Darling Ingredients Inc. Reports Second Quarter 2020 Financi

|Aug 5|magazine63 min read

IRVING, Texas, Aug. 5, 2020 /PRNewswire/ -- Darling Ingredients Inc. (NYSE: DAR, "Darling") --

Second Quarter 2020

  • Net income of $65.4 million, or $0.39 per GAAP diluted share
  • Net Sales of $848.7 million
  • Combined adjusted EBITDA of $195.2 million
  • Core business EBITDA of $126.1 million, $16 million better than Q1-2020; $24 million better than Q2-2019, excluding the $13.1 million gain on the sale of assets in Q2-2019
  • Diamond Green Diesel ("DGD") earned $1.91 EBITDA per gallon on approximately 72 million gallons sold
  • In July, Darling received an $80 million distribution from DGD, total distributions received in 2020 is $205 million

Darling reported net sales of $848.7 million for the second quarter of 2020, as compared with net sales of $827.3 million for the same period a year ago.  Net income attributable to Darling for the three months ended June 27, 2020 was $65.4 million, or $0.39 per diluted share, compared to a net income of $26.3 million, or $0.16 per diluted share, for the second quarter of 2019.

"We had another solid quarter of execution from our employees worldwide who delivered a strong second quarter financial performance, generating $195 million of combined adjusted EBITDA," said Randall C. Stuewe, Chairman and Chief Executive Officer of Darling Ingredients Inc. "Our core business navigated through a turbulent second quarter with our feed segment posting its best quarterly EBITDA of $85.2 million in over the last three years. We did benefit from over 40 million pounds of depopulated hog volumes through our processing locations during the quarter."

"Darling's diversification provides our global business platform earnings sustainability as demonstrated in the second quarter. Our DGD JV financial performance was impacted by the sharp decline in the energy sector as a result of the COVID pandemic, but still produced good results which were enhanced by a better performance in our feed segment. Excluding the gain on the sale of assets in the food segment from a year ago, this year's food segment performance was on par to 2019," added Stuewe.

"We did use the DGD distribution proceeds received in April to pay down our outstanding debt in the second quarter, lowering our leverage ratio to 2.39 as measured by our bank covenant. We remain diligent on our capital expenditures, investing approximately $123 million for the first six months of 2020. We continue to target a deferral of 15% to 20% in capital expenditures as the uncertainty surrounding COVID-19 persists," commented Stuewe.

The Darling Ingredients Board has approved replenishing the Company's previously announced share repurchase program back to $200 million of availability and have extended the term of the program for an additional two years to August 13, 2022, to be exercised depending on market conditions. The repurchases may be made from time to time on the open market at prevailing market prices or in negotiated transactions off the market. Repurchases may occur over the authorized period unless extended or shortened by the Board of Directors.

In accordance with the distribution policy at Diamond Green Diesel, Darling received an $80 million distribution from DGD in July 2020. Total distributions received in the first six months of 2020 total $205 million.

For the six months ended June 27, 2020, Darling reported net sales of $1.7 billion, as compared with net sales of $1.7 billion for the same period of 2019. Net Income attributable to Darling for the first six months of 2020 was $150.9 million, or $0.90 per diluted share, as compared to a net income of $44.3 million, or $0.26 per diluted share, for the first six months of 2019.

As of June 27, 2020, Darling had $76.2 million in cash and cash equivalents, and $939.7 million available under committed revolving credit agreements. Total debt outstanding at the end of the second quarter of 2020 was $1.6 billion.

Combined adjusted EBITDA was $195.2 million for the second quarter of 2020, compared to $159.4 million for the same period in 2019. On a year-to-date basis, combined adjusted EBITDA totaled $408.5 million for 2020, compared to $292.7 million on a year-to-date basis for 2019.



