Fiscal Year 2023 Highlights
- Net income of $647.7 million, or
$3.99 per GAAP diluted share
- Net sales of $6.8 billion
- Combined adjusted EBITDA of $1,611.9
million
- Global ingredients business EBITDA of $1,109.9 million
- Received $163.6 million in cash
dividends from Diamond Green
Diesel
- Repurchased $52.9 million of
common stock
IRVING,
Texas, Feb. 27, 2024 /PRNewswire/ -- Darling
Ingredients Inc. (NYSE: DAR) today reported net income of
$84.5 million, or $0.52 per diluted share for fourth quarter of
2023, compared to net income of $156.6
million, or $0.96 per diluted
share, for fourth quarter of 2022. The decrease in net income was
primarily due to a decrease in Darling's share of Diamond Green Diesel (DGD) earnings. The company
also reported net sales of $1.6
billion for the fourth quarter of 2023, compared with net
sales of $1.8 billion for the same
period a year ago.
For the fiscal year ended Dec. 30,
2023, Darling Ingredients reported net sales of $6.8 billion, compared to net sales of
$6.5 billion for fiscal year 2022.
Net income for fiscal year 2023 was $647.7
million, or $3.99 per diluted
share, as compared to net income of $737.7
million, or $4.49 per diluted
share in fiscal year 2022.
"Darling Ingredients had another great year with its
6th record year of growth in volumes and combined
adjusted EBITDA," said Randall C.
Stuewe, Darling Ingredients Chairman and Chief Executive
Officer. "Our vertically integrated business continues to
demonstrate that Darling Ingredients can deliver strong earnings
that offsets commodity volatility."
DGD sold 336.6 million gallons of renewable diesel for the
fourth quarter 2023 at an average of $0.23 per gallon EBITDA. In 2023, DGD sold 1.2
billion gallons of renewable diesel at an average of $0.81 per gallon EBITDA. Darling Ingredients
received a total of $163.6 million in
cash dividends from the joint venture in 2023.
Combined adjusted EBITDA for the fourth quarter 2023 was
$350.9 million, compared to
$413.0 million for the same period in
2022. Combined adjusted EBITDA for fiscal year 2023 totaled
$1.61 billion, as compared to
$1.54 billion in fiscal year
2022.
As of Dec. 30, 2023, Darling
Ingredients had $126.5 million in
cash and cash equivalents, and $832.5
million available under its committed revolving credit
agreement. Total debt outstanding as of Dec.
30, 2023, was $4.4 billion.
The leverage ratio as measured by the company's bank covenant was
3.26X as of Dec. 30, 2023. Capital
expenditures were $174.9 million for
the fourth quarter 2023, and $555.5
million for fiscal year 2023.
"Darling Ingredients is committed to continuing to drive
shareholder results. We have built a strong business and remain
optimistic on a strong performance in 2024," Stuewe said.
Segment Financial Tables (in thousands)
|
Feed
Ingredients
|
Food
Ingredients
|
Fuel
Ingredients
|
Corporate
|
Total
|
Three Months Ended
December 30, 2023 (unaudited)
|
|
|
|
|
|
Net sales
|
$
1,045,642
|
$
423,836
|
$
144,605
|
$
-
|
$
1,614,083
|
Cost of sales and
operating expenses
|
755,062
|
311,163
|
111,427
|
-
|
1,177,652
|
Gross Margin
|
290,580
|
112,673
|
33,178
|
-
|
436,431
|
|
|
|
|
|
|
Loss (gain) on sale of
assets
|
1
|
(8,243)
|
(40)
|
-
|
(8,282)
|
Selling, general and
administrative expenses
|
77,281
|
30,195
|
6,714
|
18,430
|
132,620
|
Restructuring and asset
impairment charges
|
3,934
|
9,199
|
-
|
-
|
13,133
|
Acquisition and
integration costs
|
-
|
-
|
-
|
1,726
|
1,726
|
Change in fair value of
contingent consideration
|
5,167
|
-
|
-
|
-
|
5,167
|
Depreciation and
amortization
|
98,400
|
26,655
|
8,480
|
4,394
|
137,929
|
Equity in net income of
Diamond Green Diesel
|
-
|
-
|
4,690
|
-
|
4,690
|
Segment operating
income/(loss)
|
$
105,797
|
$
54,867
|
$
22,714
|
$
(24,550)
|
$
158,828
|
Equity in net income of
