8-K
DARLING INGREDIENTS INC. (DAR)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
| Date of report (Date of earliest event reported) | February 27, 2024 | | --- | --- || DARLING INGREDIENTS INC. | | --- | | (Exact Name of Registrant as Specified in Charter) | | Delaware | 001-13323 | 36-2495346 | | --- | --- | --- | | (State or Other Jurisdiction<br>of Incorporation) | (Commission<br>File Number) | (IRS Employer<br>Identification No.) |
5601 N. MacArthur Blvd., Irving, Texas 75038
(Address of Principal Executive Offices) (Zip Code)
Registrant’s telephone number, including area code: (972) 717-0300
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | | --- | --- || ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | | --- | --- || ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | | --- | --- || ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | | --- | --- |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | |
|---|---|---|---|
| Common stock $0.01 par value per share | DAR | New York Stock Exchange | (“NYSE”) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
| ☐ | Emerging growth company |
|---|
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02. Results of Operations and Financial Condition.
On February 27, 2024, Darling Ingredients Inc. (the “Company”) issued a press release announcing financial results for the fourth quarter and fiscal year ended December 30, 2023. A copy of this press release is attached hereto as Exhibit 99.1.
The Company will hold a conference call and webcast on Wednesday, February 28, 2024 to discuss these financial results. The Company will have a slide presentation available to augment management's formal presentation, which will be accessible via the investor relations section of the Company's website. A copy of this slide presentation is attached hereto as Exhibit 99.2.
The Company is making reference to non-GAAP financial measures in both the press release and the conference call. A reconciliation of these non-GAAP financial measures to the comparable GAAP financial measures is contained in the attached press release.
The information in this Item 2.02, including the exhibits attached hereto, shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
| 99.1 | Press Release dated February 27, 2024 (furnished pursuant to Item 2.02). |
|---|---|
| 99.2 | Slide Presentation for February 28, 2024 Earnings Call (furnished pursuant to Item 2.02). |
| 104 | Cover Page Interactive Data File (embedded within Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| DARLING INGREDIENTS INC. | ||
|---|---|---|
| Date: February 27, 2024 | By: | /s/ John F. Sterling |
| John F. Sterling | ||
| Executive Vice President,<br>General Counsel |
3
Document
Exhibit 99.1
FOR IMMEDIATE RELEASE 
Feb. 27, 2024
Darling Ingredients Inc. Reports Fourth Quarter and Fiscal Year 2023 Results
Fiscal Year 2023 Highlights
•Net income of $647.7 million, or $3.99 per GAAP diluted share
•Net sales of $6.8 billion
•Combined adjusted EBITDA of $1,611.9 million
•Global ingredients business EBITDA of $1,109.9 million
•Received $163.6 million in cash dividends from Diamond Green Diesel
•Repurchased $52.9 million of common stock
IRVING, TEXAS - Darling Ingredients Inc.(NYSE: DAR) today reported net income of $84.5 million, or $0.52 per diluted share for fourth quarter of 2023, compared to net income of $156.6 million, or $0.96 per diluted share, for fourth quarter of 2022. The decrease in net income was primarily due to a decrease in Darling’s share of Diamond Green Diesel (DGD) earnings. The company also reported net sales of $1.6 billion for the fourth quarter of 2023, compared with net sales of $1.8 billion for the same period a year ago.
For the fiscal year ended Dec. 30, 2023, Darling Ingredients reported net sales of $6.8 billion, compared to net sales of $6.5 billion for fiscal year 2022. Net income for fiscal year 2023 was $647.7 million, or $3.99 per diluted share, as compared to net income of $737.7 million, or $4.49 per diluted share in fiscal year 2022.
“Darling Ingredients had another great year with its 6th record year of growth in volumes and combined adjusted EBITDA,” said Randall C. Stuewe, Darling Ingredients Chairman and Chief Executive Officer. “Our vertically integrated business continues to demonstrate that Darling Ingredients can deliver strong earnings that offsets commodity volatility. ”
DGD sold 336.6 million gallons of renewable diesel for the fourth quarter 2023 at an average of $0.23 per gallon EBITDA. In 2023, DGD sold 1.2 billion gallons of renewable diesel at an average of $0.81 per gallon EBITDA. Darling Ingredients received a total of $163.6 million in cash dividends from the joint venture in 2023.
Combined adjusted EBITDA for the fourth quarter 2023 was $350.9 million, compared to $413.0 million for the same period in 2022. Combined adjusted EBITDA for fiscal year 2023 totaled $1.61 billion, as compared to $1.54 billion in fiscal year 2022.
As of Dec. 30, 2023, Darling Ingredients had $126.5 million in cash and cash equivalents, and $832.5 million available under its committed revolving credit agreement. Total debt outstanding as of Dec. 30, 2023, was $4.4 billion. The leverage ratio as measured by the company’s bank covenant was 3.26X as of Dec. 30, 2023. Capital expenditures were $174.9 million for the fourth quarter 2023, and $555.5 million for fiscal year 2023.
“Darling Ingredients is committed to continuing to drive shareholder results. We have built a strong business and remain optimistic on a strong performance in 2024,” Stuewe said.
