|
|
2019
|
|
(Unfavorable)
|
Net sales
|
$
1,019,839
|
|
$
859,428
|
|
$
160,411
|
|
|
|
$
3,571,923
|
|
$
3,363,905
|
|
$
208,018
|
Costs and
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales and
operating expenses
|
771,192
|
|
640,533
|
|
(130,659)
|
|
|
|
2,688,815
|
|
2,589,085
|
|
(99,730)
|
|
Loss (gain) on sale
of assets
|
216
|
|
263
|
|
47
|
|
|
|
426
|
|
(20,582)
|
|
(21,008)
|
|
Selling, general and
administrative expenses
|
102,117
|
|
108,954
|
|
6,837
|
|
|
|
378,496
|
|
358,523
|
|
(19,973)
|
|
Restructuring and
asset impairment charges
|
38,167
|
|
-
|
|
(38,167)
|
|
|
|
38,167
|
|
-
|
|
(38,167)
|
|
Depreciation and
amortization
|
96,467
|
|
86,453
|
|
(10,014)
|
|
|
|
350,178
|
|
325,510
|
|
(24,668)
|
Total costs and
expenses
|
1,008,159
|
|
836,203
|
|
(171,956)
|
|
|
|
3,456,082
|
|
3,252,536
|
|
(203,546)
|
|
Equity in net income
of Diamond Green Diesel
|
62,684
|
|
270,062
|
|
(207,378)
|
|
|
|
315,095
|
|
364,452
|
|
(49,357)
|
Operating
income
|
74,364
|
|
293,287
|
|
(218,923)
|
|
|
|
430,936
|
|
475,821
|
|
(44,885)
|
Other
expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
(16,883)
|
|
(18,586)
|
|
1,703
|
|
|
|
(72,686)
|
|
(78,674)
|
|
5,988
|
|
Debt extinguishment
costs
|
-
|
|
-
|
|
-
|
|
|
|
-
|
|
(12,126)
|
|
12,126
|
|
Foreign currency
loss
|
(1,581)
|
|
(657)
|
|
(924)
|
|
|
|
(2,290)
|
|
(1,311)
|
|
(979)
|
|
Gain on disposal of
subsidiaries
|
-
|
|
2,967
|
|
(2,967)
|
|
|
|
|
|
2,967
|
|
(2,967)
|
|
Other income
(expense), net
|
(256)
|
|
487
|
|
(743)
|
|
|
|
(5,534)
|
|
(6,671)
|
|
1,137
|
Total other
expense
|
(18,720)
|
|
(15,789)
|
|
(2,931)
|
|
|
|
(80,510)
|
|
(95,815)
|
|
15,305
|
Equity in net income
of unconsolidated subsidiaries
|
726
|
|
1,515
|
|
(789)
|
|
|
|
3,193
|
|
428
|
|
2,765
|
Income from
operations before income taxes
|
56,370
|
|
279,013
|
|
(222,643)
|
|
|
|
353,619
|
|
380,434
|
|
(26,815)
|
Income tax
expense
|
10,231
|
|
35,567
|
|
25,336
|
|
|
|
53,289
|
|
59,467
|
|
6,178
|
Net income
|
46,139
|
|
243,446
|
|
(197,307)
|
|
|
|
300,330
|
|
320,967
|
|
(20,637)
|
Net income
attributable to noncontrolling interests
|
(1,394)
|
|
(837)
|
|
(557)
|
|
|
|
(3,511)
|
|
(8,367)
|
|
4,856
|
Net income
attributable to Darling
|
$
44,745
|
|
$
242,609
|
|
$
(197,864)
|
|
|
|
$
296,819
|
|
$
312,600
|
|
$
(15,781)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic income per
share:
|
$
0.28
|
|
$
1.48
|
|
$
(1.20)
|
|
|
|
$
1.83
|
|
$
1.90
|
|
$
(0.07)
|
Diluted income per
share:
|
$
0.27
|
|
$
1.44
|
|
$
(1.17)
|
|
|
|
$
1.78
|
|
$
1.86
|
|
$
(0.08)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of diluted
common shares:
|
167,920
|
|
168,152
|
|
|
|
|
|
167,208
|
|
168,378
|
|
|
Darling
Ingredients Inc. and Subsidiaries
|
Consolidated
Statement of Cash Flows
|
Periods Ended
January 2, 2021 and December 28, 2019
|
(in
thousands)
|
|
|
|
|
|
Twelve Months
Ended
|
|
|
|
|
Jan 2,
|
|
Dec 28,
|
Cash flows from
operating activities:
|
2021
|
|
2019
|
|
Net income
|
$
300,330
|
|
$
320,967
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
Depreciation and
amortization
|
350,178
|
|
325,510
|
|
|
Deferred income
taxes
|
15,814
|
|
20,530
|
|
|
Loss/(gain) on sale
of assets
|
426
