Pet Food Press Releases

Darling Ingredients releases financial information

First Quarter 2021 

  • Net income of $151.8 million, or $0.90 per GAAP diluted share 
  • Net Sales of $1.05 billion
  • Combined adjusted EBITDA of $284.8 million
  • Global Ingredients business Q1 EBITDA of $176.6 million, best quarter in the Company's history 
  • Diamond Green Diesel ("DGD") earned a record $2.77 EBITDA per gallon, contributing $108.2 million of EBITDA to Darling's fuel segment 

Darling reported net sales of $1.05 billion for the first quarter of 2021, as compared with net sales of $852.8 million for the same period a year ago.  Net income attributable to Darling for the three months ended April 3, 2021 was $151.8 million, or $0.90 per diluted share, compared to net income of $85.5 million, or $0.51 per diluted share, for the first quarter of 2020. 

"Our worldwide team delivered the best quarter in our Company's history as our global ingredients business generated $176.6 million of EBITDA in the first quarter," said Randall C. Stuewe, Chairman and Chief Executive Officer of Darling Ingredients Inc. "Adding the strong Q1 performance of DGD, our 2021 is off to a great start with $284.8 million of combined adjusted EBITDA."

"Both of the renewable diesel projects at DGD remain on track, with the expansion at Norco, LA due to begin production in the middle of Q4 of 2021 and the 470 million gallon facility under construction in Port Arthur expected to be operational in the second half of 2023," Stuewe added. "With the startup of the Norco expansion, we believe that DGD will be able to sell approximately 365 million gallons of renewable diesel this year. The record $2.77 EBITDA per gallon reported in Q1 by DGD, leads us to believe that DGD's EBITDA per gallon will average in the range of $2.25 to $2.40EBITDA per gallon for all of 2021," Stuewe stated.

"As a result of the solid performance of our global ingredients business to start the year and an improved outlook for DGD, we are increasing our combined adjusted EBITDA guidance to a range of $1.075 billion to $1.150 billion for 2021. This new guidance range is 28% to 35% better than our 2020 performance and sets up our global business for continued growth and improved profitability into the future," commented Stuewe.      

As of April 3, 2021, Darling had $71.4 million in cash and cash equivalents, and $879.9 million available under its committed revolving credit agreement. Total debt outstanding at the end of the three months ended April 3, 2021 was $1.4 billion. 

Combined adjusted EBITDA was $284.8 million for the first quarter of 2021, compared to $213.3 million for the same period in 2020. 

Segment Financial Tables (in thousands)

(unaudited)


Three Months Ended April 3, 2021

Feed
Ingredients

Food
Ingredients

Fuel
Ingredients

Corporate

Total







Net Sales

$          651,444

$          298,065

$            97,207

$                   -

$        1,046,716

Cost of sales and operating expenses

474,581

226,413

71,790

-

772,784

Gross Margin

$          176,863

$            71,652

$            25,417

$                   -

$           273,932







Loss/(gain) on sale of assets

(139)

55

20

-

(64)

Selling, general and administrative expenses

52,620

25,191

4,867

14,720

97,398

Restructuring and asset impairment charges

-

-

778

-

778

Depreciation and amortization

54,609

14,883

6,155

2,887

78,534

Equity in net income of Diamond Green Diesel

-

-

102,225

-

102,225

Segment operating income/(loss)

$            69,773

$            31,523

$          115,822

$       (17,607)

$           199,511

Equity in net income of unconsolidated subsidiaries

$                 612

$                      -

$                      -

$                   -

$                  612

Segment Income/(loss)

$            70,385

$            31,523

$          115,822

$       (17,607)

$           200,123







Segment EBITDA

$          124,382

$            46,406

$            20,530

$      (14,720)

$           176,598

DGD adjusted EBITDA (Darling's Share)

$                      -

$                      -

$          108,200

$                   -

$           108,200

Combined adjusted EBITDA

$          124,382

$            46,406

$          128,730

$      (14,720)

$           284,798







Three Months Ended March 28, 2020

Feed
Ingredients

Food
Ingredients

Fuel
Ingredients

Corporate

Total







Net Sales

$          512,625

$          270,294

$            69,923

$                   -

$           852,842

Cost of sales and operating expenses

388,453

205,430

53,025

-

646,908

Gross Margin

$          124,172

$            64,864

$            16,898

$                   -

$           205,934







Loss on sale of assets

50

2

9

-

61

Selling, general and administrative expenses

53,947

25,476

1,654

15,116

96,193

Depreciation and amortization

53,521

20,305

8,092

2,753

84,671

Equity in net income of Diamond Green Diesel

-

-

97,820

-

97,820

Segment operating income/(loss)

$            16,654

$            19,081

$          104,963

$       (17,869)