Page 1
Segment Financial Tables (in thousands)
| Feed Ingredients | Food Ingredients | Fuel Ingredients | Corporate | Total | ||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Three Months Ended December 30, 2023 (unaudited) | ||||||||||
| Net sales | $ | 1,045,642 | $ | 423,836 | $ | 144,605 | $ | — | $ | 1,614,083 |
| Cost of sales and operating expenses | 755,062 | 311,163 | 111,427 | — | 1,177,652 | |||||
| Gross Margin | 290,580 | 112,673 | 33,178 | — | 436,431 | |||||
| Loss (gain) on sale of assets | 1 | (8,243) | (40) | — | (8,282) | |||||
| Selling, general and administrative expenses | 77,281 | 30,195 | 6,714 | 18,430 | 132,620 | |||||
| Restructuring and asset impairment charges | 3,934 | 9,199 | — | — | 13,133 | |||||
| Acquisition and integration costs | — | — | — | 1,726 | 1,726 | |||||
| Change in fair value of contingent consideration | 5,167 | — | — | — | 5,167 | |||||
| Depreciation and amortization | 98,400 | 26,655 | 8,480 | 4,394 | 137,929 | |||||
| Equity in net income of Diamond Green Diesel | — | — | 4,690 | — | 4,690 | |||||
| Segment operating income/(loss) | $ | 105,797 | $ | 54,867 | $ | 22,714 | $ | (24,550) | $ | 158,828 |
| Equity in net income of other unconsolidated subsidiaries | 1,508 | — | — | — | 1,508 | |||||
| Segment income/(loss) | $ | 107,305 | $ | 54,867 | $ | 22,714 | $ | (24,550) | $ | 160,336 |
| Segment EBITDA | $ | 213,298 | $ | 90,721 | $ | 26,504 | $ | (18,430) | $ | 312,093 |
| DGD adjusted EBITDA (Darling's Share) | — | — | 38,816 | — | 38,816 | |||||
| Combined adjusted EBITDA | $ | 213,298 | $ | 90,721 | $ | 65,320 | $ | (18,430) | $ | 350,909 |
| Feed Ingredients | Food Ingredients | Fuel Ingredients | Corporate | Total | ||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Three Months Ended December 31, 2022 | ||||||||||
| Net sales | $ | 1,216,073 | $ | 387,733 | $ | 164,277 | $ | — | $ | 1,768,083 |
| Cost of sales and operating expenses | 950,778 | 294,417 | 134,093 | — | 1,379,288 | |||||
| Gross Margin | 265,295 | 93,316 | 30,184 | — | 388,795 | |||||
| Loss (gain) on sale of assets | 169 | (117) | 14 | — | 66 | |||||
| Selling, general and administrative expenses | 73,736 | 28,073 | 3,769 | 16,142 | 121,720 | |||||
| Restructuring and asset impairment charges | — | 21,109 | — | — | 21,109 | |||||
| Acquisition and integration costs | — | — | — | 2,738 | 2,738 | |||||
| Depreciation and amortization | 91,282 | 14,722 | 8,606 | 2,774 | 117,384 | |||||
| Equity in net income of Diamond Green Diesel | — | — | 123,448 | — | 123,448 | |||||
| Segment operating income/(loss) | $ | 100,108 | $ | 29,529 | $ | 141,243 | $ | (21,654) | $ | 249,226 |
| Equity in net loss of other unconsolidated subsidiaries | (831) | — | — | — | (831) | |||||
| Segment income/(loss) | $ | 99,277 | $ | 29,529 | $ | 141,243 | $ | (21,654) | $ | 248,395 |
| Segment EBITDA | $ | 191,390 | $ | 65,360 | $ | 26,401 | $ | (16,142) | $ | 267,009 |
| DGD adjusted EBITDA (Darling's Share) | — | — | 145,984 | — | 145,984 | |||||
| Combined adjusted EBITDA | $ | 191,390 | $ | 65,360 | $ | 172,385 | $ | (16,142) | $ | 412,993 |
Page 2
Segment Financial Tables (in thousands)
| Feed Ingredients | Food Ingredients | Fuel Ingredients | Corporate | Total | ||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Twelve Months Ended December 30, 2023 (unaudited) | ||||||||||
| Net sales | $ | 4,472,592 | $ | 1,752,065 | $ | 563,423 | $ | — | $ | 6,788,080 |
| Cost of sales and operating expenses | 3,385,859 | 1,310,581 | 446,620 | — | 5,143,060 | |||||
| Gross Margin | 1,086,733 | 441,484 | 116,803 | — | 1,645,020 | |||||
| Loss (gain) on sale of assets | 814 | (8,144) | (91) | — | (7,421) | |||||
| Selling, general and administrative expenses | 310,363 | 128,464 | 23,543 | 80,164 | 542,534 | |||||
| Restructuring and asset impairment charges | 4,026 | 14,527 | — | — | 18,553 | |||||
| Acquisition and integration costs | — | — | — | 13,884 | 13,884 | |||||
| Change in fair value of contingent consideration | (7,891) | — | — | — | (7,891) | |||||
| Depreciation and amortization | 360,249 | 94,991 | 34,466 | 12,309 | 502,015 | |||||
| Equity in net income of Diamond Green Diesel | — | — | 366,380 | — | 366,380 | |||||
| Segment operating income/(loss) | $ | 419,172 | $ | 211,646 | $ | 425,265 | $ | (106,357) | $ | 949,726 |
| Equity in net income of other unconsolidated subsidiaries | 5,011 | — | — | — | 5,011 | |||||
| Segment income/(loss) | $ | 424,183 | $ | 211,646 | $ | 425,265 | $ | (106,357) | $ | 954,737 |
| Segment EBITDA | $ | 775,556 | $ | 321,164 | $ | 93,351 | $ | (80,164) | $ | 1,109,907 |
| DGD adjusted EBITDA (Darling's Share) | — | — | 501,987 | — | 501,987 | |||||
| Combined adjusted EBITDA | $ | 775,556 | $ | 321,164 | $ | 595,338 | $ | (80,164) | $ | 1,611,894 |
| Feed Ingredients | Food Ingredients | Fuel Ingredients | Corporate | Total | ||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Twelve Months Ended December 31, 2022 | ||||||||||
| Net sales | $ | 4,539,000 | $ | 1,459,630 | $ | 533,574 | $ | — | $ | 6,532,204 |
| Cost of sales and operating expenses | 3,473,506 | 1,102,250 | 426,853 | — | 5,002,609 | |||||
| Gross Margin | 1,065,494 | 357,380 | 106,721 | — | 1,529,595 | |||||
| Gain on sale of assets | (3,426) | (1,008) | (60) | — | (4,494) | |||||
| Selling, general and administrative expenses | 258,781 | 101,681 | 13,690 | 62,456 | 436,608 | |||||
| Restructuring and asset impairment charges | 8,557 | 21,109 | — | — | 29,666 | |||||
| Acquisition and integration costs | — | — | — | 16,372 | 16,372 | |||||
| Depreciation and amortization | 295,249 | 59,029 | 29,500 | 10,943 | 394,721 | |||||
| Equity in net income of Diamond Green Diesel | — | — | 372,346 | — | 372,346 | |||||
| Segment operating income/(loss) | $ | 506,333 | $ | 176,569 | $ | 435,937 | $ | (89,771) | $ | 1,029,068 |
| Equity in net income of other unconsolidated subsidiaries | 5,102 | — | — | — | 5,102 | |||||
| Segment income/(loss) | $ | 511,435 | $ | 176,569 | $ | 435,937 | $ | (89,771) | $ | 1,034,170 |
| Segment EBITDA | $ | 810,139 | $ | 256,707 | $ | 93,091 | $ | (62,456) | $ | 1,097,481 |
| DGD adjusted EBITDA (Darling's Share) | — | — | 443,487 | — | 443,487 | |||||
| Combined adjusted EBITDA | $ | 810,139 | $ | 256,707 | $ | 536,578 | $ | (62,456) | $ | 1,540,968 |
Segment EBITDA consists of segment income (loss), less equity in net income/loss from unconsolidated subsidiaries, less equity in net income of Diamond Green Diesel, plus depreciation and amortization, acquisition and integration costs, restructuring and asset impairment charges, change in fair value of contingent consideration, plus Darling’s share of DGD Adjusted EBITDA.
