08/09/2022 | Press release | Distributed by Public on 08/09/2022 14:38
News Release
Aug. 9, 2022
Page 2
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Three Months Ended July 2, 2022 | Feed Ingredients | Food Ingredients | Fuel Ingredients | Corporate | Total | |||||
Net sales | $ | 1,170,347 | $ | 369,181 | $ | 110,660 | $ | - | $ | 1,650,188 |
Cost of sales and operating expenses | 864,306 | 280,964 | 86,237 | - | 1,231,507 | |||||
Gross margin | 306,041 | 88,217 | 24,423 | - | 418,681 | |||||
Gain on sale of assets | (964) | (73) | (18) | - | (1,055) | |||||
Selling, general and administrative expenses | 64,863 | 22,855 | 4,277 | 15,781 | 107,776 | |||||
Restructuring and asset impairment charges | 8,557 | - | - | - | 8,557 | |||||
Acquisition and integration costs | - | - | - | 5,358 | 5,358 | |||||
Depreciation and amortization | 68,938 | 14,449 | 6,936 | 2,790 | 93,113 | |||||
Equity in net income of Diamond Green Diesel | - | - | 73,680 | - | 73,680 | |||||
Segment operating income/(loss) | $ | 164,647 | $ | 50,986 | $ | 86,908 | $ | (23,929) | $ | 278,612 |
Equity in net income of other unconsolidated subsidiaries | 2,272 | - | - | - | 2,272 | |||||
Segment income/(loss) | $ | 166,919 | $ | 50,986 | $ | 86,908 | $ | (23,929) | $ | 280,884 |
Segment EBITDA | $ | 242,142 | $ | 65,435 | $ | 20,164 | $ | (15,781) | $ | 311,960 |
DGD adjusted EBITDA (Darling's Share) | - | - | 90,611 | - | 90,611 | |||||
Combined adjusted EBITDA | $ | 242,142 | $ | 65,435 | $ | 110,775 | $ | (15,781) | $ | 402,571 |
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 |
News Release
Aug. 9, 2022
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Six Months Ended July 2, 2022 | Feed Ingredients | Food Ingredients | Fuel Ingredients | Corporate | Total | |||||
Net sales | $ | 2,049,785 | $ | 723,995 | $ | 242,742 | $ | - | $ | 3,016,522 |
Cost of sales and operating expenses | 1,509,829 | 551,276 | 190,979 | - | 2,252,084 | |||||
Gross margin | 539,956 | 172,719 | 51,763 | - | 764,438 | |||||
Gain on sale of assets | (1,305) | (82) | (57) | - | (1,444) | |||||
Selling, general and administrative expenses | 121,072 | 49,699 | 8,197 | 30,840 | 209,808 | |||||
Restructuring and asset impairment charges | 8,557 | - | - | - | 8,557 | |||||
Acquisition and integration costs | - | - | - | 9,131 | 9,131 | |||||
Depreciation and amortization | 123,288 | 29,899 | 13,610 | 5,562 | 172,359 | |||||
Equity in net income of Diamond Green Diesel | - | - | 145,484 | - | 145,484 | |||||
Segment operating income/(loss) | $ | 288,344 | $ | 93,203 | $ | 175,497 | $ | (45,533) | $ | 511,511 |
Equity in net income of other unconsolidated subsidiaries | 3,632 | - | - | - | 3,632 | |||||
Segment income/(loss) | $ | 291,976 | $ | 93,203 | $ | 175,497 | $ | (45,533) | $ | 515,143 |
Segment EBITDA | $ | 420,189 | $ | 123,102 | $ | 43,623 | $ | (30,840) | $ | 556,074 |
DGD adjusted EBITDA (Darling's Share) | - | - | 177,171 | - | 177,171 | |||||
Combined adjusted EBITDA | $ | 420,189 | $ | 123,102 | $ | 220,794 | $ | (30,840) | $ | 733,245 |
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 |
News Release
Aug. 9, 2022
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July 2, 2022 | January 1, 2022 | |||
ASSETS | (unaudited) | |||
Current assets: | ||||
Cash and cash equivalents | $ | 146,730 | $ | 68,906 |
Restricted cash | 110 | 166 | ||
Accounts receivable, net | 574,727 | 469,092 | ||
Inventories | 578,402 | 457,465 | ||
Prepaid expenses | 77,065 | 53,711 | ||
Income taxes refundable | 27,330 | 1,075 | ||
Other current assets | 57,462 | 38,599 | ||
Total current assets | 1,461,826 | 1,089,014 | ||
Property, plant and equipment, net | 2,237,199 | 1,840,080 | ||
Intangible assets, net | 760,079 | 397,801 | ||
Goodwill | 1,555,814 | 1,219,116 | ||
