LithiumBank Resources

Darling Ingredients Inc. Reports Second Quarter 2021 Financial Results

10 August 2021

 Darling Ingredients Inc. (NYSE: DAR, "Darling") --

Darling International Inc. (PRNewsfoto/Darling International Inc.)

Second Quarter 2021

  • Net income of $196.6 million, or $1.17 per GAAP diluted share
  • Net Sales of $1.2 billion
  • Combined adjusted EBITDA of $353.7 million
  • Global Ingredients business reported a record Q2 EBITDA of $221.7 million
  • Renewable diesel JV, DGD generated a record quarter, contributing $132.0 million of EBITDA to Darling
  • Darling repurchased approximately $76 million of common stock in the second quarter
  • Darling trailing twelve-month combined adjusted EBITDA surpasses $1 billion, first time in company history
  • DGD Norco, LA 400 million gallon renewable diesel project on track to be fully operational in middle of Q4 2021
  • DGD Port Arthur, TX 470 million gallon renewable diesel project expected completion now in first half of 2023

Darling reported net sales of $1.2 billion for the second quarter of 2021, as compared with net sales of $848.7 million for the same period a year ago.  Net income attributable to Darling for the three months ended July 3, 2021 was $196.6 million, or $1.17 per diluted share, compared to net income of $65.4 million, or $0.39 per diluted share, for the second quarter of 2020.

"Our global ingredients business continues to perform at the highest levels producing a record adjusted EBITDA of approximately $222 million for the second quarter," said Randall C. Stuewe, Chairman and Chief Executive Officer of Darling Ingredients Inc. "We continue to see positive signs of strength in a recovering economy both here in North America and around the world which should provide for sustained demand for food, feed and fuel, empowering Darling to take advantage of our leadership position in the industry."

"Darling's 2021 first half financial performance was strong, as we generated a combined adjusted EBITDA of $638.5 million and with the continued strength of commodity pricing for our global ingredients business expected through the rest of 2021, and the 400 million gallon renewable diesel expansion of DGD Norco, LA starting up in the near term, we are once again increasing our combined adjusted EBITDA guidance for 2021 to approximately $1.275 billion," commented Stuewe.  

Under Darling's current share repurchase authorization, the Company repurchased 1.14 million shares of common stock during the second quarter for a total of $75.7 million. Darling has approximately $124.3 million remaining under its current authorization.

For the six months ended July 3, 2021, Darling reported net sales of $2.25 billion, as compared with net sales of $1.7 billion for the same period of 2020. Net Income attributable to Darling for the first six months of 2021 was $348.3 million, or $2.08 per diluted share, as compared to a net income of $150.9 million, or $0.90 per diluted share, for the first six months of 2020.

As of July 3, 2021, Darling had $77.9 million in cash and cash equivalents, and $902.1 million available under its committed revolving credit agreement. Total debt outstanding as of July 3, 2021 was $1.4 billion. Capital expenditures (exclusive of DGD investments) of $126.1 million were made during the first six months of fiscal 2021, compared to $123.2 million in the first six months of fiscal 2020.

Combined adjusted EBITDA was $353.7 million for the second quarter of 2021, compared to $195.2 million for the same period in 2020. On a year-to-date basis, combined adjusted EBITDA totaled $638.5 million for 2021, compared to $408.5 million on a year-to-date basis for 2020.


Segment Financial Tables (in thousands) 

 

(unaudited)

 

Three Months Ended July 3, 2021

Feed
Ingredients

Food
Ingredients

Fuel
Ingredients

Corporate

Total

 
       

Net Sales

$       771,932

$       317,031

$       109,706

$                -

$     1,198,669

 

Cost of sales and operating expenses

556,424

238,539

83,110

-

878,073

 

Gross Margin

$       215,508

$         78,492

$         26,596

$                -

$        320,596

 
       

Gain on sale of assets

(122)

(48)

(58)

-

(228)

 

Selling, general and administrative expenses

54,977

25,542

4,474

14,139

99,132

 

Depreciation and amortization

53,971

15,850

6,698

2,703

79,222

 

Equity in net income of Diamond Green Diesel

-

-

125,788

-

125,788

 

Segment operating income/(loss)

$       106,682

$         37,148

$       141,270

$     (16,842)