Page 3
Darling Ingredients Inc. and Subsidiaries
Consolidated Balance Sheets
December 30, 2023 and December 31, 2022
| December 30, 2023 | December 31, 2022 | ||||
|---|---|---|---|---|---|
| ASSETS | (unaudited) | ||||
| Current assets: | |||||
| Cash and cash equivalents | $ | 126,502 | $ | 127,016 | |
| Restricted cash | 292 | 315 | |||
| Accounts receivable, net | 626,008 | 559,695 | |||
| Accounts receivable due from related party - Diamond Green Diesel | 172,283 | 116,878 | |||
| Inventories | 758,739 | 673,621 | |||
| Prepaid expenses | 105,657 | 85,665 | |||
| Income taxes refundable | 23,599 | 18,583 | |||
| Other current assets | 42,586 | 56,324 | |||
| Total current assets | 1,855,666 | 1,638,097 | |||
| Property, plant and equipment, net | 2,935,185 | 2,462,082 | |||
| Intangible assets, net | 1,075,892 | 865,122 | |||
| Goodwill | 2,484,502 | 1,970,377 | |||
| Investment in unconsolidated subsidiaries | 2,251,629 | 1,926,395 | |||
| Operating lease right-of-use assets | 205,539 | 186,141 | |||
| Other assets | 234,960 | 136,268 | |||
| Deferred income taxes | 17,711 | 17,888 | |||
| $ | 11,061,084 | $ | 9,202,370 | ||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||
| Current liabilities: | |||||
| Current portion of long-term debt | $ | 60,703 | $ | 69,846 | |
| Accounts payable, principally trade | 425,588 | 472,491 | |||
| Income taxes payable | 15,522 | 44,851 | |||
| Current operating lease liabilities | 55,325 | 49,232 | |||
| Accrued expenses | 440,999 | 432,023 | |||
| Total current liabilities | 998,137 | 1,068,443 | |||
| Long-term debt, net of current portion | 4,366,370 | 3,314,969 | |||
| Long-term operating lease liabilities | 154,903 | 141,703 | |||
| Other non-current liabilities | 349,809 | 298,933 | |||
| Deferred income taxes | 498,174 | 481,832 | |||
| Total liabilities | 6,367,393 | 5,305,880 | |||
| Commitments and contingencies | |||||
| Stockholders' equity: | |||||
| Common stock, $0.01 par value; | 1,744 | 1,736 | |||
| Additional paid-in capital | 1,697,787 | 1,660,084 | |||
| Treasury stock, at cost | (629,008) | (554,451) | |||
| Accumulated other comprehensive loss | (198,346) | (383,874) | |||
| Retained earnings | 3,733,254 | 3,085,528 | |||
| Total Darling's stockholders' equity | 4,605,431 | 3,809,023 | |||
| Noncontrolling interests | 88,260 | 87,467 | |||
| Total Stockholders' Equity | 4,693,691 | 3,896,490 | |||
| $ | 11,061,084 | $ | 9,202,370 |
Page 4
Darling Ingredients Inc. and Subsidiaries
Consolidated Operating Results
For the Three and Twelve Months Ended Dec. 30, 2023 and Dec. 31, 2022
(in thousands, except per share data)
| Three Months Ended | Twelve Months Ended | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| (unaudited) | Change | (unaudited) | Change | |||||||
| December 30, | December 31, | Favorable | December 30, | December 31, | Favorable | |||||
| 2023 | 2022 | (Unfavorable) | 2023 | 2022 | (Unfavorable) | |||||
| Net sales | $ | 1,614,083 | $ | 1,768,083 | $ | 6,788,080 | $ | 6,532,204 | ||
| Costs and expenses: | ||||||||||
| Cost of sales and operating expenses | 1,177,652 | 1,379,288 | 201,636 | 5,143,060 | 5,002,609 | (140,451) | ||||
| (Gain) loss on sale of assets | (8,282) | 66 | 8,348 | (7,421) | (4,494) | 2,927 | ||||
| Selling, general and administrative expenses | 132,620 | 121,720 | (10,900) | 542,534 | 436,608 | (105,926) | ||||
| Restructuring and asset impairment charges | 13,133 | 21,109 | 7,976 | 18,553 | 29,666 | 11,113 | ||||
| Acquisition and integration costs | 1,726 | 2,738 | 1,012 | 13,884 | 16,372 | 2,488 | ||||
| Change in fair value of contingent consideration | 5,167 | — | (5,167) | (7,891) | — | 7,891 | ||||
| Depreciation and amortization | 137,929 | 117,384 | (20,545) | 502,015 | 394,721 | (107,294) | ||||
| Total costs and expenses | 1,459,945 | 1,642,305 | 182,360 | 6,204,734 | 5,875,482 | (329,252) | ||||
| Equity in net income of Diamond Green Diesel | 4,690 | 123,448 | (118,758) | 366,380 | 372,346 | (5,966) | ||||
| Operating income | 158,828 | 249,226 | (90,398) | 949,726 | 1,029,068 | (79,342) | ||||
| Other expense: | ||||||||||
| Interest expense | (68,453) | (46,139) | (22,314) | (259,223) | (125,566) | (133,657) | ||||
| Foreign currency gain (loss) | (206) | (5,272) | 5,066 | 8,133 | (11,277) | 19,410 | ||||
| Other income (expense), net | 2,825 | 242 | 2,583 | 16,310 | (3,609) | 19,919 | ||||
| Total other expense | (65,834) | (51,169) | (14,665) | (234,780) | (140,452) | (94,328) | ||||
| Equity in net income (loss) of other unconsolidated subsidiaries | 1,508 | (831) | 2,339 | 5,011 | 5,102 | (91) | ||||
| Income from operations before income taxes | 94,502 | 197,226 | (102,724) | 719,957 | 893,718 | (173,761) | ||||
| Income tax expense | 7,246 | 37,995 | 30,749 | 59,568 | 146,626 | 87,058 | ||||
| Net income | 87,256 | 159,231 | (71,975) | 660,389 | 747,092 | (86,703) | ||||
| Net income attributable to noncontrolling interests | (2,740) | (2,671) | (69) | (12,663) | (9,402) | (3,261) | ||||
| Net income attributable to Darling | $ | 84,516 | $ | 156,560 | $ | 647,726 | $ | 737,690 | ||
| Basic income per share: | $ | 0.53 | $ | 0.98 | $ | 4.05 | $ | 4.58 | ||
| Diluted income per share: | $ | 0.52 | $ | 0.96 | $ | 3.99 | $ | 4.49 | ||
| Number of diluted common shares: | 161,935 | 163,504 | 162,387 | 164,121 |
All values are in US Dollars.