Segment Financial Tables (in thousands)


Three Months Ended June 27, 2020

Feed
Ingredients

Food
Ingredients

Fuel
Ingredients

Corporate

Total







Net Sales

$    503,690

$  278,934

$    66,049

$            -

$    848,673

Cost of sales and operating expenses

367,902

220,159

44,286

-

632,347

Gross Margin

$    135,788

$    58,775

$    21,763

$            -

$    216,326







Loss/(gain) on sale of assets

76

(48)

(1)

-

27

Selling, general and administrative expenses

50,484

22,564

3,953

13,192

90,193

Depreciation and amortization

52,683

19,972

7,980

2,675

83,310

Equity in net income of Diamond Green Diesel

-

-

63,492

-

63,492

Segment operating income/(loss)

$      32,545

$    16,287

$    73,323

$ (15,867)

$    106,288

Equity in net income of unconsolidated subsidiaries

$           692

$              -

$              -

$            -

$           692

Segment Income/(loss)

$      33,237

$    16,287

$    73,323

$ (15,867)

$    106,980







Segment EBITDA

$      85,228

$    36,259

$    17,811

$ (13,192)

$    126,106

DGD adjusted EBITDA (Darling's Share)

$                -

$              -

$    69,108

$            -

$      69,108

Combined adjusted EBITDA

$      85,228

$    36,259

$    86,919

$ (13,192)

$    195,214







Three Months Ended June 29, 2019

Feed
Ingredients

Food
Ingredients

Fuel
Ingredients

Corporate

Total







Net Sales

$    487,447

$  274,835

$    65,042

$            -

$    827,324

Cost of sales and operating expenses

376,955

214,444

53,317

-

644,716

Gross Margin

$    110,492

$    60,391

$    11,725

$            -

$    182,608







Gain on sale of assets

(524)

(13,379)

(23)

-

(13,926)

Selling, general and administrative expenses

46,465

23,431

425

10,696

81,017

Depreciation and amortization

48,720

19,861

8,362

2,543

79,486

Equity in net income of Diamond Green Diesel

-

-

38,093

-

38,093

Segment operating income/(loss)

$      15,831

$    30,478

$    41,054

$ (13,239)

$      74,124

Equity in net income of unconsolidated subsidiaries

$             82

$              -

$              -

$            -

$             82

Segment income/(loss)

$      15,913

$    30,478

$    41,054

$ (13,239)

$      74,206







Segment EBITDA

$      64,551

$    50,339

$    11,323

$ (10,696)

$    115,517

DGD adjusted EBITDA (Darling's Share)

$                -

$              -

$    43,894

$            -

$      43,894

Combined adjusted EBITDA

$      64,551

$    50,339

$    55,217

$ (10,696)

$    159,411








Segment Financial Tables (in thousands) continued


Six Months Ended June 27, 2020

Feed
Ingredients

Food
Ingredients

Fuel
Ingredients

Corporate

Total







Net Sales

$ 1,016,315

$  549,228

$  135,972

$            -

$ 1,701,515

Cost of sales and operating expenses

756,355

425,589

97,311

-

1,279,255

Gross Margin

$    259,960

$  123,639

$    38,661

$            -

$    422,260







Loss/(gain) on sale of assets

126

(46)

8

-

88

Selling, general and administrative expenses

104,431

48,040

5,607

28,308

186,386

Depreciation and amortization

106,204

40,277

16,072

5,428

167,981

Equity in net income of Diamond Green Diesel

-

-

161,312

-

161,312

Segment operating income/(loss)

$      49,199

$    35,368

$  178,286

$ (33,736)

$    229,117

Equity in net income of unconsolidated subsidiaries

$        1,561

$              -

$              -

$            -

$        1,561

Segment income/(loss)

$      50,760

$    35,368

$  178,286

$ (33,736)

$    230,678







Segment EBITDA

$    155,403

$    75,645

$    33,046

$ (28,308)

$    235,786

DGD adjusted EBITDA (Darling's Share)

$                -

$              -

$  172,742

$            -

$    172,742

Combined adjusted EBITDA

$    155,403

$    75,645

$  205,788

$ (28,308)

$    408,528







Six Months Ended June 29, 2019

Feed
Ingredients

Food
Ingredients

Fuel
Ingredients

Corporate

Total







Net Sales

$    983,266

$  553,999

$  125,163

$            -

$ 1,662,428

Cost of sales and operating expenses

763,814

428,448

103,367

-

1,295,629

Gross Margin

$    219,452

$  125,551

$    21,796

$            -

$    366,799







Loss/(gain) on sale of assets

(4,914)

(13,265)

3

-

(18,176)

Selling, general and administrative expenses

95,296

45,318

(329)

25,735

166,020

Depreciation and amortization

98,089

39,372

16,160

5,029

158,650

Equity in net income of Diamond Green Diesel

-

-

62,370

-

62,370

Segment operating income/(loss)