other unconsolidated subsidiaries
|
1,508
|
-
|
-
|
-
|
1,508
|
Segment
income/(loss)
|
$
107,305
|
$
54,867
|
$
22,714
|
$
(24,550)
|
$
160,336
|
|
|
|
|
|
|
Segment
EBITDA
|
$
213,298
|
$
90,721
|
$
26,504
|
$
(18,430)
|
$
312,093
|
DGD adjusted EBITDA
(Darling's Share)
|
-
|
-
|
38,816
|
-
|
38,816
|
Combined adjusted
EBITDA
|
$
213,298
|
$
90,721
|
$
65,320
|
$
(18,430)
|
$
350,909
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Feed
Ingredients
|
Food
Ingredients
|
Fuel
Ingredients
|
Corporate
|
Total
|
Three Months Ended
December 31, 2022
|
|
|
|
|
|
Net sales
|
$
1,216,073
|
$
387,733
|
$
164,277
|
$
-
|
$
1,768,083
|
Cost of sales and
operating expenses
|
950,778
|
294,417
|
134,093
|
-
|
1,379,288
|
Gross Margin
|
265,295
|
93,316
|
30,184
|
-
|
388,795
|
|
|
|
|
|
|
Loss (gain) on sale of
assets
|
169
|
(117)
|
14
|
-
|
66
|
Selling, general and
administrative expenses
|
73,736
|
28,073
|
3,769
|
16,142
|
121,720
|
Restructuring and asset
impairment charges
|
-
|
21,109
|
-
|
-
|
21,109
|
Acquisition and
integration costs
|
-
|
-
|
-
|
2,738
|
2,738
|
Depreciation and
amortization
|
91,282
|
14,722
|
8,606
|
2,774
|
117,384
|
Equity in net income of
Diamond Green Diesel
|
-
|
-
|
123,448
|
-
|
123,448
|
Segment operating
income/(loss)
|
$
100,108
|
$
29,529
|
$
141,243
|
$
(21,654)
|
$
249,226
|
Equity in net loss of
other unconsolidated subsidiaries
|
(831)
|
-
|
-
|
-
|
(831)
|
Segment
income/(loss)
|
$
99,277
|
$
29,529
|
$
141,243
|
$
(21,654)
|
$
248,395
|
|
|
|
|
|
|
Segment
EBITDA
|
$
191,390
|
$
65,360
|
$
26,401
|
$
(16,142)
|
$
267,009
|
DGD adjusted EBITDA
(Darling's Share)
|
-
|
-
|
145,984
|
-
|
145,984
|
Combined adjusted
EBITDA
|
$
191,390
|
$
65,360
|
$
172,385
|
$
(16,142)
|
$
412,993
|
Segment Financial Tables (in thousands)
|
Feed
Ingredients
|
Food
Ingredients
|
Fuel
Ingredients
|
Corporate
|
Total
|
Twelve Months Ended
December 30, 2023 (unaudited)
|
|
|
|
|
|
Net sales
|
$
4,472,592
|
$
1,752,065
|
$
563,423
|
$
-
|
$
6,788,080
|
Cost of sales and
operating expenses
|
3,385,859
|
1,310,581
|
446,620
|
-
|
5,143,060
|
Gross Margin
|
1,086,733
|
441,484
|
116,803
|
-
|
1,645,020
|
|
|
|
|
|
|
Loss (gain) on sale of
assets
|
814
|
(8,144)
|
(91)
|
-
|
(7,421)
|
Selling, general and
administrative expenses
|
310,363
|
128,464
|
23,543
|
80,164
|
542,534
|
Restructuring and asset
impairment charges
|
4,026
|
14,527
|
-
|
-
|
18,553
|
Acquisition and
integration costs
|
-
|
-
|
-
|
13,884
|
13,884
|
Change in fair value of
contingent consideration
|
(7,891)
|
|
|
|
(7,891)
|
Depreciation and
amortization
|
360,249
|
94,991
|
34,466
|
12,309
|
502,015
|
Equity in net income of
Diamond Green Diesel
|
-
|
-
|
366,380
|
-
|
366,380
|
Segment operating
income/(loss)
|
$
419,172
|
$
211,646
|
$
425,265
|
$
(106,357)
|
$
949,726
|
Equity in net income of
other unconsolidated subsidiaries
|
5,011
|
-
|
-
|
-
|
5,011
|
Segment
income/(loss)
|
$
424,183
|
$
211,646
|
$
425,265
|
$
(106,357)
|
$
954,737
|
|
|
|
|
|
|
Segment
EBITDA
|
$
775,556
|
$
321,164
|
$
93,351
|
$
(80,164)
|
$
1,109,907
|
DGD adjusted EBITDA
(Darling's Share)
|
-
|
-
|
501,987
|
-
|
501,987
|
Combined adjusted
EBITDA
|
$
775,556
|
$
321,164
|
$
595,338
|
$
(80,164)
|
$
1,611,894
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Feed
Ingredients
|
Food
Ingredients
|
Fuel
Ingredients
|
Corporate
|
Total
|
Twelve Months Ended
December 31, 2022
|
|
|
|
|
|
Net sales
|
$
4,539,000
|
$
1,459,630
|
$
533,574
|
$
-
|
$
6,532,204
|
Cost of sales and
operating expenses
|
3,473,506
|
1,102,250
|
426,853
|
-
|
5,002,609
|
Gross Margin
|
1,065,494
|
357,380
|
106,721
|
-
|
1,529,595
|
|
|
|
|
|
|
Gain on sale of
assets
|
(3,426)
|
(1,008)
|
(60)
|
-
|
(4,494)
|
Selling, general and
administrative expenses
|
258,781
|
101,681
|
13,690
|
62,456
|
436,608
|