|
|
(20,582)
|
|
|
Gain on disposal of
subsidiaries
|
-
|
|
(2,967)
|
|
|
Asset
impairment
|
37,802
|
|
|
|
|
Gain on insurance
proceeds from insurance settlement
|
(293)
|
|
(6,600)
|
|
|
Increase (decrease)
in long-term pension liability
|
(6,555)
|
|
1,831
|
|
|
Stock-based
compensation expense
|
23,222
|
|
21,007
|
|
|
Debt extinguishment
costs
|
-
|
|
12,126
|
|
|
Write-off deferred
loan costs
|
3,052
|
|
270
|
|
|
Deferred loan cost
amortization
|
5,357
|
|
5,846
|
|
|
Equity in net income
of Diamond Green Diesel and other unconsolidated
subsidiaries
|
(318,288)
|
|
(364,880)
|
|
|
Distributions of
earnings from Diamond Green Diesel and other unconsolidated
subsidiaries
|
207,328
|
|
69,213
|
|
|
Changes in operating
assets and liabilities, net of effects from
acquisitions:
|
|
|
|
|
|
Accounts
receivable
|
22,362
|
|
(26,086)
|
|
|
Income taxes
refundable/payable
|
4,200
|
|
9,542
|
|
|
Inventories and prepaid
expenses
|
(18,666)
|
|
(39,111)
|
|
|
Accounts payable and accrued
expenses
|
11,200
|
|
32,436
|
|
|
Other
|
(12,818)
|
|
3,569
|
|
|
|
Net cash provided by
operating activities
|
624,651
|
|
362,621
|
Cash flows from
investing activities:
|
|
|
|
|
Capital
expenditures
|
(280,115)
|
|
(359,498)
|
|
Acquisitions, net of
cash acquired
|
(29,793)
|
|
(1,431)
|
|
Investment in
unconsolidated subsidiaries
|
-
|
|
(2,000)
|
|
Proceeds from sale of
investment in subsidiaries
|
-
|
|
3,671
|
|
Gross proceeds from
disposal of property, plant and equipment and other
assets
|
2,797
|
|
18,235
|
|
Proceeds from
insurance settlement
|
293
|
|
6,600
|
|
Payments related to
routes and other intangibles
|
(3,810)
|
|
(3,651)
|
|
|
|
Net cash used in
investing activities
|
(310,628)
|
|
(338,074)
|
Cash flows from
financing activities:
|
|
|
|
|
Proceeds from
long-term debt
|
34,569
|
|
517,606
|
|
Payments on long-term
debt
|
(232,726)
|
|
(581,163)
|
|
Borrowings from
revolving credit facility
|
495,691
|
|
469,227
|
|
Payments on revolving
credit facility
|
(480,604)
|
|
(461,669)
|
|
Net cash overdraft
financing
|
(37,692)
|
|
38,367
|
|
Deferred loan
costs
|
(4,292)
|
|
(7,027)
|
|
Issuance of common
stock
|
67
|
|
39
|
|
Repurchase of common
stock
|
(55,044)
|
|
(19,260)
|
|
Minimum withholding
taxes paid on stock awards
|
(11,918)
|
|
(4,472)
|
|
Acquisition of
noncontrolling interest
|
(8,784)
|
|
-
|
|
Distributions to
noncontrolling interests
|
(6,253)
|
|
(6,533)
|
|
|
|
Net cash used in
financing activities
|
(306,986)
|
|
(54,885)
|
Effect of exchange
rate changes on cash flows
|
1,638
|
|
(3,986)
|
Net increase /
(decrease) in cash, cash equivalents and restricted cash
|
8,675
|
|
(34,324)
|
Cash, cash
equivalents and restricted cash at beginning of year
|
73,045
|
|
107,369
|
Cash, cash
equivalents and restricted cash at end of period
|
$
81,720
|
|
$
73,045
|
Supplemental
disclosure of cash flow information:
|
|
|
|
|
Accrued capital
expenditures
|
$
(4,967)
|
|
$
6,714
|
|
Cash paid during the
period for:
|
|
|
|
|
|
Interest, net of
capitalized interest
|
$
66,216
|
|
$
79,132
|
|
|
Income taxes, net of
refunds
|
$
36,779
|
|
$
29,778
|
|
Non-cash operating
activities:
|
|
|
|
|
|
Operating lease right
of use obtained in exchange for new lease liabilities