Page 5
Darling Ingredients Inc. and Subsidiaries
Consolidated Statement of Cash Flows
For the Twelve Months Ended December 30, 2023 and December 31, 2022
(in thousands)
| Twelve Months Ended | ||||
|---|---|---|---|---|
| (unaudited) | ||||
| December 30, | December 31, | |||
| Cash flows from operating activities: | 2023 | 2022 | ||
| Net income | $ | 660,389 | $ | 747,092 |
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||
| Depreciation and amortization | 502,015 | 394,721 | ||
| Gain on sale of assets | (7,421) | (4,494) | ||
| Asset impairment | 4,734 | 29,666 | ||
| Deferred taxes | (22,241) | 46,734 | ||
| Change in fair value of contingent consideration | (7,891) | — | ||
| Decrease in long-term pension liability | (1,040) | (7,037) | ||
| Stock-based compensation expense | 33,156 | 25,005 | ||
| Write-off deferred loan costs | 653 | — | ||
| Deferred loan cost amortization | 6,216 | 4,984 | ||
| Equity in net income of Diamond Green Diesel and other unconsolidated subsidiaries | (371,391) | (377,448) | ||
| Distribution of earnings from Diamond Green Diesel and other unconsolidated subsidiaries | 168,277 | 95,546 | ||
| Changes in operating assets and liabilities, net of effects from acquisitions: | ||||
| Accounts receivable | (10,832) | (56,543) | ||
| Income taxes refundable/payable | (39,933) | (3,495) | ||
| Inventories and prepaid expenses | 49,582 | (130,170) | ||
| Accounts payable and accrued expenses | (82,939) | 65,936 | ||
| Other | 17,929 | (16,758) | ||
| Net cash provided by operating activities | 899,263 | 813,739 | ||
| Cash flows from investing activities: | ||||
| Capital expenditures | (555,480) | (391,309) | ||
| Acquisition, net of cash acquired | (1,093,183) | (1,772,437) | ||
| Investment in Diamond Green Diesel | (75,000) | (264,750) | ||
| Investment in other unconsolidated subsidiaries | (27) | — | ||
| Loan to Diamond Green Diesel | — | (50,000) | ||
| Loan repayment from Diamond Green Diesel | 25,000 | 50,000 | ||
| Gross proceeds from sale of property, plant and equipment and other assets | 10,748 | 13,442 | ||
| Proceeds from insurance settlement | 14,014 | — | ||
| Payments related to routes and other intangibles | (1,524) | (1,492) | ||
| Net cash used in investing activities | (1,675,452) | (2,416,546) | ||
| Cash flows from financing activities: | ||||
| Proceeds from long-term debt | 817,101 | 1,934,885 | ||
| Payments on long-term debt | (319,367) | (63,078) | ||
| Borrowings from revolving credit facility | 2,666,360 | 1,873,795 | ||
| Payments on revolving credit facility | (2,194,902) | (1,897,280) | ||
| Net cash overdraft financing | (9,780) | 24,069 | ||
| Acquisition hold-back payments | (3,793) | — | ||
| Deferred loan costs | (9) | (16,780) | ||
| Repurchase of common stock | (52,941) | (125,531) | ||
| Minimum withholding taxes paid on stock awards | (17,296) | (46,944) | ||
| Distributions to noncontrolling interests | (9,081) | (4,532) | ||
| Net cash provided by financing activities | 876,292 | 1,678,604 | ||
| Effect of exchange rate changes on cash flows | 14,179 | 5,299 | ||
| Net increase in cash, cash equivalents and restricted cash | 114,282 | 81,096 | ||
| Cash, cash equivalents and restricted cash at beginning of period | 150,168 | 69,072 | ||
| Cash, cash equivalents and restricted cash at end of period | $ | 264,450 | $ | 150,168 |
Page 6
Diamond Green Diesel Joint Venture
Condensed Consolidated Balance Sheets
December 31, 2023 and December 31, 2022
(in thousands)
| December 31, | December 31, | |||
|---|---|---|---|---|
| 2023 | 2022 | |||
| Assets: | ||||
| Total current assets | $ | 1,877,430 | $ | 1,304,805 |
| Property, plant and equipment, net | 3,838,800 | 3,866,854 | ||
| Other assets | 89,697 | 61,665 | ||
| Total assets | $ | 5,805,927 | $ | 5,233,324 |
| Liabilities and members' equity: | ||||
| Total current portion of long term debt | $ | 278,639 | $ | 217,066 |
| Total other current liabilities | 417,918 | 515,023 | ||
| Total long term debt | 737,097 | 774,783 | ||
| Total other long term liabilities | 16,996 | 17,249 | ||
| Total members' equity | 4,355,277 | 3,709,203 | ||
| Total liabilities and members' equity | $ | 5,805,927 | $ | 5,233,324 |
Diamond Green Diesel Joint Venture
Operating Financial Results
For the Three and Twelve Months Ended December 31, 2023 and 2022
(in thousands)
| Three Months Ended | Twelve Months Ended | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Change | Change | |||||||||
| December 31, | December 31, | Favorable | December 31, | December 31, | Favorable | |||||
| 2023 | 2022 | (Unfavorable) | 2023 | 2022 | (Unfavorable) | |||||
| Revenues: | ||||||||||
| Operating revenues | $ | 1,633,795 | $ | 1,594,552 | $ | 6,990,622 | $ | 5,501,166 | ||
| Expenses: | ||||||||||
| Total costs and expenses less lower of cost or market inventory valuation and depreciation, amortization and accretion expense | 1,495,293 | 1,302,584 | (192,709) | 5,925,778 | 4,614,192 | (1,311,586) | ||||
| Lower of cost or market (LCM) inventory valuation adjustment | 60,871 | — | (60,871) | 60,871 | — | (60,871) | ||||
| Depreciation, amortization and accretion expense | 58,881 | 36,054 | (22,827) | 230,921 | 125,656 | (105,265) | ||||
| Total costs and expenses | 1,615,045 | 1,338,638 | (276,407) | 6,217,570 | 4,739,848 | (1,477,722) | ||||
| Operating income | 18,750 | 255,914 | (237,164) | 773,052 | 761,318 | 11,734 | ||||
| Other income | 3,454 | 1,244 | 2,210 | 10,317 | 3,170 | 7,147 | ||||
| Interest and debt expense, net | (12,072) | (10,262) | (1,810) | (49,857) | (19,796) | (30,061) | ||||
| Income before income tax expense | 10,132 | 246,896 | (236,764) | 733,512 | 744,692 | (11,180) | ||||
| Income tax expense | 752 | — | (752) | 752 | — | (752) | ||||
| Net income | $ | 9,380 | $ | 246,896 | $ | 732,760 | $ | 744,692 |
All values are in US Dollars.