Investment in unconsolidated subsidiaries | 1,736,242 | 1,349,247 | ||
Operating lease right-of-use assets | 177,328 | 155,464 | ||
Other assets | 81,886 | 66,795 | ||
Deferred income taxes | 16,312 | 16,211 | ||
$ | 8,026,686 | $ | 6,133,728 | |
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||
Current liabilities: | ||||
Current portion of long-term debt | $ | 32,695 | $ | 24,407 |
Accounts payable, principally trade | 414,584 | 307,118 | ||
Income taxes payable | 28,452 | 32,310 | ||
Current operating lease liabilities | 45,498 | 38,168 | ||
Accrued expenses | 398,598 | 350,681 | ||
Total current liabilities | 919,827 | 752,684 | ||
Long-term debt, net of current portion | 2,881,134 | 1,438,974 | ||
Long-term operating lease liabilities | 133,663 | 120,314 | ||
Other non-current liabilities | 128,399 | 111,029 | ||
Deferred income taxes | 397,140 | 362,942 | ||
Total liabilities | 4,460,163 | 2,785,943 | ||
Commitments and contingencies | ||||
Stockholders' equity: | ||||
Common stock, $0.01 par value; | 1,735 | 1,717 | ||
Additional paid-in capital | 1,646,468 | 1,627,816 | ||
Treasury stock, at cost | (491,717) | (374,721) | ||
Accumulated other comprehensive loss | (400,907) | (321,690) | ||
Retained earnings | 2,737,887 | 2,347,838 | ||
Total Darling's stockholders' equity | 3,493,466 | 3,280,960 | ||
Noncontrolling interests | 73,057 | 66,825 | ||
Total Stockholders' equity | 3,566,523 | 3,347,785 | ||
$ | 8,026,686 | $ | 6,133,728 |
News Release
Aug. 9, 2022
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Three Months Ended | Six Months Ended | |||||||||||
(unaudited) | $ Change | (unaudited) | $ Change | |||||||||
July 2, | July 3, | Favorable | July 2, | July 3, | Favorable | |||||||
2022 | 2021 | (Unfavorable) | 2022 | 2021 | (Unfavorable) | |||||||
Net sales | $ | 1,650,188 | $ | 1,198,669 | $ | 451,519 | $ | 3,016,522 | $ | 2,245,385 | $ | 771,137 |
Costs and expenses: | ||||||||||||
Cost of sales and operating expenses | 1,231,507 | 878,073 | (353,434) | 2,252,084 | 1,650,857 | (601,227) | ||||||
Gain on sale of assets | (1,055) | (228) | 827 | (1,444) | (292) | 1,152 | ||||||
Selling, general and administrative expenses
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107,776 | 99,132 | (8,644) | 209,808 | 196,530 | (13,278) | ||||||
Restructuring and asset impairment charges | 8,557 | - | (8,557) | 8,557 | 778 | (7,779) | ||||||
Acquisition and integration costs | 5,358 | - | (5,358) | 9,131 | - | (9,131) | ||||||
Depreciation and amortization | 93,113 | 79,222 | (13,891) | 172,359 | 157,756 | (14,603) | ||||||
Total costs and expenses | 1,445,256 | 1,056,199 | (389,057) | 2,650,495 | 2,005,629 | (644,866) | ||||||
Equity in net income of Diamond Green Diesel | 73,680 | 125,788 | (52,108) | 145,484 | 228,013 | (82,529) | ||||||
Operating income | 278,612 | 268,258 | 10,354 | 511,511 | 467,769 | 43,742 | ||||||
Other expense: | ||||||||||||
Interest expense | (24,008) | (15,268) | (8,740) | (39,611) | (31,696) | (7,915) | ||||||
Foreign currency loss | (4,412) | (684) | (3,728) | (5,512) | (1,094) | (4,418) | ||||||
Other expense, net | (302) | (1,198) | 896 | (1,044) | (2,357) | 1,313 | ||||||
Total other expense | (28,722) | (17,150) | (11,572) | (46,167) | (35,147) | (11,020) | ||||||
Equity in net income of other unconsolidated subsidiaries | 2,272 | 1,940 | 332 | 3,632 | 2,552 | 1,080 | ||||||
Income from operations before income taxes | 252,162 | 253,048 | (886) | 468,976 | 435,174 | 33,802 | ||||||
Income tax expense | 47,333 | 54,979 | 7,646 | 73,416 | 83,687 | 10,271 | ||||||
Net income | 204,829 | 198,069 | 6,760 | 395,560 | 351,487 | 44,073 | ||||||
Net income attributable to noncontrolling interests
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(2,833) | (1,487) | (1,346) | (5,511) | (3,139) | (2,372) | ||||||