|
$
58,052
|
|
$
40,596
|
|
Non-cash financing
activities:
|
|
|
|
|
|
Debt issued for
service contract assets
|
$
8,123
|
|
$
25
|
Diamond Green
Diesel Joint Venture
|
Condensed
Consolidated Balance Sheets
|
December 31, 2020
and December 31, 2019
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
December
31,
|
|
December
31,
|
|
|
|
2020
|
|
2019
|
Assets:
|
|
|
|
|
|
Total current
assets
|
$
383,557
|
|
$
668,026
|
|
Property, plant and
equipment, net
|
1,238,726
|
|
713,489
|
|
Other
assets
|
36,082
|
|
30,710
|
|
|
Total
assets
|
$
1,658,365
|
|
$
1,412,225
|
|
|
|
|
|
|
Liabilities and
members' equity:
|
|
|
|
|
Total current portion
of long term debt
|
$
517
|
|
$
341
|
|
Total other current
liabilities
|
99,787
|
|
75,802
|
|
Total long term
debt
|
8,705
|
|
8,742
|
|
Total other long term
liabilities
|
3,758
|
|
4,422
|
|
Total members'
equity
|
1,545,598
|
|
1,322,918
|
|
|
Total liabilities and
members' equity
|
$
1,658,365
|
|
$
1,412,225
|
Diamond Green
Diesel Joint Venture
|
Operating
Financial Results
|
For the
Three-Month and Twelve-Month Periods Ended December 31, 2020 and
December 31, 2019
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Twelve Months
Ended
|
|
|
|
(unaudited)
|
|
$ Change
|
|
|
|
|
|
|
$ Change
|
|
|
|
December
31,
|
|
December
31,
|
|
Favorable
|
|
|
December
31,
|
|
December
31,
|
|
Favorable
|
Revenues:
|
2020
|
|
2019
|
|
(Unfavorable)
|
|
|
2020
|
|
2019
|
|
(Unfavorable)
|
|
Operating
revenues
|
$
266,760
|
|
$
357,857
|
|
$
(91,097)
|
|
|
$
1,267,477
|
|
$
1,217,504
|
|
$
49,973
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total costs and
expenses less depreciation, amortization and accretion
expense
|
130,417
|
|
(194,437)
|
|
(324,854)
|
|
|
592,781
|
|
438,672
|
|
(154,109)
|
|
Depreciation,
amortization and accretion expense
|
11,222
|
|
12,193
|
|
971
|
|
|
44,882
|
|
50,767
|
|
5,885
|
Total costs and
expenses
|
141,639
|
|
(182,244)
|
|
(323,883)
|
|
|
637,663
|
|
489,439
|
|
(148,224)
|
|
Operating
income
|
125,121
|
|
540,101
|
|
(414,980)
|
|
|
629,814
|
|
728,065
|
|
(98,251)
|
Other
income
|
560
|
|
340
|
|
220
|
|
|
1,636
|
|
2,121
|
|
(485)
|
|
|
Interest and debt
expense, net
|
(313)
|
|
(317)
|
|
4
|
|
|
(1,260)
|
|
(1,282)
|
|
22
|
|
|
Net
income
|
$
125,368
|
|
$
540,124
|
|
$
(414,756)
|
|
|
$
630,190
|
|
$
728,904
|
|
$
(98,714)
|
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 Twelve-Month Periods Ended January 2, 2021 and December 28,
2019
|
|
|
|
Three Months
Ended
|
|
|
Twelve Months
Ended
|
Adjusted
EBITDA
|
January 2,
|
|
December
28,
|
|
|
January 2,
|
|
December
28,
|
(U.S. dollars in
thousands)
|
2021
|
|
2019
|
|
|
2021
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to Darling
|
$
44,745
|
|
$
242,609
|
|
|
$ 296,819
|
|
$
312,600
|
Depreciation and
amortization
|
96,467
|
|
86,453
|
|
|
350,178
|
|
325,510
|
Interest
expense
|
16,883
|
|
18,586
|
|
|
72,686
|
|
78,674
|
Income tax
expense
|
10,231
|
|
35,567
|
|
|
53,289
|
|
59,467
|
Restructuring and
asset impairment charges
|
38,167
|
|
-
|
|
|
38,167
|
|
-
|
Foreign currency
loss
|
1,581
|
|
657
|
|
|
2,290
|
|
1,311
|
Other (income)
expense, net
|
256
|
|
(487)
|
|
|
5,534
|
|
6,671