$      30,981

$    54,126

$    68,332

$ (30,764)

$    122,675

Equity in net loss of unconsolidated subsidiaries

$         (422)

$              -

$              -

$            -

$         (422)

Segment income/(loss)

$      30,559

$    54,126

$    68,332

$ (30,764)

$    122,253







Segment EBITDA

$    129,070

$    93,498

$    22,122

$ (25,735)

$    218,955

DGD adjusted EBITDA (Darling's Share)

$                -

$              -

$    73,721

$            -

73,721

Combined adjusted EBITDA

$    129,070

$    93,498

$    95,843

$ (25,735)

$    292,676




Darling Ingredients Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

June 27, 2020 and December 28, 2019

(in thousands)



June 27,


December 28,


2020


2019

ASSETS

(unaudited)



Current assets:




    Cash and cash equivalents

$       76,185


$          72,935

    Restricted cash

103


110

    Accounts receivable, net

375,908


406,338

    Inventories

394,708


362,957

    Prepaid expenses

46,003


46,599

    Income taxes refundable

3,752


3,317

    Other current assets

34,392


25,032

        Total current assets

931,051


917,288





Property, plant and equipment, net

1,773,329


1,802,411

Intangible assets, net

485,148


526,394

Goodwill

1,217,177


1,223,291

Investment in unconsolidated subsidiaries

729,094


689,354

Operating lease right-of-use assets

134,901


124,726

Other assets

41,651


47,400

Deferred income taxes

14,803


14,394


$  5,327,154


$     5,345,258

LIABILITIES AND STOCKHOLDERS' EQUITY




Current liabilities:




    Current portion of long-term debt

$       42,758


$          90,996

    Accounts payable, principally trade

197,528


239,252

    Income taxes payable

16,474


8,895

    Current operating lease liabilities

39,532


37,805

    Accrued expenses

310,004


311,391

        Total current liabilities

606,296


688,339

Long-term debt, net of current portion

1,553,118


1,558,429

Long-term operating lease liabilities

99,482


91,424

Other noncurrent liabilities

109,046


115,785

Deferred income taxes

260,858


247,931

        Total liabilities

2,628,800


2,701,908

Commitments and contingencies




Total Darling's stockholders' equity

2,633,360


2,565,819

Noncontrolling interests

64,994


77,531

        Total stockholders' equity

$  2,698,354


$     2,643,350


$  5,327,154


$     5,345,258




Darling Ingredients Inc. and Subsidiaries

Consolidated Operating Results

For the Three-Month and Six-Month Periods Ended June 27, 2020 and June 29, 2019

(in thousands, except per share data)

(unaudited)














Three Months Ended




Six Months Ended







$ Change








$ Change



June 27,


June 29,


Favorable




June 27,


June 29,


Favorable



2020


2019


(Unfavorable)




2020


2019


(Unfavorable)

Net sales

$ 848,673


$ 827,324


$          21,349




$ 1,701,515


$ 1,662,428


$          39,087

Costs and expenses:















Cost of sales and operating expenses

632,347


644,716


12,369




1,279,255


1,295,629


16,374


Loss (gain) on sale of assets

27


(13,926)


(13,953)




88


(18,176)


(18,264)


Selling, general and administrative expenses

90,193


81,017


(9,176)




186,386


166,020


(20,366)


Depreciation and amortization

83,310


79,486


(3,824)




167,981


158,650


(9,331)

Total costs and expenses

805,877


791,293


(14,584)




1,633,710


1,602,123


(31,587)


Equity in net income of Diamond Green Diesel

63,492


38,093


25,399




161,312


62,370


98,942

Operating income

106,288


74,124


32,164




229,117


122,675


106,442

Other expense:















Interest expense

(17,920)


(20,853)


2,933




(37,010)


(40,729)


3,719


Debt extinguishment costs

-


(12,126)


12,126




-


(12,126)


12,126


Foreign currency gain/(loss)

(1,134)


(388)


(746)




530


(1,120)


1,650


Other income (expense), net

(1,485)


(2,019)


534




(3,366)


(4,544)


1,178

Total other expense

(20,539)


(35,386)


14,847




(39,846)


(58,519)


18,673

Equity in net income/(loss) 














    of unconsolidated subsidiaries

692


82


610




1,561


(422)