Restructuring and asset
impairment charges
|
8,557
|
21,109
|
-
|
-
|
29,666
|
Acquisition and
integration costs
|
-
|
-
|
-
|
16,372
|
16,372
|
Depreciation and
amortization
|
295,249
|
59,029
|
29,500
|
10,943
|
394,721
|
Equity in net income of
Diamond Green Diesel
|
-
|
-
|
372,346
|
-
|
372,346
|
Segment operating
income/(loss)
|
$
506,333
|
$
176,569
|
$
435,937
|
$
(89,771)
|
$
1,029,068
|
Equity in net income of
other unconsolidated subsidiaries
|
5,102
|
-
|
-
|
-
|
5,102
|
Segment
income/(loss)
|
$
511,435
|
$
176,569
|
$
435,937
|
$
(89,771)
|
$
1,034,170
|
|
|
|
|
|
|
Segment
EBITDA
|
$
810,139
|
$
256,707
|
$
93,091
|
$
(62,456)
|
$
1,097,481
|
DGD adjusted EBITDA
(Darling's Share)
|
-
|
-
|
443,487
|
-
|
443,487
|
Combined adjusted
EBITDA
|
$
810,139
|
$
256,707
|
$
536,578
|
$
(62,456)
|
$
1,540,968
|
Segment EBITDA consists of segment income (loss), less equity in
net income/loss from unconsolidated subsidiaries, less equity in
net income of Diamond Green Diesel,
plus depreciation and amortization, acquisition and integration
costs, restructuring and asset impairment charges, change in fair
value of contingent consideration, plus Darling's share of DGD
Adjusted EBITDA.
Darling Ingredients
Inc. and Subsidiaries
|
Consolidated Balance
Sheets
|
December 30, 2023
and December 31, 2022
|
|
|
|
|
|
|
|
|
|
|
December 30,
2023
|
December 31,
2022
|
ASSETS
|
|
(unaudited)
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
|
$
126,502
|
$
127,016
|
Restricted
cash
|
|
292
|
315
|
Accounts receivable,
net
|
|
626,008
|
559,695
|
Accounts receivable due
from related party -
Diamond Green Diesel
|
|
172,283
|
116,878
|
Inventories
|
|
758,739
|
673,621
|
Prepaid
expenses
|
|
105,657
|
85,665
|
Income taxes
refundable
|
|
23,599
|
18,583
|
Other current
assets
|
|
42,586
|
56,324
|
Total current
assets
|
|
1,855,666
|
1,638,097
|
|
|
|
|
Property, plant and
equipment, net
|
|
2,935,185
|
2,462,082
|
Intangible assets,
net
|
|
1,075,892
|
865,122
|
Goodwill
|
|
2,484,502
|
1,970,377
|
Investment in
unconsolidated subsidiaries
|
|
2,251,629
|
1,926,395
|
Operating lease
right-of-use assets
|
|
205,539
|
186,141
|
Other assets
|
|
234,960
|
136,268
|
Deferred income
taxes
|
|
17,711
|
17,888
|
|
|
$
11,061,084
|
$
9,202,370
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Current portion of
long-term debt
|
|
$
60,703
|
$
69,846
|
Accounts payable,
principally trade
|
|
425,588
|
472,491
|
Income taxes
payable
|
|
15,522
|
44,851
|
Current operating lease
liabilities
|
|
55,325
|
49,232
|
Accrued
expenses
|
|
440,999
|
432,023
|
Total current
liabilities
|
|
998,137
|
1,068,443
|
Long-term debt, net of
current portion
|
|
4,366,370
|
3,314,969
|
Long-term operating
lease liabilities
|
|
154,903
|
141,703
|
Other non-current
liabilities
|
|
349,809
|
298,933
|
Deferred income
taxes
|
|
498,174
|
481,832
|
Total
liabilities
|
|
6,367,393
|
5,305,880
|
Commitments and
contingencies
|
|
|
|
Stockholders'
equity:
|
|
|
|
Common stock, $0.01 par
value;
|
|
1,744
|
1,736
|
Additional paid-in capital
|
|
1,697,787
|
1,660,084
|
Treasury stock, at
cost
|
|
(629,008)
|
(554,451)
|
Accumulated other comprehensive loss
|
|
(198,346)
|
(383,874)
|
Retained earnings
|
|
3,733,254
|
3,085,528
|
Total Darling's
stockholders' equity
|
|
4,605,431
|
3,809,023
|
Noncontrolling
interests
|
|
88,260
|
87,467
|
Total Stockholders'
Equity
|
|
4,693,691
|
3,896,490
|
|
|
$
11,061,084
|
$
9,202,370
|
Darling
Ingredients Inc. and Subsidiaries
Consolidated
Operating Results
For the Three and
Twelve Months Ended Dec. 30, 2023 and Dec. 31, 2022
(in thousands,
except per share
data)
|
|
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
|
(unaudited)
|
|
$ Change
|
|
(unaudited)
|
|
$ Change
|
|
|
December 30,
|
|
December 31,
|
|
Favorable
|
|
December 30,
|
|
December 31,