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Darling Ingredients Inc. reports Adjusted EBITDA results, which is a Non-GAAP financial measure, as a compliment to results provided in accordance with generally accepted accounting principles (GAAP) (for additional information, see “Use of Non-GAAP Financial Measures” included later in this media release). The Company believes that Adjusted EBITDA provides additional useful information to investors. Adjusted EBITDA, as the Company uses the term, is calculated below:
Reconciliation of Net Income to (Non-GAAP) Adjusted EBITDA and (Non-GAAP) Pro forma
Adjusted EBITDA to Foreign Currency
For the Three and Twelve Months Ended December 30, 2023 and December 31, 2022
(in thousands)
| Twelve Months Ended | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| (unaudited) | |||||||||
| Adjusted EBITDA | December 31, | December 30, | December 31, | ||||||
| (U.S. dollars in thousands) | 2022 | 2023 | 2022 | ||||||
| Net income attributable to Darling | 84,516 | $ | 156,560 | $ | 647,726 | $ | 737,690 | ||
| Depreciation and amortization | 117,384 | 502,015 | 394,721 | ||||||
| Interest expense | 46,139 | 259,223 | 125,566 | ||||||
| Income tax expense | 37,995 | 59,568 | 146,626 | ||||||
| Restructuring and asset impairment charges | 21,109 | 18,553 | 29,666 | ||||||
| Acquisition and integration costs | 2,738 | 13,884 | 16,372 | ||||||
| Change in fair value of contingent consideration | — | (7,891) | — | ||||||
| Foreign currency (gain) loss | 5,272 | (8,133) | 11,277 | ||||||
| Other (income) expense, net | (242) | (16,310) | 3,609 | ||||||
| Equity in net income of Diamond Green Diesel | (123,448) | (366,380) | (372,346) | ||||||
| Equity in net (income) loss of other unconsolidated subsidiaries | 831 | (5,011) | (5,102) | ||||||
| Net income attributable to noncontrolling interests | 2,671 | 12,663 | 9,402 | ||||||
| Adjusted EBITDA (Non-GAAP) | 312,093 | $ | 267,009 | $ | 1,109,907 | $ | 1,097,481 | ||
| Foreign currency exchange impact | (1) | (10,830) | (2) | ||||||
| Pro forma Adjusted EBITDA to Foreign Currency (Non-GAAP) | 304,161 | $ | 267,009 | $ | 1,099,077 | $ | 1,097,481 | ||
| DGD Joint Venture Adjusted EBITDA (Darling's share) | 38,816 | $ | 145,984 | $ | 501,987 | $ | 443,487 | ||
| Darling plus Darling's share of DGD Joint Venture Adjusted EBITDA | 350,909 | $ | 412,993 | $ | 1,611,894 | $ | 1,540,968 | ||
| (1) The average rate assumption used in this calculation were the actual average rate for the three months ended December 30, 2023 of 1.00:1.07, R1.00:0.20 and CAD1.00:0.73 as compared to the average rate for the three months ended December 31, 2022 of 1.00:1.02, R1.00:0.19 and CAD1.00:0.74, respectively. | |||||||||
| (2) The average rate assumption used in this calculation were the actual average rate for the twelve months ended December 30, 2023 of 1.00:1.08, R1.00:0.20 and CAD1.00:0.74, as compared to the average rate for the twelve months ended December 31, 2022 of 1.00:1.05, R1.00:0.19 and CAD1.00:0.77, respectively. |
All values are in US Dollars.
About Darling Ingredients
A pioneer in circularity, Darling Ingredients Inc. (NYSE: DAR) takes material from the animal agriculture and food industries, and transforms them into valuable ingredients that nourish people, feed animals and crops, and fuel the world with renewable energy. The company operates over 260 facilities in more than 15 countries and processes about 15% of the world’s animal agricultural by-products, produces about 30% of the world’s collagen (both gelatin
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and hydrolyzed collagen), and is one of the largest producers of renewable energy. To learn more, visit darlingii.com. Follow us on LinkedIn.
Darling Ingredients Inc. will host a conference call to discuss the Company’s fourth quarter and fiscal year 2023 financial results at 9 a.m. Eastern Time (8 a.m. Central Time) on Feb. 28, 2024.
To join the call as a participant to ask a question, please register in advance to receive a confirmation email with the dial-in number and PIN for immediate access on Feb. 28, 2024, or call 844-868-8847 (United States) or 412-317-6593 (International) and ask for "The Darling Ingredients Call” that day.
A replay of the call will be available online via the webcast registration link and via phone at 877-344-7529 (United States), 855-669-9658 (Canada) or 412-317-0088 (International) using reference passcode 7150600. The phone replay will be available two hours after the call concludes through March 6, 2024.
Use of Non-GAAP Financial Measures:
Adjusted EBITDA is not a recognized accounting measurement under GAAP; it should not be considered as an alternative to net income, as a measure of operating results, or as an alternative to cash flow as a measure of liquidity. It is presented here not as an alternative to net income, but rather as a measure of the Company's operating performance. Since EBITDA (generally, net income plus interest expense, taxes, depreciation and amortization) is not calculated identically by all companies, the presentation in this report may not be comparable to EBITDA or Adjusted EBITDA presentations disclosed by other companies. Adjusted EBITDA is calculated above and represents for any relevant period, net income/(loss) plus depreciation and amortization, restructuring and asset impairment charges, acquisition and integration costs, change in fair value of contingent consideration, interest expense, income tax provision, other income/(expense) and equity in net (income)/loss of unconsolidated subsidiary. Management believes that Adjusted EBITDA is useful in evaluating the Company's operating performance compared to that of other companies in its industry because the calculation of Adjusted EBITDA generally eliminates the effects of financing, income taxes and certain non-cash and other items that may vary for different companies for reasons unrelated to overall operating performance.
Pro forma Adjusted EBITDA to Foreign Currency is not a recognized accounting measurement under GAAP. The Company evaluates the impact of foreign currency on its adjusted EBITDA. DGD Joint Venture Adjusted EBITDA (Darling's share) is not reflected in the Adjusted EBITDA or the Pro forma Adjusted EBITDA to Foreign Currency (Non-GAAP).