$           122,829

Equity in net income of unconsolidated subsidiaries

$                 869

$                      -

$                      -

$                   -

$                  869

Segment income/(loss)

$            17,523

$            19,081

$          104,963

$       (17,869)

$           123,698







Segment EBITDA

$            70,175

$            39,386

$            15,235

$      (15,116)

$           109,680

DGD adjusted EBITDA (Darling's Share)

$                      -

$                      -

$          103,634

$                   -

$           103,634

Combined adjusted EBITDA

$            70,175

$            39,386

$          118,869

$      (15,116)

$           213,314

Darling Ingredients Inc. and Subsidiaries

Consolidated Balance Sheets

April 3, 2021 and January 2, 2021

  (in thousands)




April 3,


January 2,



2021


2021

ASSETS

(unaudited)



Current assets:





Cash and cash equivalents

$                  71,199


$                  81,617


Restricted cash

177


103


Accounts receivable, net

385,663


405,387


Inventories

420,659


405,922


Prepaid expenses

50,251


47,793


Income taxes refundable

3,274


3,883


Other current assets

9,544


42,289


              Total current assets

940,767


986,994

Property, plant and equipment, net

1,822,075


1,863,814

Intangible assets, net

452,539


473,680

Goodwill

1,241,242


1,260,240

Investment in unconsolidated subsidiaries

915,085


804,682

Operating lease right-of-use assets

145,238


146,563

Other assets

59,099


60,682

Deferred income taxes

15,402


16,676



$             5,591,447


$             5,613,331

LIABILITIES AND STOCKHOLDERS' EQUITY




Current liabilities:





Current portion of long-term debt

$                  26,997


$                  27,538


Accounts payable, principally trade

245,648


255,340


Income taxes payable

15,627


17,497


Current operating lease liabilities

38,064


39,459


Accrued expenses

311,371


335,471


              Total current liabilities

637,707


675,305

Long-term debt, net of current portion

1,417,534


1,480,531

Long-term operating lease liabilities

108,777


109,707

Other noncurrent liabilities

115,799


117,371

Deferred income taxes

281,684


276,208


              Total liabilities

2,561,501


2,659,122

Commitments and contingencies




Total Darling's stockholders' equity

2,966,603


2,891,909

Noncontrolling interests

63,343


62,300


              Total stockholders' equity

$             3,029,946


$             2,954,209



$             5,591,447


$             5,613,331









Darling Ingredients Inc. and Subsidiaries 

Consolidated Operating Results

For the Three-Month Periods Ended April 3, 2021 and March 28, 2020

(in thousands, except per share data)   




Three Months Ended



(unaudited)


$ Change



April 3,


March 28,


Favorable



2021


2020


(Unfavorable)

Net sales

$       1,046,716


$          852,842


$           193,874

Costs and expenses:







Cost of sales and operating expenses

772,784


646,908


(125,876)


Loss (gain) on sale of assets

(64)


61


125


Selling, general and administrative expenses

97,398


96,193


(1,205)


Restructuring and asset impairment charges

778


-


(778)


Depreciation and amortization

78,534


84,671


6,137

Total costs and expenses

949,430


827,833


(121,597)


Equity in net income of Diamond Green Diesel

102,225


97,820


4,405

Operating income

199,511


122,829


76,682

Other expense:







Interest expense

(16,428)


(19,090)


2,662


Foreign currency gain / (loss)

(410)


1,664


(2,074)


Other expense, net

(1,159)


(1,881)


722

Total other expense

(17,997)


(19,307)


1,310

Equity in net income






    of unconsolidated subsidiaries

612


869


(257)

Income from operations before income taxes

182,126


104,391


77,735

Income tax expense

28,708


18,300


(10,408)

Net income

153,418


86,091


67,327

Net income attributable to







noncontrolling interests

(1,652)


(581)


(1,071)

Net income attributable to Darling

$          151,766


$            85,510


$             66,256








Basic income per share:

$                0.93


$                0.52


$                 0.41

Diluted income per share:

$                0.90


$                0.51


$                 0.39








Number of diluted common shares:

167,749


167,927



                                                                              

Darling Ingredients Inc. and Subsidiaries

     Consolidated Statement of Cash Flows

Periods Ended April 3, 2021 and March 28, 2020

(in thousands) 

(unaudited)    






Three Months Ended





April 3,


March 28,

Cash flows from operating activities:

2021


2020


Net income

$  153,418


$    86,091


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






Depreciation and amortization

78,534


84,671



Loss/(gain) on sale of assets

(64)


61



Asset impairment

138


-



Deferred taxes

11,809


6,377



Decrease in long-term pension liability

(448)


(264)



Stock-based compensation expense

8,415


10,818



Write-off deferred loan costs

598


-



Deferred loan cost amortization

1,040


1,416



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

(102,837)


(98,689)