|
|
Favorable
|
|
|
2023
|
|
2022
|
|
(Unfavorable)
|
|
2023
|
|
2022
|
|
(Unfavorable)
|
Net sales
|
$
1,614,083
|
|
$ 1,768,083
|
|
$ (154,000)
|
|
$
6,788,080
|
|
$
6,532,204
|
|
$
255,876
|
Costs and
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales and
operating expenses
|
1,177,652
|
|
1,379,288
|
|
201,636
|
|
5,143,060
|
|
5,002,609
|
|
(140,451)
|
|
(Gain) loss on sale of
assets
|
(8,282)
|
|
66
|
|
8,348
|
|
(7,421)
|
|
(4,494)
|
|
2,927
|
|
Selling, general and
administrative expenses
|
132,620
|
|
121,720
|
|
(10,900)
|
|
542,534
|
|
436,608
|
|
(105,926)
|
|
Restructuring and asset
impairment charges
|
13,133
|
|
21,109
|
|
7,976
|
|
18,553
|
|
29,666
|
|
11,113
|
|
Acquisition and
integration costs
|
1,726
|
|
2,738
|
|
1,012
|
|
13,884
|
|
16,372
|
|
2,488
|
|
Change in fair value of
contingent consideration
|
5,167
|
|
-
|
|
(5,167)
|
|
(7,891)
|
|
-
|
|
7,891
|
|
Depreciation and
amortization
|
137,929
|
|
117,384
|
|
(20,545)
|
|
502,015
|
|
394,721
|
|
(107,294)
|
Total costs and
expenses
|
1,459,945
|
|
1,642,305
|
|
182,360
|
|
6,204,734
|
|
5,875,482
|
|
(329,252)
|
|
Equity in net income of
Diamond Green Diesel
|
4,690
|
|
123,448
|
|
(118,758)
|
|
366,380
|
|
372,346
|
|
(5,966)
|
Operating
income
|
158,828
|
|
249,226
|
|
(90,398)
|
|
949,726
|
|
1,029,068
|
|
(79,342)
|
Other
expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
(68,453)
|
|
(46,139)
|
|
(22,314)
|
|
(259,223)
|
|
(125,566)
|
|
(133,657)
|
|
Foreign currency gain
(loss)
|
(206)
|
|
(5,272)
|
|
5,066
|
|
8,133
|
|
(11,277)
|
|
19,410
|
|
Other income (expense),
net
|
2,825
|
|
242
|
|
2,583
|
|
16,310
|
|
(3,609)
|
|
19,919
|
Total other
expense
|
(65,834)
|
|
(51,169)
|
|
(14,665)
|
|
(234,780)
|
|
(140,452)
|
|
(94,328)
|
Equity in net income
(loss)
|
|
|
|
|
|
|
|
|
|
|
|
of
other unconsolidated subsidiaries
|
1,508
|
|
(831)
|
|
2,339
|
|
5,011
|
|
5,102
|
|
(91)
|
Income from operations
before income taxes
|
94,502
|
|
197,226
|
|
(102,724)
|
|
719,957
|
|
893,718
|
|
(173,761)
|
Income tax
expense
|
7,246
|
|
37,995
|
|
30,749
|
|
59,568
|
|
146,626
|
|
87,058
|
Net income
|
87,256
|
|
159,231
|
|
(71,975)
|
|
660,389
|
|
747,092
|
|
(86,703)
|
Net income attributable
to
|
|
|
|
|
|
|
|
|
|
|
|
|
noncontrolling
interests
|
(2,740)
|
|
(2,671)
|
|
(69)
|
|
(12,663)
|
|
(9,402)
|
|
(3,261)
|
Net income attributable
to Darling
|
$
84,516
|
|
$
156,560
|
|
$
(72,044)
|
|
$
647,726
|
|
$
737,690
|
|
$
(89,964)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic income per
share:
|
$
0.53
|
|
$
0.98
|
|
$
(0.45)
|
|
$
4.05
|
|
$
4.58
|
|
$
(0.53)
|
Diluted income per
share:
|
$
0.52
|
|
$
0.96
|
|
$
(0.44)
|
|
$
3.99
|
|
$
4.49
|
|
$
(0.50)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of diluted
common shares:
|
161,935
|
|
163,504
|
|
|
|
162,387
|
|
164,121
|
|
|
Darling Ingredients
Inc. and Subsidiaries
|
Consolidated
Statement of Cash Flows
|
For the Twelve
Months Ended December 30, 2023 and December 31, 2022
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months
Ended
|
|
|
|
|
|
(unaudited)
December 30,
|
|
December 31,
|
|
Cash flows from
operating activities:
|
2023
|
|
2022
|
|
|
Net income
|
|
$ 660,389
|
|
$
747,092
|
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
|
Depreciation and
amortization
|
502,015
|
|
394,721
|
|
|
|
Gain on sale of
assets
|
(7,421)
|
|
(4,494)
|
|
|
|
Asset
impairment
|
4,734
|
|
29,666
|
|
|
|
Deferred
taxes
|
|
(22,241)
|
|
46,734
|
|
|
|
Change in fair value of
contingent consideration
|
(7,891)
|
|
-
|
|
|
|
Decrease in long-term
pension liability
|
(1,040)
|
|
(7,037)
|
|
|
|
Stock-based
compensation expense
|
33,156
|
|
25,005
|
|
|
|
Write-off deferred loan
costs
|
653
|
|
-
|
|
|
|
Deferred loan cost
amortization
|
6,216
|
|
4,984
|
|
|
|
Equity in net income of