$        268,258

 

Equity in net income of other unconsolidated subsidiaries

$           1,940

$                   -

$                   -

$                -

$            1,940

 

Segment Income/(loss)

$       108,622

$         37,148

$       141,270

$     (16,842)

$        270,198

 
       

Segment EBITDA

$       160,653

$         52,998

$         22,180

$     (14,139)

$        221,692

 

DGD adjusted EBITDA (Darling's Share)

$                   -

$                   -

$       132,001

$                -

$        132,001

 

Combined adjusted EBITDA

$       160,653

$         52,998

$       154,181

$     (14,139)

$        353,693

 
       

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 other 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

 
       
       

Six Months Ended July 3, 2021

Feed
Ingredients

Food
Ingredients

Fuel
Ingredients

Corporate

Total

 
       

Net Sales

$    1,423,376

$       615,096

$       206,913

$                -

$     2,245,385

 

Cost of sales and operating expenses

1,031,005

464,952

154,900

-

1,650,857

 

Gross Margin

$       392,371

$       150,144

$         52,013

$                -

$        594,528

 
       

Loss/(gain) on sale of assets

(261)

7

(38)

-

(292)

 

Selling, general and administrative expenses

107,597

50,733

9,341

28,859

196,530

 

Restructuring and asset impairment charges

-

-

778

-

778

 

Depreciation and amortization

108,580

30,733

12,853

5,590

157,756

 

Equity in net income of Diamond Green Diesel

-

-

228,013

-

228,013

 

Segment operating income/(loss)

$       176,455

$         68,671

$       257,092

$     (34,449)

$        467,769

 

Equity in net income of other unconsolidated subsidiaries

$           2,552

$                   -

$                   -

$                -

$            2,552

 

Segment income/(loss)

$       179,007

$         68,671

$       257,092

$     (34,449)

$        470,321

 
       

Segment EBITDA

$       285,035

$         99,404

$         42,710

$     (28,859)

$        398,290

 

DGD adjusted EBITDA (Darling's Share)

$                   -

$                   -

$       240,201

$                -

$        240,201

 

Combined adjusted EBITDA

$       285,035

$         99,404

$       282,911

$     (28,859)

$        638,491

 
       

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 other 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

 
       

Darling Ingredients Inc. and Subsidiaries
Consolidated Balance Sheets
July 3, 2021 and January 2, 2021
(in thousands)

 
 

July 3,

 

January 2,

 
 

2021

 

2021

 

ASSETS

(unaudited)

   

Current assets:

    
 

Cash and cash equivalents

$              77,741

 

$              81,617

 
 

Restricted cash

177

 

103

 
 

Accounts receivable, net

433,441

 

405,387

 
 

Inventories

428,203

 

405,922

 
 

Prepaid expenses

58,648

 

47,793

 
 

Income taxes refundable

2,636

 

3,883

 
 

Other current assets

21,734

 

42,289

 
  

Total current assets

1,022,580

 

986,994

 

Property, plant and equipment, net

1,846,814

 

1,863,814

 

Intangible assets, net

439,035

 

473,680

 

Goodwill

1,245,549

 

1,260,240

 

Investment in unconsolidated subsidiaries

1,037,436

 

804,682

 

Operating lease right-of-use assets

165,034

 

146,563

 

Other assets

61,000

 

60,682

 

Deferred income taxes

15,875

 

16,676

 
 

$         5,833,323

 

$         5,613,331

 

LIABILITIES AND STOCKHOLDERS' EQUITY

    

Current liabilities:

    
 

Current portion of long-term debt

$              41,603

 

$              27,538

 
 

Accounts payable, principally trade

264,447

 

255,340

 
 

Income taxes payable

25,096

 

17,497

 
 

Current operating lease liabilities

40,228

 

39,459

 
 

Accrued expenses

320,838

 

335,471

 
  

Total current liabilities

692,212

 

675,305

 

Long-term debt, net of current portion

1,393,798

 

1,480,531

 

Long-term operating lease liabilities

126,527

 

109,707

 

Other noncurrent liabilities

115,510

 

117,371

 

Deferred income taxes

321,466

 

276,208

 
 

Total liabilities

2,649,513

 

2,659,122

 

Commitments and contingencies

    