|
Debt extinguishment
costs
|
-
|
|
-
|
|
|
-
|
|
12,126
|
Gain on disposal of
subsidiaries
|
-
|
|
(2,967)
|
|
|
-
|
|
(2,967)
|
Equity in net income
of Diamond Green Diesel
|
(62,684)
|
|
(270,062)
|
|
|
(315,095)
|
|
(364,452)
|
Equity in net income
of unconsolidated subsidiaries
|
(726)
|
|
(1,515)
|
|
|
(3,193)
|
|
(428)
|
Net income
attributable to noncontrolling interests
|
1,394
|
|
837
|
|
|
3,511
|
|
8,367
|
|
Adjusted EBITDA
(Non-GAAP)
|
$ 146,314
|
|
$
109,678
|
|
|
$ 504,186
|
|
$
436,879
|
Foreign currency
exchange impact
|
(6,826)
|
(1)
|
-
|
|
|
(6,419)
|
(2)
|
-
|
|
Pro forma
Adjusted EBITDA to Foreign Currency (Non-GAAP)
|
$ 139,488
|
|
$
109,678
|
|
|
$ 497,767
|
|
$
436,879
|
DGD Joint Venture
Adjusted EBITDA (Darling's Share)
|
$
68,171
|
|
$
276,146
|
|
|
$ 337,348
|
|
$
389,416
|
|
|
|
|
|
|
|
|
|
|
Darling plus
Darling's share of DGD Joint Venture Adjusted
EBITDA
|
$ 214,485
|
|
$
385,824
|
|
|
$ 841,534
|
|
$
826,295
|
|
(1) The average
rate assumption used in this calculation was the actual fiscal
average rate for the three months ended January 2, 2021 of
€1.00:USD$1.19 and CAD$1.00:USD$0.77, as compared to the average
rate for the three months ended December 28, 2019 of
€1.00:USD$1.11 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 twelve months ended January 2, 2021 of
€1.00:USD$1.14 and CAD$1.00:USD$0.75, as compared to the average
rate for the twelve months ended December 28, 2019 of
€1.00:USD$1.12 and CAD$1.00:USD$0.75, respectively.
|
About Darling
Darling Ingredients Inc. (NYSE: DAR) is one of the world's
leading producers of organic ingredients, producing a wide array of
sustainable protein and fat products while being one of the largest
producers of renewable clean energy. With operations on five
continents, Darling collects waste streams from the agri-food
industry, repurposing into specialty ingredients, such as
hydrolyzed collagen, edible and feed-grade fats, animal proteins
and meals, plasma, pet food ingredients, fuel feedstocks, and green
bioenergy. The Company sells its products around the globe and
works to strengthen our promise for a better tomorrow, creating
product applications for health, nutrients and bioenergy while
optimizing our services to the food chain. Darling is a 50% joint
partner in Diamond Green Diesel
(DGD), North America's largest
renewable diesel manufacturer, currently producing approximately
290 million gallons of renewable diesel annually which products
reduce Green House Gas (GHG) emissions by up to 85% compared to
fossil fuels. For additional information, visit the Company's
website at http://www.darlingii.com. For more information on
Darling's ESG efforts, visit
http://www.darlingii.com/csr.
Darling Ingredients Inc. will host a conference call to discuss
the Company's fourth quarter and fiscal year 2020 financial results
at 9:00 am Eastern Time (8:00 am Central Time) on Wednesday, March 3, 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 10151509. 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 10, 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
10151509. 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 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.