Diamond Green Diesel and other unconsolidated
subsidiaries
|
(371,391)
|
|
(377,448)
|
|
|
|
Distributions of
earnings from Diamond Green Diesel and other unconsolidated
subsidiaries
|
168,277
|
|
95,546
|
|
|
|
Changes in operating
assets and liabilities, net of effects from
acquisitions:
|
|
|
|
|
|
|
Accounts
receivable
|
(10,832)
|
|
(56,543)
|
|
|
|
Income taxes
refundable/payable
|
(39,933)
|
|
(3,495)
|
|
|
|
Inventories and prepaid
expenses
|
49,582
|
|
(130,170)
|
|
|
|
Accounts payable and accrued
expenses
|
(82,939)
|
|
65,936
|
|
|
|
Other
|
|
17,929
|
|
(16,758)
|
|
|
|
|
Net cash provided by
operating activities
|
899,263
|
|
813,739
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
Capital
expenditures
|
(555,480)
|
|
(391,309)
|
|
|
Acquisitions, net of
cash acquired
|
(1,093,183)
|
|
(1,772,437)
|
|
|
Investment in Diamond
Green Diesel
|
(75,000)
|
|
(264,750)
|
|
|
Investment in other
unconsolidated subsidiaries
|
(27)
|
|
-
|
|
|
Loan to Diamond Green
Diesel
|
-
|
|
(50,000)
|
|
|
Loan repayment from
Diamond Green Diesel
|
25,000
|
|
50,000
|
|
|
Gross proceeds from
sale of property, plant and equipment and other assets
|
10,748
|
|
13,442
|
|
|
Proceeds from insurance
settlement
|
14,014
|
|
-
|
|
|
Payments related to
routes and other intangibles
|
(1,524)
|
|
(1,492)
|
|
|
|
|
Net cash used in
investing activities
|
(1,675,452)
|
|
(2,416,546)
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
Proceeds from long-term
debt
|
817,101
|
|
1,934,885
|
|
|
Payments on long-term
debt
|
(319,367)
|
|
(63,078)
|
|
|
Borrowings from
revolving credit facility
|
2,666,360
|
|
1,873,795
|
|
|
Payments on revolving
credit facility
|
(2,194,902)
|
|
(1,897,280)
|
|
|
Net cash overdraft
financing
|
(9,780)
|
|
24,069
|
|
|
Acquisition hold-back
payments
|
(3,793)
|
|
-
|
|
|
Deferred loan
costs
|
(9)
|
|
(16,780)
|
|
|
Repurchase of common
stock
|
(52,941)
|
|
(125,531)
|
|
|
Minimum withholding
taxes paid on stock awards
|
(17,296)
|
|
(46,944)
|
|
|
Distributions to
noncontrolling interests
|
(9,081)
|
|
(4,532)
|
|
|
|
|
Net cash provided by
financing activities
|
876,292
|
|
1,678,604
|
|
Effect of exchange rate
changes on cash flows
|
14,179
|
|
5,299
|
|
Net increase in cash,
cash equivalents and restricted cash
|
114,282
|
|
81,096
|
|
Cash, cash equivalents
and restricted cash at beginning of period
|
150,168
|
|
69,072
|
|
Cash, cash equivalents
and restricted cash at end of period
|
$ 264,450
|
|
$
150,168
|
|
Diamond Green Diesel
Joint Venture
|
Condensed Consolidated Balance Sheets
|
December 31, 2023
and December 31, 2022
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
December
31,
|
|
|
|
|
|
2023
|
|
2022
|
|
Assets:
|
|
|
|
|
|
|
|
Total current
assets
|
|
$ 1,877,430
|
|
$ 1,304,805
|
|
|
Property, plant and
equipment, net
|
|
3,838,800
|
|
3,866,854
|
|
|
Other assets
|
|
89,697
|
|
61,665
|
|
|
|
Total assets
|
|
$ 5,805,927
|
|
$ 5,233,324
|
|
|
|
|
|
|
|
|
|
Liabilities and
members' equity:
|
|
|
|
|
|
|
Total current portion
of long term debt
|
|
$
278,639
|
|
$
217,066
|
|
|
Total other current
liabilities
|
|
417,918
|
|
515,023
|
|
|
Total long term
debt
|
|
737,097
|
|
774,783
|
|
|
Total other long term
liabilities
|
|
16,996
|
|
17,249
|
|
|
Total members'
equity
|
|
4,355,277
|
|
3,709,203
|
|
|
|
Total liabilities and
members' equity
|
|
$ 5,805,927
|
|
$ 5,233,324
|
|
Diamond Green Diesel
Joint Venture
|
Operating Financial
Results
|
For the Three and
Twelve Months Ended December 31, 2023 and 2022
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Twelve Months
Ended
|
|
|
|
|
|
$ Change
|
|
|
|
|
$ Change
|
|
|
|
December 31,
|
|
December 31,
|
|
Favorable
|
|
|
December 31,
|
|
December 31,
|
|
Favorable
|
Revenues:
|
2023
|
|
2022
|
|
(Unfavorable)
|
|
|
2023
|
|
2022
|
|
(Unfavorable)
|
|
Operating