Total Darling's stockholders' equity

3,118,576

 

2,891,909

 

Noncontrolling interests

65,234

 

62,300

 
 

Total stockholders' equity

$         3,183,810

 

$         2,954,209

 
 

$         5,833,323

 

$         5,613,331

 
     

Darling Ingredients Inc. and Subsidiaries
Consolidated Operating Results
For the Three-Month and Six-Month Periods Ended July 3, 2021 and June 27, 2020
(in thousands, except per share data)       

            
  

Three Months Ended

   

Six Months Ended

 
  

(unaudited)

 

$ Change

   

(unaudited)

 

$ Change

 
  

July 3,

 

June 27,

 

Favorable

   

July 3,

 

June 27,

 

Favorable

 
  

2021

 

2020

 

(Unfavorable)

   

2021

 

2020

 

(Unfavorable)

 

Net sales

$    1,198,669

 

$       848,673

 

$        349,996

   

$    2,245,385

 

$     1,701,515

 

$        543,870

 

Costs and expenses:

              
 

Cost of sales and operating expenses

878,073

 

632,347

 

(245,726)

   

1,650,857

 

1,279,255

 

(371,602)

 
 

Loss (gain) on sale of assets

(228)

 

27

 

255

   

(292)

 

88

 

380

 
 

Selling, general and administrative expenses

99,132

 

90,193

 

(8,939)

   

196,530

 

186,386

 

(10,144)

 
 

Restructuring and asset impairment charges

-

 

-

 

-

   

778

 

-

 

(778)

 
 

Depreciation and amortization

79,222

 

83,310

 

4,088

   

157,756

 

167,981

 

10,225

 

Total costs and expenses

1,056,199

 

805,877

 

(250,322)

   

2,005,629

 

1,633,710

 

(371,919)

 
 

Equity in net income of Diamond Green Diesel

125,788

 

63,492

 

62,296

   

228,013

 

161,312

 

66,701

 

Operating income

268,258

 

106,288

 

161,970

   

467,769

 

229,117

 

238,652

 

Other expense:

              
 

Interest expense

(15,268)

 

(17,920)

 

2,652

   

(31,696)

 

(37,010)

 

5,314

 
 

Foreign currency gain / (loss)

(684)

 

(1,134)

 

450

   

(1,094)

 

530

 

(1,624)

 
 

Other expense, net

(1,198)

 

(1,485)

 

287

   

(2,357)

 

(3,366)

 

1,009

 

Total other expense

(17,150)

 

(20,539)

 

3,389

   

(35,147)

 

(39,846)

 

4,699

 

Equity in net income

              

    of other unconsolidated subsidiaries

1,940

 

692

 

1,248

   

2,552

 

1,561

 

991

 

Income from operations before income taxes

253,048

 

86,441

 

166,607

   

435,174

 

190,832

 

244,342

 

Income tax expense

54,979

 

19,946

 

(35,033)

   

83,687

 

38,246

 

(45,441)

 

Net income

198,069

 

66,495

 

131,574

   

351,487

 

152,586

 

198,901

 

Net income attributable to

              
 

noncontrolling interests

(1,487)

 

(1,056)

 

(431)

   

(3,139)

 

(1,637)

 

(1,502)

 

Net income attributable to Darling

$       196,582

 

$         65,439

 

$        131,143

   

$       348,348

 

$        150,949

 

$        197,399

 
                

Basic income per share:

$             1.21

 

$             0.40

 

$              0.81

   

$             2.14

 

$              0.93

 

$              1.21

 

Diluted income per share:

$             1.17

 

$             0.39

 

$              0.78

   

$             2.08

 

$              0.90

 

$              1.18

 
                

Number of diluted common shares:

167,597

 

165,999

     

167,673

 

166,963

   
                

Darling Ingredients Inc. and Subsidiaries
Consolidated Statement of Cash Flows
Periods Ended July 3, 2021 and June 27, 2020
(in thousands)
(unaudited)  

 
    

Six Months Ended

 
    

July 3,

 

June 27,

 

Cash flows from operating activities:

2021

 

2020

 
 

Net income

 

$  351,487

 

$  152,586

 
 

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

    
  

Depreciation and amortization

157,756

 

167,981

 
  

