Attached files
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| EX-99.2 - EXHIBIT 99.2 EARNING SLIDES - DARLING INGREDIENTS INC. | darlingingredientsq12021.htm |
| 8-K - 8-K - DARLING INGREDIENTS INC. | dar-20210511.htm |
EXHIBIT 99.1
News Release
DARLING INGREDIENTS INC. REPORTS FIRST QUARTER 2021 FINANCIAL RESULTS
IRVING, TEXAS, May 11, 2021/PRNewswire/ Darling Ingredients Inc. (NYSE: DAR, “Darling”) --
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 $2.40 EBITDA 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.
| News Release May 11, 2021 Page 2 | ||||||||||
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 | |||||||
| News Release May 11, 2021 Page 3 | ||||||||||
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 | |||||||||||
| News Release May 11, 2021 Page 4 | ||||||||||
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/(loss) 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 | |||||||||||||||
| News Release May 11, 2021 Page 5 | ||||||||||
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) | |||||||||
| Distribution 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) | |||||||||
| Acquisition, net of cash acquired | (340) | — | |||||||||
| Investment in unconsolidated subsidiary | (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 by 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 asset obtained in exchange for new lease liabilities | $ | 12,404 | $ | 9,121 | |||||||
| Non-cash financing activities: | |||||||||||
| Debt issued for service contract assets | $ | — | $ | 21 | |||||||
| News Release May 11, 2021 Page 6 | ||||||||||
Diamond Green Diesel Joint Venture
Condensed Consolidated Balance Sheets
March 31, 2021 and December 31, 2020
(in thousands)
| March 31, | December 31, | ||||||||||
| 2021 | 2020 | ||||||||||
| (unaudited) | |||||||||||
| Assets: | |||||||||||
| 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 | |||||||||||||||
| 2021 | 2020 | (Unfavorable) | |||||||||||||||
| Revenues: | |||||||||||||||||
| 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 accretion expense | 11,687 | 11,774 | 87 | ||||||||||||||
| 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 | |||||||||||
| News Release May 11, 2021 Page 7 | ||||||||||
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 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 the 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$1.01 and CAD$1.00:USD $0.75, respectively. | ||||||||||||||
About Darling
Darling Ingredients Inc. (NYSE: DAR) is a world leading producer of organic ingredients, generating 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. Darling Ingredients named one of the 50 Sustainability and Climate Leaders in 2021, to learn more Darling Ingredients: The greenest Company on the planet - 50 Sustainability & Climate Leaders (50climateleaders.com). The Company sells its ingredients 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 venture 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 Greenhouse Gas (GHG) emissions by up to 85% compared to fossil fuels. For additional information, visit the Company's website at http://www.darlingii.com.
| News Release May 11, 2021 Page 8 | ||||||||||
Darling Ingredients Inc. will host a conference call to discuss the Company’s first quarter 2021 financial results at 9:00 am Eastern Time (8:00 am Central Time) on Wednesday, May 12, 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 10153598. 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 May 19, 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 10153598. 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.
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).
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 April 3, 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.
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 income and statement of cash flow, 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 a range 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.
| News Release May 11, 2021 Page 9 | ||||||||||
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,” “combined adjusted EBITDA guidance” 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 projects; 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