revenues
|
$ 1,633,795
|
|
$ 1,594,552
|
|
$
39,243
|
|
|
$
6,990,622
|
|
$ 5,501,166
|
|
$
1,489,456
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total costs and
expenses less
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
lower of cost or market
inventory
valuation and depreciation,
amortization and accretion expense
|
1,495,293
|
|
1,302,584
|
|
(192,709)
|
|
|
5,925,778
|
|
4,614,192
|
|
(1,311,586)
|
|
Lower of cost or market
(LCM) inventory
valuation adjustment
|
60,871
|
|
-
|
|
(60,871)
|
|
|
60,871
|
|
-
|
|
(60,871)
|
|
Depreciation,
amortization and
|
58,881
|
|
36,054
|
|
(22,827)
|
|
|
230,921
|
|
125,656
|
|
(105,265)
|
|
|
accretion
expense
|
|
|
|
|
|
|
|
|
|
|
|
|
Total costs and
expenses
|
1,615,045
|
|
1,338,638
|
|
(276,407)
|
|
|
6,217,570
|
|
4,739,848
|
|
(1,477,722)
|
|
Operating
income
|
18,750
|
|
255,914
|
|
(237,164)
|
|
|
773,052
|
|
761,318
|
|
11,734
|
Other income
|
3,454
|
|
1,244
|
|
2,210
|
|
|
10,317
|
|
3,170
|
|
7,147
|
Interest and debt
expense, net
|
(12,072)
|
|
(10,262)
|
|
(1,810)
|
|
|
(49,857)
|
|
(19,796)
|
|
(30,061)
|
|
Income before income
tax expense
|
10,132
|
|
246,896
|
|
(236,764)
|
|
|
733,512
|
|
744,692
|
|
(11,180)
|
|
Income tax
expense
|
752
|
|
|
|
(752)
|
|
|
752
|
|
|
|
(752)
|
|
Net income
|
$
9,380
|
|
$
246,896
|
|
$
(237,516)
|
|
|
$ 732,760
|
|
$
744,692
|
|
$ (11,932)
|
Darling Ingredients Inc. reports Adjusted EBITDA results, which
is a Non-GAAP financial measure, as a compliment 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 and
Twelve Months Ended December 30, 2023 and December 31,
2022
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Twelve Months
Ended
|
|
Adjusted
EBITDA
|
(unaudited)
December 30,
|
|
December 31,
|
|
|
(unaudited)
December 30,
|
|
December 31,
|
|
(U.S. dollars in
thousands)
|
2023
|
|
2022
|
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable
to Darling
|
$
84,516
|
|
$
156,560
|
|
|
$
647,726
|
|
$
737,690
|
|
Depreciation and
amortization
|
137,929
|
|
117,384
|
|
|
502,015
|
|
394,721
|
|
Interest
expense
|
68,453
|
|
46,139
|
|
|
259,223
|
|
125,566
|
|
Income tax
expense
|
7,246
|
|
37,995
|
|
|
59,568
|
|
146,626
|
|
Restructuring and asset
impairment charges
|
13,133
|
|
21,109
|
|
|
18,553
|
|
29,666
|
|
Acquisition and
integration costs
|
1,726
|
|
2,738
|
|
|
13,884
|
|
16,372
|
|
Change in fair value of
contingent consideration
|
|
5,167
|
|
-
|
|
|
(7,891)
|
|
-
|
|
Foreign currency (gain)
loss
|
206
|
|
5,272
|
|
|
(8,133)
|
|
11,277
|
|
Other (income) expense,
net
|
(2,825)
|
|
(242)
|
|
|
(16,310)
|
|
3,609
|
|
Equity in net income of
Diamond Green Diesel
|
(4,690)
|
|
(123,448)
|
|
|
(366,380)
|
|
(372,346)
|
|
Equity in net (income)
loss of other unconsolidated subsidiaries
|
(1,508)
|
|
831
|
|
|
(5,011)
|
|
(5,102)
|
|
Net income attributable
to noncontrolling interests
|
2,740
|
|
2,671
|
|
|
12,663
|
|
9,402
|
|
Adjusted EBITDA
(Non-GAAP)
|
$
312,093
|
|
$
267,009
|
|
|
$
1,109,907
|
|
$
1,097,481
|
|
Foreign currency
exchange impact
|
(7,932)
|
(1)
|
-
|
|
|
(10,830)
|
(2)
|
-
|
|
Pro forma Adjusted EBITDA to
Foreign Currency (Non-GAAP)
|
$
304,161
|
|
$
267,009
|
|
|
$
1,099,077
|
|
$
1,097,481
|
|
DGD Joint Venture
Adjusted EBITDA (Darling's Share)
|
$
38,816
|
|
$
145,984
|
|
|
$
501,987
|
|
$
443,487
|
|
|
|
|
|
|
|
|
|
|
|
Darling plus Darling's
share of DGD Joint Venture Adjusted EBITDA
|
$
350,909
|
|
$
412,993
|
|
|
$
1,611,894
|
|
$
1,540,968
|
|
|
|
(1) The average rate
assumption used in this calculation were the actual average rate
for the three months ended December 30, 2023
|
|
of €1.00:USD$1.07,
R$1.00:USD$0.20 and CAD$1.00:USD$0.73, as compared to the average
rate for the three months ended
|
December 31, 2022 of
€1.00:USD$1.02, R$1.00:USD$0.19 and CAD$1.00:USD$0.74,
respectively.
