Darling Ingredients Inc 10-Q for FY2020 Q1

Darling Ingredients Inc. (DAR)

10-Q 2020-05-06 For: 2020-03-28

Added on April 04, 2026

About this 10-Q

Darling Ingredients Inc filed this 10-Q on May 6, 2020, covering the quarter ended March 28, 2020 (FY2020 Q1).

Headline figures

Quarter ended March 28, 2020, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $852.84M; up 2.1% from $835.1M a year earlier
Net income: $85.51M; up 374.7% from net income of $18.01M a year earlier
Diluted EPS: $0.51; up 363.6% from $0.11 a year earlier

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	(Mark One)
☒	QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
	SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended	March 28, 2020
	OR

☐	TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
	SECURITIES EXCHANGE ACT OF 1934
	For the transition period from _______ to _______



Delaware			36-2495346
(State or other jurisdiction			(I.R.S. Employer
of incorporation or organization)			Identification Number)



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”)



Large accelerated filer	☒	Accelerated filer	☐

Non-accelerated filer	☐	Smaller reporting company	☐

		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 Exchange Act.			☐



		Page No.
	PART I: FINANCIAL INFORMATION

Item 1.	FINANCIAL STATEMENTS
	Consolidated Balance Sheets	3
	March 28, 2020 (unaudited) and December 28, 2019

	Consolidated Statements of Operations (unaudited)	4
	Three Months Ended March 28, 2020 and March 30, 2019

	Consolidated Statements of Comprehensive Income/(Loss) (unaudited)	5
	Three Months Ended March 28, 2020 and March 30, 2019

	Consolidated Statement of Stockholders' Equity (unaudited)	6
	Three Months Ended March 28, 2020 and March 30, 2019

	Consolidated Statements of Cash Flows (unaudited)	7
	Three Months Ended March 28, 2020 and March 30, 2019

	Notes to Consolidated Financial Statements (unaudited)	8

Item 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	35


Item 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	51


Item 4.	CONTROLS AND PROCEDURES	52


	PART II: OTHER INFORMATION

Item 1.	LEGAL PROCEEDINGS	54

Item 1A.	RISK FACTORS	54

Item 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	54

Item 6.	EXHIBITS	55

	Signatures	56



	March 28, 2020			December 28, 2019
ASSETS	(unaudited)
Current assets:
Cash and cash equivalents	$	76,339		$	72,935
Restricted cash	106			110
Accounts receivable, less allowance for bad debts of $9,606 at March 28, 2020 and $8,802 at December 28, 2019	397,700			406,338
Inventories	381,432			362,957
Prepaid expenses	45,107			46,599
Income taxes refundable	3,106			3,317
Other current assets	26,270			25,032
Total current assets	930,060			917,288
Property, plant and equipment, less accumulated depreciation of $1,480,244 at March 28, 2020 and $1,438,388 at December 28, 2019	1,764,120			1,802,411
Intangible assets, less accumulated amortization of $485,655 at March 28, 2020 and $482,442 at December 28, 2019	497,779			526,394
Goodwill	1,202,592			1,223,291
Investment in unconsolidated subsidiaries	802,184			689,354
Operating lease right-of-use assets	123,859			124,726
Other assets	42,653			47,400
Deferred income taxes	14,532			14,394
	$	5,377,779		$	5,345,258
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt	$	86,397		$	90,996
Accounts payable, principally trade	211,596			239,252
Income taxes payable	8,593			8,895
Current operating lease liabilities	37,472			37,805
Accrued expenses	307,688			311,391
Total current liabilities	651,746			688,339
Long-term debt, net of current portion	1,664,858			1,558,429
Long-term operating lease liabilities	91,250			91,424
Other non-current liabilities	111,145			115,785
Deferred income taxes	250,338			247,931
Total liabilities	2,769,337			2,701,908
Commitments and contingencies
Stockholders’ equity:
Common stock, $0.01 par value; 250,000,000 shares authorized; 169,076,043 and 168,620,314 shares issued at March 28, 2020 and at December 28, 2019, respectively	1,691			1,686
Additional paid-in capital	1,575,854			1,560,897
Treasury stock, at cost; 7,218,079 and 4,845,203 shares at March 28, 2020 and at December 28, 2019, respectively	(135,104		)	(75,022		)
Accumulated other comprehensive loss	(384,491		)	(321,847		)
Retained earnings	1,485,615			1,400,105
Total Darling's stockholders’ equity	2,543,565			2,565,819
Noncontrolling interests	64,877			77,531
Total stockholders' equity	$	2,608,442		$	2,643,350
	$	5,377,779		$	5,345,258



	Three Months Ended
	March 28, 2020			March 30, 2019
Net sales	$	852,842		$	835,104
Costs and expenses:
Cost of sales and operating expenses	646,908			650,913
Loss/(gain) on sale of assets	61			(4,250		)
Selling, general and administrative expenses	96,193			85,003
Depreciation and amortization	84,671			79,164
Total costs and expenses	827,833			810,830
Equity in net income of Diamond Green Diesel	97,820			24,277
Operating income	122,829			48,551

Other expense:
Interest expense	(19,090		)	(19,876		)
Foreign currency gain/(loss)	1,664			(732		)
Other expense, net	(1,881		)	(2,525		)
Total other expense	(19,307		)	(23,133		)

Equity in net income/(loss) of other unconsolidated subsidiaries	869			(504		)
Income before income taxes	104,391			24,914