1,983

Income before income taxes

86,441


38,820


47,621




190,832


63,734


127,098

Income tax expense

19,946


7,776


(12,170)




38,246


13,050


(25,196)

Net income

66,495


31,044


35,451




152,586


50,684


101,902

Net income attributable to















noncontrolling interests

(1,056)


(4,786)


3,730




(1,637)


(6,414)


4,777

Net income attributable to Darling

$   65,439


$   26,258


$          39,181




$    150,949


$      44,270


$        106,679
















Basic income per share:

$       0.40


$       0.16


$              0.24




$          0.93


$          0.27


$              0.66

Diluted income per share:

$       0.39


$       0.16


$              0.23




$          0.90


$          0.26


$              0.64
















Number of diluted common shares:

165,999


168,432






166,963


168,546






Darling Ingredients Inc. and Subsidiaries

Consolidated Statement of Cash Flows

Periods Ended June 27, 2020 and June 29, 2019

(in thousands)

(unaudited)






Six Months Ended





June 27,


June 29,

Cash flows from operating activities:

2020


2019


Net income


$  152,586


$     50,684


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






Depreciation and amortization

167,981


158,650



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

88


(18,176)



Gain on insurance proceeds from insurance settlement

-


(845)



Deferred taxes


13,998


(3,137)



Increase (decrease) in long-term pension liability

(890)


1,010



Stock-based compensation expense

15,566


14,182



Write-off deferred loan costs

-


4,547



Deferred loan cost amortization

2,835


3,010



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

(162,873)


(61,948)



Distributions of earnings from Diamond Green Diesel and other unconsolidated subsidiaries

125,891


17,755



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






     Accounts receivable

26,077


27,218



     Income taxes refundable/payable

6,119


7,140



     Inventories and prepaid expenses

(35,413)


(17,374)



     Accounts payable and accrued expenses

(33,375)


(29,849)



     Other


(14,941)


1,437




Net cash provided by operating activities

263,649


154,304

Cash flows from investing activities:





Capital expenditures

(123,204)


(167,871)


Acquisitions, net of cash acquired

-


(1,431)


Investment in unconsolidated subsidiary

-


(1,000)


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

1,053


9,814


Proceeds from insurance settlement

-


845


Payments related to routes and other intangibles

(3,712)


(3,150)




Net cash used by investing activities

(125,863)


(162,793)

Cash flows from financing activities:





Proceeds from long-term debt

16,164


507,722


Payments on long-term debt

(18,239)


(526,230)


Borrowings from revolving credit facility

375,971


273,485


Payments on revolving credit facility

(405,800)


(266,884)


Net cash overdraft financing

(26,461)


11,178


Deferred loan costs


-


(7,003)


Issuance of common stock

67


12


Repurchase of common stock

(55,044)


-


Minimum withholding taxes paid on stock awards

(4,863)


(3,193)


Acquisition of noncontrolling interest

(8,784)


-


Distributions to noncontrolling interests

(987)


-




Net cash used by financing activities

(127,976)


(10,913)

Effect of exchange rate changes on cash flows

(6,567)


(853)

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

3,243


(20,255)

Cash, cash equivalents and restricted cash at beginning of year

73,045


107,369

Cash, cash equivalents and restricted cash at end of period

$     76,288


$     87,114

Supplemental disclosure of cash flow information:





Accrued capital expenditures

$               23


$      (7,542)


Cash paid during the period for:






Interest, net of capitalized interest

$     35,070


$     45,196



Income taxes, net of refunds

$     18,030


$     12,607


Non-cash operating activities:






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

$     28,801


$        7,492


Non-cash financing activities:






Debt issued for service contract assets

$               21


$                    -




Diamond Green Diesel Joint Venture

Condensed Consolidated Balance Sheets

June 30, 2020 and December 31, 2019

(in thousands)






June 30,


December 31,





2020


2019

Assets:



 (unaudited) 




Total current assets


$        581,334


$       668,026


Property, plant and equipment, net


894,415


713,489


Other assets


27,959


30,710



Total assets


$     1,503,708


$    1,412,225








Liabilities and members' equity:






Total current portion of long term debt


$               495


$              341


Total other current liabilities


89,533


75,802


Total long term debt


8,969


8,742


Total other long term liabilities


4,023


4,422


Total members' equity


1,400,688


1,322,918



Total liabilities and members' equity


$     1,503,708


$    1,412,225




Diamond Green Diesel Joint Venture

Operating Financial Results

For the Three-Month and Six-Month Periods Ended June 30, 2020 and June 30, 2019

(in thousands)

(unaudited)















Three Months Ended



Six Months Ended








$ Change







$ Change




June 30,


June 30,


Favorable



June 30,


June 30,


Favorable

Revenues:

2020


2019


(Unfavorable)



2020


2019


(Unfavorable)


Operating revenues

$        295,826


$        294,811


$            1,015



$        654,441


$        597,529


$          56,912

Expenses:














Total costs and expenses less















depreciation, amortization and accretion expense

157,611


207,024


49,413



308,958


450,087


141,129


Depreciation, amortization and

11,114


11,914


800



22,888


23,332


444



accretion expense













Total costs and expenses

168,725


218,938


50,213



331,846


473,419


141,573


Operating income 

127,101


75,873


51,228



322,595


124,110


198,485

Other income

200


634


(434)



661


1,275


(614)



Interest and debt expense, net

(317)


(321)


4



(632)


(645)


13



Net income 

$        126,984


$          76,186


$          50,798



$        322,624


$        124,740


$        197,884

 

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 Six-Month Periods Ended June 27, 2020 and June 29, 2019




Three Months Ended



Six Months Ended 

Adjusted EBITDA 

June 27,


June 29,



June 27,


June 29,

(U.S. dollars in thousands)

2020


2019



2020


2019











Net income attributable to Darling

$          65,439


$          26,258



$       150,949


$          44,270

Depreciation and amortization

83,310


79,486



167,981


158,650

Interest expense

17,920


20,853



37,010


40,729

Income tax expense

19,946


7,776



38,246


13,050

Foreign currency loss/(gain)

1,134


388



(530)


1,120

Other expense, net

1,485


2,019



3,366


4,544

Debt extinguishment costs

-


12,126



-


12,126

Equity in net (income) of Diamond Green Diesel

(63,492)


(38,093)



(161,312)


(62,370)

Equity in net (income)/loss of unconsolidated subsidiaries

(692)


(82)



(1,561)


422

Net income attributable to noncontrolling interests

1,056


4,786



1,637


6,414

    Adjusted EBITDA (Non-GAAP)

$       126,106


$       115,517



$       235,786


$       218,955

Foreign currency exchange impact 

1,951

(1)

-



4,109

(2)

-

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

$       128,057


$       115,517



$       239,895


$       218,955

DGD Joint Venture Adjusted EBITDA (Darling's Share)

$          69,108


$          43,894



$       172,742


$          73,721











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

$       195,214


$       159,411



$       408,528


$       292,676












(1) The average rate assumption used in this calculation was the actual fiscal average rate for the three months ended June 27, 2020 of €1.00:USD$1.10 and CAD$1.00:USD$0.72, as compared to the average rate for the three months ended June 29, 2019 of  €1.00:USD$1.12 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 six months ended June 27, 2020 of €1.00:USD$1.10 and CAD$1.00:USD$0.73, as compared to the average rate for the six months ended June 29, 2019 of  €1.00:USD$1.13 and CAD$1.00:USD$0.75, respectively.

For the three and six months ended June 29, 2019, Adjusted EBITDA included a gain on the sale of assets of approximately $13.1 million

About Darling

Darling Ingredients Inc. is a global developer and producer of sustainable natural ingredients from edible and inedible bio-nutrients, creating a wide range of ingredients and specialty solutions for customers in the pharmaceutical, food, pet food, feed, technical, fuel, bioenergy, and fertilizer industries.  With operations on five continents, the Company collects and transforms all aspects of animal by-product streams into useable and specialty ingredients, such as collagen, edible fats, feed-grade fats, animal proteins and meals, plasma, pet food ingredients, organic fertilizers, yellow grease, fuel feedstocks, green energy, natural casings and hides.  The Company also recovers and converts recycled oils (used cooking oil and animal fats) into valuable feed and fuel ingredients and collects and processes residual bakery products into feed ingredients. In addition, the Company provides environmental services, such as grease trap collection and disposal services to food service establishments. The Company sells its products domestically and internationally and operates within three industry segments: Feed Ingredients, Food Ingredients and Fuel Ingredients. For additional information, visit the Company's website at http://www.darlingii.com.