|
|
|
(2) The average rate
assumption used in this calculation were the actual average rate
for the twelve months ended December 30, 2023
|
|
of €1.00:USD$1.08,
R$1.00:USD$0.20 and CAD$1.00:USD$0.74, as compared to the average
rate for the twelve months ended
|
|
December 31, 2022 of
€1.00:USD$1.05, R$1.00:USD$0.19 and CAD$1.00:USD$0.77,
respectively.
|
|
About Darling Ingredients
A pioneer in circularity, Darling Ingredients Inc. (NYSE: DAR)
takes material from the animal agriculture and food
industries, and transforms them into valuable ingredients that
nourish people, feed animals and crops, and fuel the world with
renewable energy. The company operates over 260 facilities in
more than 15 countries and processes about 15% of the world's
animal agricultural by-products, produces about 30% of the world's
collagen (both gelatin and hydrolyzed collagen), and is one of the
largest producers of renewable energy. 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 2023 financial results
at 9 a.m. Eastern Time (8 a.m. Central Time) on Feb. 28, 2024.
To join the call as a participant to ask a question, please
register in advance to receive a confirmation email with the
dial-in number and PIN for immediate access on February 28, 2024, or call 844-868-8847
(United States) or 412-317-6593
(International) and ask for "The Darling Ingredients Call" that
day.
A replay of the call will be available online via the webcast
registration link and via phone at 877-344-7529 (United States), 855-669-9658 (Canada) or 412-317-0088 (International) using
reference passcode 2510453. The phone replay will be available two
hours after the call concludes through March
6, 2024.
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. It 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, the presentation in this
report may not be comparable to EBITDA or Adjusted EBITDA
presentations disclosed by other companies. Adjusted EBITDA is
calculated above and represents for any relevant period, net
income/(loss) plus depreciation and amortization, restructuring and
asset impairment charges, acquisition and integration costs, change
in fair value of contingent consideration, interest expense, income
tax provision, other income/(expense) and equity in net
(income)/loss of unconsolidated subsidiary. Management believes
that Adjusted EBITDA is useful in evaluating the Company's
operating performance compared to that of other companies in its
industry because the calculation of Adjusted EBITDA generally
eliminates the effects of financing, income taxes and certain
non-cash and other items that may vary for different companies for
reasons unrelated to overall operating performance.
Pro forma Adjusted EBITDA to Foreign Currency is not a
recognized accounting measurement under GAAP. The Company evaluates
the impact of foreign currency on its adjusted EBITDA. DGD Joint
Venture Adjusted EBITDA (Darling's share) is not reflected in the
Adjusted EBITDA or the Pro forma Adjusted EBITDA to Foreign
Currency (Non-GAAP).
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, 6%
Notes, 5.25% Notes and 3.625% Notes that were outstanding at
December 30, 2023. However, the
amounts shown below for Adjusted EBITDA differ from the amounts
calculated under similarly titled definitions in the Company's
Senior Secured Credit Facilities, 6% Notes, 5.25% Notes and 3.625%
Notes, as those definitions permit further adjustments to reflect
certain other nonrecurring costs, non-cash charges and cash
dividends from the DGD Joint Venture. Additionally, the Company
evaluates the impact of foreign exchange on operating cash flow,
which is defined as segment operating income (loss) plus
depreciation and amortization.
DGD Joint Venture Adjusted EBITDA (Darling's share) is not a
recognized accounting measure under GAAP; it should not be
considered as an alternative to net income or equity in net income
of Diamond Green Diesel, 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. The Company calculates DGD Joint Venture
Adjusted EBITDA (Darling's share) by taking DGD's operating income
plus DGD's depreciation, amortization and accretion expense and
then multiplying by 50% to get Darling's share of DGD's EBITDA.