The Company’s management uses Adjusted EBITDA as a measure to evaluate performance and for other discretionary purposes. In addition to the foregoing, management also uses or will use Adjusted EBITDA to measure compliance with certain financial covenants under the Company’s Senior Secured Credit Facilities, 6% Notes, 5.25% Notes and 3.625% Notes that were outstanding at December 30, 2023. However, the amounts shown below for Adjusted EBITDA differ from the amounts calculated under similarly titled definitions in the Company’s Senior Secured Credit Facilities, 6% Notes, 5.25% Notes and 3.625% Notes, as those definitions permit further adjustments to reflect certain other nonrecurring costs, non-cash charges and cash dividends from the DGD Joint Venture. Additionally, the Company evaluates the impact of foreign exchange on operating cash flow, which is defined as segment operating income (loss) plus depreciation and amortization.
DGD Joint Venture Adjusted EBITDA (Darling’s share) is not a recognized accounting measure under GAAP; it should not be considered as an alternative to net income or equity in net income of Diamond Green Diesel, as a measure of operating results, or as an alternative to cash flow as a measure of liquidity and is not intended to be a presentation in accordance with GAAP. The Company calculates DGD Joint Venture Adjusted EBITDA (Darling’s share) by taking DGD’s operating income plus DGD’s depreciation, amortization and accretion expense and then multiplying by 50% to get Darling’s share of DGD’s EBITDA.
Information reconciling forward-looking combined adjusted EBITDA to net income is unavailable to the Company without unreasonable effort. The Company is not able to provide reconciliations of combined adjusted EBITDA to net income because certain items required for such reconciliations are outside of the Company’s control and/or cannot be reasonably predicted, such as the impact of volatile commodity prices on the Company’s operations, impact of foreign currency exchange fluctuations, depreciation and amortization and the provision for income taxes. Preparation of such reconciliations for Darling Ingredients Inc. and the Company’s joint venture, Diamond Green Diesel, would require a forward-looking balance sheet, statement of operations and statement of cash flows, prepared in accordance with GAAP for each entity, and such forward-looking financial statements are unavailable to the Company without unreasonable effort. The Company provides guidance for its combined adjusted EBITDA outlook that it believes will be achieved; however, it cannot accurately predict all the components of the combined adjusted EBITDA calculation.
EBITDA per gallon is not a recognized accounting measurement under GAAP; it should not be considered as an alternative to net income or equity in income of Diamond Green Diesel, as a measure of operating results, or as an alternative to cash flow as a measure of liquidity and is not intended to be a presentation in accordance with GAAP. EBITDA per gallon is presented here
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not as an alternative to net income or equity in income of Diamond Green Diesel, but rather as a measure of Diamond Green Diesel's operating performance. Since EBITDA per gallon (generally, net income plus interest expense, taxes, depreciation and amortization divided by total gallons sold) is not calculated identically by all companies, this presentation may not be comparable to EBITDA per gallon presentations disclosed by other companies. Management believes that EBITDA per gallon is useful in evaluating Diamond Green Diesel's operating performance compared to that of other companies in its industry because the calculation of EBITDA per gallon generally eliminates the effects of financing, income taxes and certain non-cash and other items presented on a per gallon basis that may vary for different companies for reasons unrelated to overall operating performance.
Cautionary Statements Regarding Forward-Looking Information:
This media release includes “forward-looking” statements that are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the statements. Statements that are not statements of historical facts are forward-looking statements and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Words such as “estimate,” “guidance,” “outlook,” “project,” “planned,” “contemplate,” “potential,” “possible,” “proposed,” “intend,” “believe,” “anticipate,” “expect,” “may,” “will,” “would,” “should,” “could,” and similar expressions are intended to identify forward-looking statements. All statements other than statements of historical facts included in this release are forward-looking statements. Forward-looking statements are based on the Company's current expectations and assumptions regarding its business, the economy and other future conditions. The Company cautions readers that any such forward-looking statements it makes are not guarantees of future performance and that actual results may differ materially from anticipated results or expectations expressed in its forward-looking statements as a result of a variety of factors, including many that are beyond the Company's control.
Important factors that could cause actual results to differ materially from the Company’s expectations include: existing and unknown future limitations on the ability of the Company's direct and indirect subsidiaries to make their cash flow available to the Company for payments on the Company's indebtedness or other purposes; reduced demands or prices for biofuels, biogases or renewable electricity; global demands for grain and oilseed commodities, which have exhibited volatility, and can impact the cost of feed for cattle, hogs and poultry, thus affecting available rendering feedstock and selling prices for the Company’s products; reductions in raw material volumes available to the Company due to weak margins in the meat production industry as a result of higher feed costs, reduced consumer demand, reduced volume due to government regulations affecting animal production or other factors, reduced volume from food service establishments, or otherwise; reduced demand for animal feed; reduced finished product prices, including a decline in fat, used cooking oil, protein or collagen (including, without limitation, collagen peptides and gelatin) finished product prices; changes to government policies around the world relating to renewable fuels and greenhouse gas (“GHG”) emissions that