Cautionary Statements Regarding Forward-Looking Information:
{This media release contains "forward-looking" statements
regarding the business operations and prospects of Darling
Ingredients Inc. and industry factors affecting it. These
statements are identified by words such as "believe," "anticipate,"
"expect," "estimate," "intend," "could," "may," "will," "should,"
"planned," "potential," "continue," "momentum," and other words
referring to events that may occur in the future. These
statements reflect Darling Ingredient's current view of future
events and are based on its assessment of, and are subject to, a
variety of risks and uncertainties beyond its control, each of
which could cause actual results to differ materially from those
indicated in the forward-looking statements. These factors
include, among others, existing and unknown future limitations on
the ability of the Company's direct and indirect subsidiaries to
make their cash flow available to the Company for payments on the
Company's indebtedness or other purposes; global demands for
bio-fuels and grain and oilseed commodities, which have exhibited
volatility, and can impact the cost of feed for cattle, hogs and
poultry, thus affecting available rendering feedstock and selling
prices for the Company's products; reductions in raw material
volumes available to the Company due to weak margins in the meat
production industry as a result of higher feed costs, reduced
consumer demand or other factors, reduced volume from food service
establishments, or otherwise; reduced demand for animal feed;
reduced finished product prices, including a decline in fat and
used cooking oil finished product prices; changes to worldwide
government policies relating to renewable fuels and greenhouse
gas("GHG") emissions that adversely affect programs like the U.S.
government's renewable fuel standard, low carbon fuel standards
("LCFS") and tax credits for biofuels both in the United States and abroad; possible product
recall resulting from developments relating to the discovery of
unauthorized adulterations to food or food additives; the
occurrence of 2009 H1N1 flu (initially known as "Swine Flu"),
Highly pathogenic strains of avian influenza (collectively known as
"Bird Flu"), severe acute respiratory syndrome ("SARS"), bovine
spongiform encephalopathy (or "BSE"), porcine epidemic diarrhea
("PED") or other diseases associated with animal origin in
the United States or elsewhere,
such as the outbreak of African Swine Fever ("ASF") in China and elsewhere; the occurrence of
pandemics, epidemics or disease outbreaks, such as the current
COVID-19 outbreak; unanticipated costs and/or reductions in raw
material volumes related to the Company's compliance with the
existing or unforeseen new U.S. or foreign (including, without
limitation, China) regulations
(including new or modified animal feed, Bird Flu, SARS, PED, BSE,
ASF or similar or unanticipated regulations) affecting the
industries in which the Company operates or its value added
products; risks associated with the DGD Joint Venture, including
possible unanticipated operating disruptions and issues relating to
the announced expansion project; risks and uncertainties relating
to international sales and operations, including imposition of
tariffs, quotas, trade barriers and other trade protections imposed
by foreign countries; difficulties or a significant disruption in
our information systems or failure to implement new systems and
software successfully, risks relating to possible third party
claims of intellectual property infringement; increased
contributions to the Company's pension and benefit plans, including
multiemployer and employer-sponsored defined benefit pension plans
as required by legislation, regulation or other applicable U.S. or
foreign law or resulting from a U.S. mass withdrawal event; bad
debt write-offs; loss of or failure to obtain necessary permits and
registrations; continued or escalated conflict in the Middle East, North
Korea, Ukraine or
elsewhere; uncertainty regarding the exit of the U.K. from the
European Union; and/or unfavorable export or import markets. These
factors, coupled with volatile prices for natural gas and diesel
fuel, climate conditions, currency exchange fluctuations, general
performance of the U.S. and global economies, disturbances in world
financial, credit, commodities and stock markets, and any decline
in consumer confidence and discretionary spending, including the
inability of consumers and companies to obtain credit due to lack
of liquidity in the financial markets, among others, could cause
actual results to vary materially from the forward looking
statements included in this release or negatively impact the
Company's results of operations. Among other things, future
profitability may be affected by the Company's ability to grow its
business, which faces competition from companies that may have
substantially greater resources than the Company. The Company's
announced share repurchase program may be suspended or discontinued
at any time and purchases of shares under the program are subject
to market conditions and other factors, which are likely to change
from time to time. Other risks and uncertainties regarding Darling
Ingredients Inc., its business and the industries in which it
operates are referenced from time to time in the Company's filings
with the Securities and Exchange Commission. Darling
Ingredients Inc. is under no obligation to (and expressly disclaims
any such obligation to) update or alter its forward-looking
statements whether as a result of new information, future events or
otherwise.}
For More
Information, contact:
|
|
Jim Stark, Vice
President, Investor Relations
|
Email :
james.stark@darlingii.com
|
5601 MacArthur Blvd.,
Irving, Texas 75038
|
Phone :
972-281-4823
|
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SOURCE Darling Ingredients Inc.