Net income attributable to Darling | $ | 201,996 | $ | 196,582 | $ | 5,414 | $ | 390,049 | $ | 348,348 | $ | 41,701 |
Basic income per share: | $ | 1.25 | $ | 1.21 | $ | 0.04 | $ | 2.41 | $ | 2.14 | $ | 0.27 |
Diluted income per share: | $ | 1.23 | $ | 1.17 | $ | 0.06 | $ | 2.37 | $ | 2.08 | $ | 0.29 |
Number of diluted common shares: | 164,745 | 167,597 | 164,673 | 167,673 |
News Release
Aug. 9, 2022
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Six Months Ended | ||||
(Unaudited) | ||||
July 2, | July 3, | |||
Cash flows from operating activities: | 2022 | 2021 | ||
Net income | $ | 395,560 | $ | 351,487 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||||
Depreciation and amortization | 172,359 | 157,756 | ||
Gain on sale of assets | (1,444) | (292) | ||
Asset impairment | 8,557 | 138 | ||
Deferred taxes | 35,674 | 49,572 | ||
Decrease in long-term pension liability | (547) | (622) | ||
Stock-based compensation expense | 13,369 | 14,011 | ||
Write-off deferred loan costs | - | 598 | ||
Deferred loan cost amortization | 2,207 | 2,047 | ||
Equity in net income of Diamond Green Diesel and other unconsolidated subsidiaries | (149,116) | (230,565) | ||
Distribution of earnings from Diamond Green Diesel and other unconsolidated subsidiaries | 1,631 | 2,497 | ||
Changes in operating assets and liabilities, net of effects from acquisitions: | ||||
Accounts receivable | (47,046) | (34,911) | ||
Income taxes refundable/payable | (28,834) | 9,116 | ||
Inventories and prepaid expenses | (95,199) | (39,992) | ||
Accounts payable and accrued expenses | 72,351 | 2,770 | ||
Other | (18,487) | 14,327 | ||
Net cash provided by operating activities | 361,035 | 297,937 | ||
Cash flows from investing activities: | ||||
Capital expenditures | (151,478) | (126,094) | ||
Acquisition, net of cash acquired | (1,235,537) | (2,059) | ||
Investment in Diamond Green Diesel | (239,750) | - | ||
Investment in other unconsolidated subsidiaries | - | (4,449) | ||
Gross proceeds from disposal of property, plant and equipment and other assets | 2,161 | 3,064 | ||
Payments related to routes and other intangibles | (179) | (347) | ||
Net cash used in investing activities | (1,624,783) | (129,885) | ||
Cash flows from financing activities: | ||||
Proceeds from long-term debt | 1,663,612 | 20,679 | ||
Payments on long-term debt | (23,600) | (73,393) | ||
Borrowings from revolving credit facility | 777,902 | 207,000 | ||
Payments on revolving credit facility | (937,921) | (220,000) | ||
Net cash overdraft financing | 12 | 16,487 | ||
Deferred loan costs | (10,707) | - | ||
Issuance of common stock | - | 50 | ||
Repurchase of common stock | (65,887) | (75,663) | ||
Minimum withholding taxes paid on stock awards | (45,836) | (43,853) | ||
Distributions to noncontrolling interests | - | (2,164) | ||
Net cash provided/(used) in financing activities | 1,357,575 | (170,857) | ||
Effect of exchange rate changes on cash flows | (16,059) | (997) | ||
Net increase/(decrease) in cash, cash equivalents and restricted cash | 77,768 | (3,802) | ||
Cash, cash equivalents and restricted cash at beginning of period | 69,072 | 81,720 | ||
Cash, cash equivalents and restricted cash at end of period | $ | 146,840 | $ | 77,918 |
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Aug. 9, 2022
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June 30, | December 31, | |||
2022 | 2021 | |||
(unaudited) | ||||
Assets: | ||||
Total current assets | $ | 1,065,686 | $ | 686,294 |
Property, plant and equipment, net | 3,131,430 | 2,710,747 | ||
Other assets | 52,324 | 51,514 | ||
Total assets | $ | 4,249,440 | $ | 3,448,555 |
Liabilities and members' equity: | ||||
Total current portion of long term debt | $ | 165,439 | $ | 165,092 |
Total other current liabilities | 333,651 | 295,860 | ||