Loss/(gain) on sale of assets

(292)

 

88

 
  

Asset impairment

 

138

 

-

 
  

Deferred taxes

 

49,572

 

13,998

 
  

Decrease in long-term pension liability

(622)

 

(890)

 
  

Stock-based compensation expense

14,011

 

15,566

 
  

Write-off deferred loan costs

598

 

-

 
  

Deferred loan cost amortization

2,047

 

2,835

 
  

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

(230,565)

 

(162,873)

 
  

Distributions of earnings from Diamond Green Diesel and other unconsolidated subsidiaries

2,497

 

125,891

 
  

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

    
  

     Accounts receivable

(34,911)

 

26,077

 
  

     Income taxes refundable/payable

9,116

 

6,119

 
  

     Inventories and prepaid expenses

(39,992)

 

(35,413)

 
  

     Accounts payable and accrued expenses

2,770

 

(33,375)

 
  

     Other

 

14,327

 

(14,941)

 
   

Net cash provided by operating activities

297,937

 

263,649

 

Cash flows from investing activities:

    
 

Capital expenditures

(126,094)

 

(123,204)

 
 

Acquisitions, net of cash acquired

(2,059)

 

-

 
 

Investment in unconsolidated subsidiaries

(4,449)

 

-

 
 

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

3,064

 

1,053

 
 

Payments related to routes and other intangibles

(347)

 

(3,712)

 
   

Net cash used by investing activities

(129,885)

 

(125,863)

 

Cash flows from financing activities:

    
 

Proceeds from long-term debt

20,679

 

16,164

 
 

Payments on long-term debt

(73,393)

 

(18,239)

 
 

Borrowings from revolving credit facility

207,000

 

375,971

 
 

Payments on revolving credit facility

(220,000)

 

(405,800)

 
 

Net cash overdraft financing

16,487

 

(26,461)

 
 

Issuance of common stock

50

 

67

 
 

Repurchase of common stock

(75,663)

 

(55,044)

 
 

Minimum withholding taxes paid on stock awards

(43,853)

 

(4,863)

 
 

Acquisition of noncontrolling interest

-

 

(8,784)

 
 

Distributions to noncontrolling interests

(2,164)

 

(987)

 
   

Net cash used by financing activities

(170,857)

 

(127,976)

 

Effect of exchange rate changes on cash flows

(997)

 

(6,567)

 

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

(3,802)

 

3,243

 

Cash, cash equivalents and restricted cash at beginning of period

81,720

 

73,045

 

Cash, cash equivalents and restricted cash at end of period

$        77,918

 

$        76,288

 

Supplemental disclosure of cash flow information:

    
 

Accrued capital expenditures

$          1,101

 

$               23

 
 

Cash paid during the period for:

    
  

Interest, net of capitalized interest

$        29,928

 

$        35,070

 
  

Income taxes, net of refunds

$        25,270

 

$        18,030

 
 

Non-cash operating activities:

    
  

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

$        44,218

 

$        28,801

 
 

Non-cash financing activities:

    
  

Debt issued for service contract assets

$               60

 

$               21

 
        

Diamond Green Diesel Joint Venture
Condensed Consolidated Balance Sheets
June 30, 2021 and December 31, 2020
(in thousands)

 
    

June 30,

 

December  31,

    

2021

 

2020

Assets:

  

 (unaudited) 

  
 

Total current assets

 

$        464,631

 

$       383,557

 

Property, plant and equipment, net

 

1,727,979

 

1,238,726

 

Other assets

 

35,369

 

36,082

  

Total assets

 

$     2,227,979

 

$    1,658,365

       

Liabilities and members' equity:

    
 

Total current portion of long term debt

 

$               581

 

$              517

 

Total other current liabilities

 

205,484

 

99,787

 

Total long term debt

 

8,635

 

8,705

 

Total other long term liabilities

 

8,555

 

3,758

 

Total members' equity

 

2,004,724

 

1,545,598

  

Total liabilities and members' equity

 

$     2,227,979

 

$    1,658,365

       

Diamond Green Diesel Joint Venture
Operating Financial Results
For the Three-Month and Six-Month Periods Ended June 30, 2021 and June 30, 2020
(in thousands)

            
   

Three Months Ended

   