Distributions of earnings from other unconsolidated subsidiaries

57


-



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






     Accounts receivable

10,721


487



     Income taxes refundable/payable

(760)


348



     Inventories and prepaid expenses

(27,188)


(24,999)



     Accounts payable and accrued expenses

(13,462)


(16,790)



     Other

18,834


(14,981)




     Net cash provided by operating activities

138,805


34,546

Cash flows from investing activities:





Capital expenditures

(60,751)


(61,599)


Acquisitions, net of cash acquired

(340)


-


Investment in unconsolidated subsidiaries

(4,449)


-


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

1,629


379


Payments related to routes and other intangibles

(347)


(3,416)




     Net cash used in investing activities

(64,258)


(64,636)

Cash flows from financing activities:





Proceeds from long-term debt

9,262


8,264


Payments on long-term debt

(60,444)


(8,638)


Borrowings from revolving credit facility

111,000


219,933


Payments on revolving credit facility

(97,000)


(100,782)


Net cash overdraft financing

499


(9,594)


Issuance of common stock

50


67


Repurchase of common stock

-


(55,044)


Minimum withholding taxes paid on stock awards

(42,268)


(4,328)


Acquisition of noncontrolling interest

-


(8,784)


Distributions to noncontrolling interests

(2,143)


(688)




     Net cash provided (used) by financing activities

(81,044)


40,406

Effect of exchange rate changes on cash flows

(3,847)


(6,916)

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

(10,344)


3,400

Cash, cash equivalents and restricted cash at beginning of period

81,720


73,045

Cash, cash equivalents and restricted cash at end of period

$    71,376


$    76,445

Supplemental disclosure of cash flow information:





Accrued capital expenditures

$     (9,678)


$     (1,630)


Cash paid during the period for:






Interest, net of capitalized interest

$      2,774


$      5,863



Income taxes, net of refunds

$    15,578


$    11,453


Non-cash operating activities:






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

$    12,404


$      9,121


Non-cash financing activities:






Debt issued for service contract assets

$               -


$            21

Diamond Green Diesel Joint Venture

Condensed Consolidated Balance Sheets

March 31, 2021 and December 31, 2020

(in thousands)






March 31,


December  31,





2021


2020

Assets:



 (unaudited) 




Total current assets


$           477,840


$          383,557


Property, plant and equipment, net


1,437,905


1,238,726


Other assets


39,171


36,082



Total assets


$        1,954,916


$       1,658,365








Liabilities and members' equity:






Total current portion of long term debt


$                   562


$                  517


Total other current liabilities


177,594


99,787


Total long term debt


8,702


8,705


Total other long term liabilities


8,722


3,758


Total members' equity


1,759,336


1,545,598



Total liabilities and members' equity


$        1,954,916


$       1,658,365













Diamond Green Diesel Joint Venture

Operating Financial Results

For the Three-Month Periods Ended March 31, 2021 and March 31, 2020

(in thousands)





Three Months Ended




(unaudited)


$ Change




March 31,


March 31,


Favorable

Revenues:

2021


2020


(Unfavorable)


Operating revenues

$           431,633


$           358,615


$               73,018

Expenses:







Total costs and expenses less








depreciation, amortization and
accretion expense

215,234


151,347


(63,887)


Depreciation, amortization and

11,687


11,774


87



accretion expense






Total costs and expenses

226,921


163,121


(63,800)


Operating income 

204,712


195,494


9,218

Other income

58


461


(403)



Interest and debt expense, net

(320)


(315)


(5)



Net income 

$           204,450


$           195,640


$                 8,810

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 Periods Ended April 3, 2021 and March 28, 2020




Three Months Ended

Adjusted EBITDA 

April 3,


March 28,

(U.S. dollars in thousands)

2021


2020






Net income attributable to Darling

$        151,766


$               85,510

Depreciation and amortization

78,534


84,671

Interest expense

16,428


19,090

Income tax expense

28,708


18,300

Restructuring and asset impairment charges

778


-

Foreign currency loss / (gain)

410


(1,664)

Other expense, net

1,159


1,881

Equity in net income of Diamond Green Diesel

(102,225)


(97,820)

Equity in net income of unconsolidated subsidiaries

(612)


(869)

Net income attributable to noncontrolling interests

1,652


581


Adjusted EBITDA (Non-GAAP)

$        176,598


$        109,680

Foreign currency exchange impact 

(8,050)

(1)

-


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

$        168,548


$        109,680

DGD Joint Venture Adjusted EBITDA (Darling's Share)

$        108,200


$        103,634






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

$        284,798


$        213,314






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

April 3, 2021 of €1.00:USD$1.20 and CAD$1.00:USD$0.79, as compared to the average rate for the three months ended

March 28, 2020 of  €1.00:USD$1.10 and CAD$1.00:USD$0.75, respectively.

 

 

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