Darling Ingredients Inc. will host a conference call to discuss the Company's second quarter 2020 financial results at 9:00 am Eastern Time (8:00 am Central Time) on Thursday, August 6, 2020.  To listen to the conference call, participants calling from within North America should dial 1-844-868-8847; international participants should dial 1-412-317-6593.  Please refer to access code 10146331. 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 August 13, 2020, by dialing 1-877-344-7529 (U.S. callers), 1-855-669-9658 (Canada) and 1-412-317-0088 (international callers).  The access code for the replay is 10146331.  The conference call will also be archived on the Company's website.

Use of Non-GAAP Financial Measures:

Adjusted EBITDA is not a recognized accounting measurement under GAAP; it should not be considered as an alternative to net income, as a measure of operating results, or as an alternative to cash flow as a measure of liquidity and is not intended to be a presentation in accordance with GAAP.  Adjusted EBITDA is presented here not as an alternative to net income, but rather as a measure of the Company's operating performance. Since EBITDA (generally, net income plus interest expenses, taxes, depreciation and amortization) is not calculated identically by all companies, this presentation may not be comparable to EBITDA or Adjusted EBITDA presentations disclosed by other companies. Adjusted EBITDA is calculated in this presentation and represents, for any relevant period, net income/(loss) plus depreciation and amortization, goodwill and long-lived asset impairment, interest expense, (income)/loss from discontinued operations, net of tax, income tax provision, other income/(expense) and equity in net loss of unconsolidated subsidiary. Management believes that Adjusted EBITDA is useful in evaluating the Company's operating performance compared to that of other companies in its industry because the calculation of Adjusted EBITDA generally eliminates the effects of financing, income taxes and certain non-cash and other items that may vary for different companies for reasons unrelated to overall operating performance.

As a result, the Company's management uses Adjusted EBITDA as a measure to evaluate performance and for other discretionary purposes. In addition to the foregoing, management also uses or will use Adjusted EBITDA to measure compliance with certain financial covenants under the Company's Senior Secured Credit Facilities and 5.25% Notes and 3.625% Notes that were outstanding at June 27, 2020. However, the amounts shown in this presentation for Adjusted EBITDA differ from the amounts calculated under similarly titled definitions in the Company's Senior Secured Credit Facilities and 5.25% Notes and 3.625% Notes, as those definitions permit further adjustments to reflect certain other non-recurring costs, non-cash charges and cash dividends from the DGD Joint Venture. Additionally, the Company evaluates the impact of foreign exchange impact on operating cash flow, which is defined as segment operating income (loss) plus depreciation and amortization.

Cautionary Statements Regarding Forward-Looking Information:

{This media release contains "forward-looking" statements regarding the business operations and prospects of Darling Ingredients Inc. and industry factors affecting it. These statements are identified by words such as "believe," "anticipate," "expect," "estimate," "intend," "could," "may," "will," "should," "planned," "potential," "continue," "momentum," and other words referring to events that may occur in the future.  These statements reflect Darling Ingredient's current view of future events and are based on its assessment of, and are subject to, a variety of risks and uncertainties beyond its control, each of which could cause actual results to differ materially from those indicated in the forward-looking statements.  These factors include, among others, existing and unknown future limitations on the ability of the Company's direct and indirect subsidiaries to make their cash flow available to the Company for payments on the Company's indebtedness or other purposes; global demands for bio-fuels and grain and oilseed commodities, which have exhibited volatility, and can impact the cost of feed for cattle, hogs and poultry, thus affecting available rendering feedstock and selling prices for the Company's products; reductions in raw material volumes available to the Company due to weak margins in the meat production industry as a result of higher feed costs, reduced consumer demand or other factors, reduced volume from food service establishments, or otherwise; reduced demand for animal feed; reduced finished product prices, including a decline in fat and used cooking oil finished product prices; changes to worldwide government policies relating to renewable fuels and greenhouse gas("GHG") emissions that adversely affect programs like the U.S. government's renewable fuel standard, low carbon fuel standards ("LCFS") and tax credits for biofuels both in the 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 : [email protected]

5601 MacArthur Blvd., Irving, Texas 75038

 Phone : 972-281-4823

 

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SOURCE Darling Ingredients Inc.