adversely affect prices, margins or markets (including for the DGD Joint Venture), including programs like the U.S. government's renewable fuel standard, low carbon fuel standards (“LCFS”) and tax credits for biofuels both in the United States and abroad; climate related adverse results, including with respect to the Company’s climate goals, targets or commitments; possible product recall resulting from developments relating to the discovery of unauthorized adulterations to food or food additives or products which do not meet specifications, contract requirements or regulatory standards; the occurrence of 2009 H1N1 flu (initially known as “Swine Flu”), highly pathogenic strains of avian influenza (collectively known as “Bird Flu”), severe acute respiratory syndrome (“SARS”), bovine spongiform encephalopathy (or “BSE”), porcine epidemic diarrhea (“PED”) or other diseases associated with animal origin in the United States or elsewhere, such as the outbreak of African Swine Fever in China and elsewhere; the occurrence of pandemics, epidemics or disease outbreaks, such as the COVID-19 outbreak; unanticipated costs and/or reductions in raw material volumes related to the Company’s compliance with the existing or unforeseen new U.S. or foreign (including, without limitation, China) regulations (including new or modified animal feed, Bird Flu, SARS, PED, BSE or ASF or similar or unanticipated regulations) affecting the industries in which the Company operates or its value added products; risks associated with the DGD Joint Venture, including possible unanticipated operating disruptions, a decline in margins on the products produced by the DGD Joint Venture and issues relating to the announced SAF upgrade project; risks and uncertainties relating to international sales and operations, including imposition of tariffs, quotas, trade barriers and other trade protections imposed by foreign countries; tax changes, such as the introduction of a global minimum tax; difficulties or a significant disruption (including, without limitation, due to cyber-attack) in the Company’s information systems, networks or the confidentiality, availability or integrity of our data or failure to implement new systems and software successfully; risks relating to possible third party claims of intellectual property infringement; increased contributions to the Company’s pension and benefit plans, including multiemployer and employer-sponsored defined benefit pension plans as required by legislation, regulation or other applicable U.S. or foreign law or resulting from a U.S. mass withdrawal event; bad debt write-offs; loss of or failure to obtain necessary permits and registrations; continued or escalated conflict in the Middle East, North Korea, Ukraine or elsewhere, including the Russia-Ukraine war and the Israeli-Palestinian conflict and other associated or emerging conflicts in the Middle East; uncertainty regarding the exit of the U.K. from the European Union; and/or unfavorable export or import markets. These factors, coupled with volatile prices for natural gas and diesel fuel, inflation rates, climate conditions, currency exchange fluctuations, general performance of the U.S. and global economies, disturbances in world financial, credit, commodities and stock markets, and any decline in consumer confidence and discretionary spending, including the inability of consumers and
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companies to obtain credit due to lack of liquidity in the financial markets, among others, could cause actual results to vary materially from the forward-looking statements included in this report or negatively impact the Company’s results of operations. Among other things, future profitability may be affected by the Company’s ability to grow its business, which faces competition from companies that may have substantially greater resources than the Company. The Company’s announced share repurchase program may be suspended or discontinued at any time and purchases of shares under the program are subject to market conditions and other factors, which are likely to change from time to time. For more detailed discussion of these factors and other risks and uncertainties regarding the Company, its business and the industries in which it operates, see the Company’s filings with the SEC, including the Risk Factors discussion in Item 1A of Part I of the Company's Annual Report on Form 10-K for the fiscal year ended December 30, 2023. The Company cautions readers that all forward-looking statements speak only as of the date made, and the Company undertakes no obligation to update any forward-looking statements, whether as a result of changes in circumstances, new events or otherwise.
#
Darling Ingredients Contacts
Investors: Suann Guthrie
Senior VP, Investor Relations, Sustainability & Communications
(469) 214-8202; suann.guthrie@darlingii.com
Media: Jillian Fleming
Director, Global Communications
(972) 541-7115; jillian.fleming@darlingii.com
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darlingingredientsq4fy23
Exhibit 99.2
• • • • • •
(2) Per Bank Covenant
$244 $312 $274 $267 $289 $261 $248 $312 $87 $91 $120 $146 $129 $247 $86 $39 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Global Ingredients DGD (In millions) $330.7 $394.7$402.6 $418.4$413.0 $508.3 $334.3 Food Feed Fuel (1)
• • • •
• • • US $ (in millions) Q4 2023 Q4 2022 FY 2023 FY 2022 Net Sales $ 423,836 $ 387,733 $ 1,752,065 $ 1,459,630 Cost of sales & operating expenses 311,163 294,417 1,310,581 1,102,250 Gross Margin $ 112,673 $ 93,316 $ 441,484 $ 357,380 Gain on sale of assets (8,243) (117) (8,144) (1,008) Selling, general and administrative expenses 30,195 28,073 128,464 101,681 Restructuring and asset impairment charges 9,199 21,109 14,527 21,109 Depreciation and amortization 26,655 14,722 94,991 59,029 Segment Operating Income $ 54,867 $ 29,529 $ 211,646 $ 176,569 Segment EBITDA $ 90,721 $ 65,360 $ 321,164 $ 256,707 Raw material processed (mt)* 300,000 277,000 1,220,000 1,100,000
Collagen Other products
• • •
$0.00 $0.50 $1.00 $1.50 $2.00 $2.50 $3.00 $3.50 $0.00 $0.10 $0.20 $0.30 $0.40 $0.50 $0.60 $0.70 Quarterly Avg. Prices D4 RINs (1.7 Multiple) & Yellow Grease - IL D4 RINs (x 1.7) (Right Axis) Yellow Grease - Illinois (Left Axis) $/lb • •
(1) Includes Fuel Segment base EBITDA and Darling's share of DGD EBITDA. (2) Excludes feed stock (raw material) processed at the DGD joint venture.