Total long term debt | 336,743 | 344,309 | ||
Total other long term liabilities | 17,148 | 17,531 | ||
Total members' equity | 3,396,459 | 2,625,763 | ||
Total liabilities and members' equity | $ | 4,249,440 | $ | 3,448,555 |
Three Months Ended | Six Months Ended | |||||||||||
(unaudited) | $ Change | (unaudited) | $ Change | |||||||||
June 30, | June 30, | Favorable | June 30, | June 30, | Favorable | |||||||
2022 | 2021 | (Unfavorable) | 2022 | 2021 | (Unfavorable) | |||||||
Revenues: | ||||||||||||
Operating revenues | $ | 1,455,886 | $ | 571,859 | $ | 884,027 | $ | 2,436,578 | $ | 1,003,492 | $ | 1,433,086 |
Expenses: | ||||||||||||
Total costs and expenses less depreciation, amortization and accretion expense
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1,274,665 | 307,857 | (966,808) | 2,082,237 | 523,091 | (1,559,146) | ||||||
Depreciation, amortization and accretion expense
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31,317 | 11,995 | (19,322) | 57,809 | 23,682 | (34,127) | ||||||
Total costs and expenses | 1,305,982 | 319,852 | (986,130) | 2,140,046 | 546,773 | (1,593,273) | ||||||
Operating income | 149,904 | 252,007 | (102,103) | 296,532 | 456,719 | (160,187) | ||||||
Other income | 722 | 353 | 369 | 711 | 411 | 300 | ||||||
Interest and debt expense, net | (3,266) | (784) | (2,482) | (6,275) | (1,104) | (5,171) | ||||||
Net income | $ | 147,360 | $ | 251,576 | $ | (104,216) | $ | 290,968 | $ | 456,026 | $ | (165,058) |
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Aug. 9, 2022
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Three Months Ended | Six Months Ended | |||||||
Adjusted EBITDA | July 2, | July 3, | July 2, | July 3, | ||||
(U.S. dollars in thousands) | 2022 | 2021 | 2022 | 2021 | ||||
Net income attributable to Darling | $ | 201,996 | $ | 196,582 | $ | 390,049 | $ | 348,348 |
Depreciation and amortization | 93,113 | 79,222 | 172,359 | 157,756 | ||||
Interest expense | 24,008 | 15,268 | 39,611 | 31,696 | ||||
Income tax expense | 47,333 | 54,979 | 73,416 | 83,687 | ||||
Restructuring and asset impairment charges | 8,557 | - | 8,557 | 778 | ||||
Acquisition and integration costs | 5,358 | - | 9,131 | - | ||||
Foreign currency loss | 4,412 | 684 | 5,512 | 1,094 | ||||
Other expense, net | 302 | 1,198 | 1,044 | 2,357 | ||||
Equity in net income of Diamond Green Diesel | (73,680) | (125,788) | (145,484) | (228,013) | ||||
Equity in net income of other unconsolidated subsidiaries | (2,272) | (1,940) | (3,632) | (2,552) | ||||
Net income attributable to other noncontrolling interests | 2,833 | 1,487 | 5,511 | 3,139 | ||||
Adjusted EBITDA (Non-GAAP) | $ | 311,960 | $ | 221,692 | $ | 556,074 | $ | 398,290 |
Foreign currency exchange impact | 15,928 | (1) | - | 23,155 | (2) | - | ||
Pro forma Adjusted EBITDA to Foreign Currency (Non-GAAP) | $ | 327,888 | $ | 221,692 | $ | 579,229 | $ | 398,290 |
DGD Joint Venture Adjusted EBITDA (Darling's Share) | $ | 90,611 | $ | 132,001 | $ | 177,171 | $ | 240,201 |
Darling plus Darling's share of DGD Joint Venture Adjusted EBITDA | $ | 402,571 | $ | 353,693 | $ | 733,245 | $ | 638,491 |
(1) The average rate assumption used in this calculation was the actual fiscal average rate for the three months ended July 2, 2022 of €1.00:USD$1.06 and CAD$1.00:USD$0.78 as compared to the average rate for the three months ended July 3, 2021 of €1.00:USD$1.21 and CAD$1.00:USD$0.81, respectively. | ||||||||
(2) The average rate assumption used in this calculation was the actual fiscal average rate for the six months ended July 2, 2022 of €1.00:USD$1.09 and CAD$1.00:USD$0.79 as compared to the average rate for the six months ended July 3, 2021 of €1.00:USD$1.20 and CAD$1.00:USD$0.80, respectively. |
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