Information reconciling forward-looking combined adjusted EBITDA
to net income is unavailable to the Company without unreasonable
effort. The Company is not able to provide reconciliations of
combined adjusted EBITDA to net income because certain items
required for such reconciliations are outside of the Company's
control and/or cannot be reasonably predicted, such as the impact
of volatile commodity prices on the Company's operations, impact of
foreign currency exchange fluctuations, depreciation and
amortization and the provision for income taxes. Preparation of
such reconciliations for Darling Ingredients Inc. and the Company's
joint venture, Diamond Green Diesel,
would require a forward-looking balance sheet, statement of
operations and statement of cash flows, prepared in accordance with
GAAP for each entity, and such forward-looking financial statements
are unavailable to the Company without unreasonable effort. The
Company provides guidance for its combined adjusted EBITDA outlook
that it believes will be achieved; however, it cannot accurately
predict all the components of the combined adjusted EBITDA
calculation.
EBITDA per gallon is not a recognized accounting measurement
under GAAP; it should not be considered as an alternative to net
income or equity in income of Diamond Green
Diesel, 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. EBITDA
per gallon is presented here not as an alternative to net income or
equity in income of Diamond Green
Diesel, but rather as a measure of Diamond Green Diesel's operating performance.
Since EBITDA per gallon (generally, net income plus interest
expense, taxes, depreciation and amortization divided by total
gallons sold) is not calculated identically by all companies, this
presentation may not be comparable to EBITDA per gallon
presentations disclosed by other companies. Management believes
that EBITDA per gallon is useful in evaluating Diamond Green Diesel's operating performance
compared to that of other companies in its industry because the
calculation of EBITDA per gallon generally eliminates the effects
of financing, income taxes and certain non-cash and other items
presented on a per gallon basis that may vary for different
companies for reasons unrelated to overall operating
performance.
Cautionary Statements Regarding Forward-Looking Information:
This media release includes "forward-looking" statements that
are subject to risks and uncertainties that could cause actual
results to differ materially from those expressed or implied in the
statements. Statements that are not statements of historical facts
are forward-looking statements and are made pursuant to the safe
harbor provisions of the Private Securities Litigation Reform Act
of 1995. Words such as "estimate," "guidance," "outlook,"
"project," "planned," "contemplate," "potential," "possible,"
"proposed," "intend," "believe," "anticipate," "expect," "may,"
"will," "would," "should," "could," and similar expressions are
intended to identify forward-looking statements. All statements
other than statements of historical facts included in this
release are forward-looking statements. Forward-looking
statements are based on the Company's current expectations and
assumptions regarding its business, the economy and other future
conditions. The Company cautions readers that any such
forward-looking statements it makes are not guarantees of future
performance and that actual results may differ materially from
anticipated results or expectations expressed in its
forward-looking statements as a result of a variety of factors,
including many that are beyond the Company's control.
Important factors that could cause actual results to differ
materially from the Company's expectations include: 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; reduced demands or prices for biofuels, biogases or
renewable electricity; global demands for 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, reduced volume due to
government regulations affecting animal production 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, used cooking oil, protein
or collagen (including, without limitation, collagen peptides and
gelatin) finished product prices; changes to government
policies around the world relating to renewable fuels and
greenhouse gas ("GHG") emissions that adversely affect prices,
margins or markets (including for the DGD Joint Venture),
including 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; climate related adverse results, including with respect
to the Company's climate goals, targets or commitments; possible
product recall resulting from developments relating to the
discovery of unauthorized adulterations to food or food
additives or products which do not meet specifications,
contract requirements or regulatory standards; 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 in China and elsewhere; the occurrence of
pandemics, epidemics or disease outbreaks, such as the 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 or 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, a decline in margins on the products produced by the
DGD Joint Venture and issues relating to the announced SAF upgrade
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;
tax changes, such as the introduction of a global minimum tax;
difficulties or a significant disruption (including, without
limitation, due to cyber-attack) in the Company's information
systems, networks or the confidentiality, availability or integrity
of our data 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, including the Russia-Ukraine war and the Israeli-Palestinian
conflict and other associated or emerging conflicts in the
Middle East; 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, inflation rates, 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 report 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. For more detailed discussion of these factors and other
risks and uncertainties regarding the Company, its business and the
industries in which it operates, see the Company's filings with the
SEC, including the Risk Factors discussion in Item 1A of Part I of
the Company's Annual Report on Form 10-K for the fiscal year ended
December 30, 2023. The Company
cautions readers that all forward-looking statements speak only as
of the date made, and the Company undertakes no obligation to
update any forward-looking statements, whether as a result of
changes in circumstances, new events or otherwise.
Darling Ingredients
Contacts
|
Investors:
|
Suann
Guthrie
|
|
Senior VP, Investor
Relations, Sustainability & Communications
|
|
(469) 214-8202;
suann.guthrie@darlingii.com
|
|
|
Media:
|
Jillian
Fleming
|
|
Director, Global
Communications
|
|
(972) 541-7115;
jillian.fleming@darlingii.com
|
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SOURCE Darling Ingredients Inc.