2023 Finished Product Pricing Feed Segment Ingredients January February March Q1 Avg. April May June Q2 Avg. July August Sept. Q3 Avg. Oct. Nov. Dec. Q4 Avg. Year Avg. Bleachable Fancy Tallow - Chicago Renderer / cwt $68.00 $60.92 $55.80 $61.39 $53.29 $57.00 $59.29 $56.61 $66.10 $69.04 $70.28 $68.66 $62.36 $52.90 $46.89 $54.54 $60.30 Yellow Grease - Illinois / cwt $58.58 $49.25 $46.13 $51.10 $44.26 $47.43 $46.26 $46.06 $49.08 $52.98 $54.85 $52.39 $46.73 $39.83 $34.88 $40.69 $47.56 Used Cooking Oil (UCO) - Illinois / cwt $61.88 $51.71 $48.00 $53.61 $48.00 $48.00 $49.31 $48.45 $52.20 $55.72 $55.95 $54.72 $48.80 $41.38 $39.23 $42.94 $49.93 Meat and Bone Meal - Ruminant - IL/ ton $418.00 $433.29 $453.48 $435.85 $461.97 $467.95 $462.50 $464.27 $462.50 $457.17 $445.00 $455.04 $431.36 $369.00 $310.00 $372.44 $431.90 Poultry By-Product Meal - Feed Grade - Mid South/ton $397.50 $397.50 $422.93 $406.94 $472.50 $487.84 $495.00 $485.56 $492.50 $488.04 $482.50 $488.13 $480.11 $442.88 $412.50 $446.37 $456.75 Poultry By-Product Meal - Pet Food - Mid South/ton $668.13 $716.45 $832.07 $743.75 $937.50 $975.00 $889.98 $934.67 $764.13 $795.65 $830.00 $796.10 $797.73 $666.75 $592.50 $689.80 $791.08 2023 Vegetable Oils Pricing Competing Ingredient for Feed Segment fats & biofuel feedstock January February March Q1 Avg. April May June Q2 Avg. July August Sept. Q3 Avg. Oct. Nov. Dec. Q4 Avg. Year Avg. Soybean Oil (crude/de-gummed) - Central Illinois / cwt $65.03 $63.31 $58.77 $62.18 $56.05 $52.48 $59.60 $55.98 $70.77 $70.04 $65.90 $69.07 $58.31 $55.42 $52.09 $55.33 $60.64 Soybean Oil (RBD) - Central Illinois / cwt $74.77 $71.93 $68.04 $71.40 $66.05 $63.02 $71.92 $66.96 $83.22 $79.82 $74.34 $79.26 $65.82 $63.27 $60.32 $63.18 $70.20 Distiller's Corn Oil - IL/WI cwt $66.39 $56.58 $51.50 $57.86 $53.34 $55.64 $58.75 $55.98 $67.14 $68.26 $66.44 $67.45 $58.68 $53.65 $48.63 $53.83 $58.78 2023 Cash Corn Pricing Competing Ingredient for Bakery Feeds and Fats January February March Q1 Avg. April May June Q2 Avg. July August Sept. Q3 Avg. Oct. Nov. Dec. Q4 Avg. Year Avg. Corn - Track Central IL #2 Yellow / bushel $6.61 $6.63 $6.35 $6.84 $6.36 $6.06 $6.11 $6.68 $5.44 $5.07 $4.53 $5.32 $4.59 $4.40 $4.43 $4.80 $5.91 2023 European Benchmark Pricing Palm Oi l - Competing ingredient for edible fats in Food Segment Soy meal - Competing ingredient for protein meals in Feed Segment January February March Q1 Avg. April May June Q2 Avg. July August Sept. Q3 Avg. Oct. Nov. Dec. Q4 Avg. Year Avg. Palm oil - CIF Rotterdam / metric ton $1,007 $974 $998 $993 $1,025 $947 $902 $958 $973 $949 $966 $963 $899 $939 $945 $928 $960.00 Soy meal - CIF Rotterdam / metric ton $603 $603 $579 $595 $544 $512 $493 $516 $515 $515 $509 $513 $508 $569 $547 $541 $541.00 QTR. over QTR. (Sequential) Year over Year (Q2) Comparison Q3-2023 Q4-2023 % Q4-2022 Q4-2023 % Average Jacobsen Prices (USD) Avg. Avg. Change Avg. Avg. Change Bleachable Fancy Tallow - Chicago Renderer / cwt $68.66 $54.54 -20.6% $72.34 $54.54 -24.6% Yellow Grease - Illinois / cwt $52.39 $40.69 -22.3% $62.01 $40.69 -34.4% Used Cooking Oil (UCO) - Illinois / cwt $54.72 $42.94 -21.5% $64.76 $42.94 -33.7% Meat and Bone Meal - Ruminant - Illinois / ton $455.04 $372.44 -18.2% $392.39 $372.44 -5.1% Poultry By-Product Meal - Feed Grade - Mid South / ton $488.13 $446.37 -8.6% $390.37 $446.37 14.3% Poultry By-Product Meal - Pet Food - Mid South / ton $796.10 $689.80 -13.4% $711.00 $689.80 -3.0% Soybean Oil (crude/de-gummed) - Central Illinois / cwt $69.07 $55.33 -19.9% $75.72 $55.33 -26.9% Soybean Oil (RBD) - Central Illinois / cwt $79.26 $63.18 -20.3% $84.82 $63.18 -25.5% Distiller's Corn Oil - IL/WI per cwt $67.45 $53.83 -20.2% $73.32 $53.83 -26.6% Average Wall Street Journal Prices (USD) Corn - Track Central IL #2 Yellow / bushel $5.32 $4.80 -9.8% $6.85 $4.80 -29.9% Average Thomson Reuters Prices (USD) Palm oil - CIF Rotterdam / metric ton $963 $928 -3.6% $1,043 $928 -11.0% Soy meal - CIF Rotterdam / metric ton $513 $541 5.5% $547 $541 -1.1% 2023 Average Jacobsen Prices (USD) 2023 Average Jacobsen Prices (USD) 2023 Average Wall Street Journal Prices (USD) 2023 Average Thomson Reuters Prices (USD)
Adjusted EBITDA December 30, December 31, December 30, December 31, (U.S. dollars in thousands) 2023 (unaudited) 2022 2023 (unaudited) 2022 Net income attributable to Darling 84,516$ 156,560$ 647,726$ 737,690$ Depreciation and amortization 137,929 117,384 502,015 394,721 Interest expense 68,453 46,139 259,223 125,566 Income tax expense 7,246 37,995 59,568 146,626 Restructuring and asset impairment charges 13,133 21,109 18,553 29,666 Acquisition and integration costs 1,726 2,738 13,884 16,372 Change in fair value of contingent consideration 5,167 - (7,891) - Foreign currency (gain) loss 206 5,272 (8,133) 11,277 Other (income) expense, net (2,825) (242) (16,310) 3,609 Equity in net income of Diamond Green Diesel (4,690) (123,448) (366,380) (372,346) Equity in net (income) loss of other unconsolidated subsidiaries (1,508) 831 (5,011) (5,102) Net income attributable to noncontrolling interests 2,740 2,671 12,663 9,402 Adjusted EBITDA (Non-GAAP) 312,093$ 267,009$ 1,109,907$ 1,097,481$ Foreign currency exchange impact (7,932) (1) - (10,830) (2) - Pro forma Adjusted EBITDA to Foreign Currency (Non-GAAP) 304,161$ 267,009$ 1,099,077$ 1,097,481$ DGD Joint Venture Adjusted EBITDA (Darling's Share) 38,816$ 145,984$ 501,987$ 443,487$ Darling plus Darling's share of DGD Joint Venture Adjusted EBITDA 350,909$ 412,993$ 1,611,894$ 1,540,968$ (1) The average rate assumption used in this calculation were the actual average rate for the three months ended December 30, 2023 of €1.00:USD$1.07, R$1.00:USD$0.20 and CAD$1.00:USD$0.73, as compared to the average rate for the three months ended December 31, 2022 of €1.00:USD$1.02, R$1.00:USD$0.19 and CAD$1.00:USD$0.74, respectively. (2) The average rate assumption used in this calculation were the actual average rate for the twelve months ended December 30, 2023 of €1.00:USD$1.08, R$1.00:USD$0.20 and CAD$1.00:USD$0.74, as compared to the average rate for the twelve months ended December 31, 2022 of €1.00:USD$1.05, R$1.00:USD$0.19 and CAD$1.00:USD$0.77, respectively. Three Months Ended Twelve Months Ended Reconciliation of Net Income to (Non-GAAP) Adjusted EBITDA and (Non-GAAP) Pro-Forma Adjusted EBITDA to Foreign Currency For the Three and Twelve Months Ended December 30, 2023 and December 31, 2022 (in thousands)
Event Calendar 20 Scotia Bank Howard Weil Energy Conference •Miami • Feb. 29 Raymond James •Orlando •March 5 Piper Sandler Energy Conference • Las Vegas •March 19