Six Months Ended

   

(unaudited)

 

$ Change

   

(unaudited)

 

$ Change

   

June 30,

 

June 30,

 

Favorable

   

June 30,

 

June 30,

 

Favorable

Revenues:

2021

 

2020

 

(Unfavorable)

   

2021

 

2020

 

(Unfavorable)

 

Operating revenues

$        571,859

 

$        295,826

 

$          276,033

   

$     1,003,492

 

$        654,441

 

$        349,051

Expenses:

             
 

Total costs and expenses less

             
  

depreciation, amortization and
accretion expense

307,857

 

157,611

 

(150,246)

   

523,091

 

308,958

 

(214,133)

 

Depreciation, amortization and

11,995

 

11,114

 

(881)

   

23,682

 

22,888

 

(794)

  

accretion expense

             

Total costs and expenses

319,852

 

168,725

 

(151,127)

   

546,773

 

331,846

 

(214,927)

 

Operating income 

252,007

 

127,101

 

124,906

   

456,719

 

322,595

 

134,124

Other income

353

 

200

 

153

   

411

 

661

 

(250)

  

Interest and debt expense, net

(784)

 

(317)

 

(467)

   

(1,104)

 

(632)

 

(472)

  

Net income 

$        251,576

 

$        126,984

 

$          124,592

   

$        456,026

 

$        322,624

 

$        133,402

                

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 July 3, 2021 and June 27, 2020

 
  

Three Months Ended

  

Six Months Ended 

 

Adjusted EBITDA 

July 3,

 

June 27,

  

July 3,

 

June 27,

 

(U.S. dollars in thousands)

2021

 

2020

  

2021

 

2020

 
           

Net income attributable to Darling

$       196,582

 

$            65,439

  

$       348,348

 

$          150,949

 

Depreciation and amortization

79,222

 

83,310

  

157,756

 

167,981

 

Interest expense

15,268

 

17,920

  

31,696

 

37,010

 

Income tax expense

54,979

 

19,946

  

83,687

 

38,246

 

Restructuring and asset impairment charges

-

 

-

  

778

 

-

 

Foreign currency loss / (gain)

684

 

1,134

  

1,094

 

(530)

 

Other expense, net

1,198

 

1,485

  

2,357

 

3,366

 

Equity in net income of Diamond Green Diesel

(125,788)

 

(63,492)

  

(228,013)

 

(161,312)

 

Equity in net income of other unconsolidated subsidiaries

(1,940)

 

(692)

  

(2,552)

 

(1,561)

 

Net income attributable to noncontrolling interests

1,487

 

1,056

  

3,139

 

1,637

 
 

Adjusted EBITDA (Non-GAAP)

$       221,692

 

$       126,106

  

$       398,290

 

$       235,786

 

Foreign currency exchange impact 

(11,493)

(1)

-

  

(19,542)

(2)

-

 
 

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

$       210,199

 

$       126,106

  

$       378,748

 

$       235,786

 

DGD Joint Venture Adjusted EBITDA (Darling's Share)

$       132,001

 

$          69,108

  

$       240,201

 

$       172,742

 
           

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

$       353,693

 

$       195,214

  

$       638,491

 

$       408,528

 
 

(1) The average rate assumption used in this calculation was the actual fiscal average rate for the three months ended July 3, 2021 of €1.00:USD$1.21 and CAD$1.00:USD$0.81, as compared to the average rate for the three months ended June 27, 2020 of  €1.00:USD$1.10 and CAD$1.00:USD$0.72, respectively.

(2) The average rate assumption used in this calculation was the actual fiscal average rate for the six months ended July 3, 2021 of €1.00:USD$1.20 and CAD$1.00:USD$0.80, as compared to the average rate for the six months ended June 27, 2020 of  €1.00:USD$1.10 and CAD$1.00:USD$0.73, 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.

Darling Ingredients Inc. will host a conference call to discuss the Company's second quarter 2021 financial results at 9:00 am Eastern Time (8:00 am Central Time) on Wednesday, August 11, 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 10158835. 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 18, 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 10158835.  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 July 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.

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 : This email address is being protected from spambots. You need JavaScript enabled to view it.    

5601 MacArthur Blvd., Irving, Texas 75038

Phone : 972-281-4823

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