Income tax expense	18,300			5,274

Net income	86,091			19,640

Net income attributable to noncontrolling interests	(581		)	(1,628		)

Net income attributable to Darling	$	85,510		$	18,012

Basic income per share	$	0.52		$	0.11
Diluted income per share	$	0.51		$	0.11



	Three Months Ended
	March 28, 2020			March 30, 2019
Net income	$	86,091		$	19,640
Other comprehensive income/(loss), net of tax:
Foreign currency translation	(65,236		)	(4,886		)
Pension adjustments	648			858
Corn option derivative adjustments	136			—
Heating oil derivative adjustments	10,870			—
Foreign exchange derivative adjustments	(9,151		)	(1,937		)
Total other comprehensive loss, net of tax	(62,733		)	(5,965		)
Total comprehensive income	$	23,358		$	13,675
Comprehensive income attributable to noncontrolling interests	492			3,387
Comprehensive income attributable to Darling	$	22,866		$	10,288



	Common Stock
	Number of Outstanding Shares		$.01 par Value		Additional Paid-In Capital		Treasury Stock			Accumulated Other Comprehensive Loss			Retained Earnings		Stockholders' equity attributable to Darling			Non-controlling Interest			Total Stockholders' Equity
Balances at December 28, 2019	163,775,111		$	1,686	$	1,560,897	$	(75,022	)	$	(321,847	)	$	1,400,105	$	2,565,819		$	77,531		$	2,643,350
Net income	—		—		—		—			—			85,510		85,510			581			86,091
Deductions to noncontrolling interests	—		—		3,271		—			—			—		3,271			(13,146		)	(9,875		)
Pension liability adjustments, net of tax	—		—		—		—			648			—		648			—			648
Heating oil derivative adjustment, net of tax	—		—		—		—			10,870			—		10,870			—			10,870
Corn option derivative adjustment, net of tax	—		—		—		—			136			—		136			—			136
Foreign exchange derivative adjustment, net of tax	—		—		—		—			(9,151		)	—		(9,151		)	—			(9,151		)
Foreign currency translation adjustments	—		—		—		—			(65,147		)	—		(65,147		)	(89		)	(65,236		)
Issuance of non-vested stock	8,000		—		40		—			—			—		40			—			40
Stock-based compensation	—		—		10,778		—			—			—		10,778			—			10,778
Treasury stock	(2,372,876	)	—		—		(60,082		)	—			—		(60,082		)	—			(60,082		)
Issuance of common stock	447,729		5		868		—			—			—		873			—			873
Balances at March 28, 2020	161,857,964		$	1,691	$	1,575,854	$	(135,104	)	$	(384,491	)	$	1,485,615	$	2,543,565		$	64,877		$	2,608,442



	March 28, 2020			March 30, 2019
Cash flows from operating activities:
Net Income	$	86,091		$	19,640
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	84,671			79,164
Loss (gain) on disposal of property, plant, equipment and other assets	61			(4,250		)
Gain on insurance proceeds from insurance settlements	—			(845		)
Deferred taxes	6,377			(2,901		)
Increase (decrease) in long-term pension liability	(264		)	646
Stock-based compensation expense	10,818			10,327
Write-off deferred loan costs	—			27
Deferred loan cost amortization	1,416			1,574
Equity in net income of Diamond Green Diesel and other unconsolidated subsidiaries	(98,689		)	(23,773		)
Changes in operating assets and liabilities, net of effects from acquisitions:
Accounts receivable	487			11,692
Income taxes refundable/payable	348			7,270
Inventories and prepaid expenses	(24,999		)	(5,063		)
Accounts payable and accrued expenses	(16,790		)	(43,016		)
Other	(14,981		)	(1,891		)
Net cash provided by operating activities	34,546			48,601
Cash flows from investing activities:
Capital expenditures	(61,599		)	(84,269		)
Acquisitions, net of cash acquired	—			(1,431		)
Gross proceeds from disposal of property, plant and equipment and other assets	379			7,868
Proceeds from insurance settlement	—			845
Payments related to routes and other intangibles	(3,416		)	(2,778		)
Net cash used by investing activities	(64,636		)	(79,765		)
Cash flows from financing activities:
Proceeds from long-term debt	8,264			2,138
Payments on long-term debt	(8,638		)	(10,974		)
Borrowings from revolving credit facility	219,933			156,829
Payments on revolving credit facility	(100,782		)	(138,147		)
Net cash overdraft financing	(9,594		)	14,525
Issuance of common stock	67			12
Repurchase of common stock	(55,044		)	—
Minimum withholding taxes paid on stock awards	(4,328		)	(3,190		)
Acquisition of noncontrolling interest	(8,784		)	—
Distributions to noncontrolling interests	(688		)	—
Net cash provided by financing activities	40,406			21,193
Effect of exchange rate changes on cash	(6,916		)	(1,575		)
Net increase (decrease) in cash, cash equivalents and restricted cash	3,400			(11,546		)
Cash, cash equivalents and restricted cash at beginning of period	73,045			107,369
Cash, cash equivalents and restricted cash at end of period	$	76,445		$	95,823
Supplemental disclosure of cash flow information:
Accrued capital expenditures	$	(1,630	)	$	(8,623	)
Cash paid during the period for:
Interest, net of capitalized interest	$	5,863		$	21,602
Income taxes, net of refunds	$	11,453		$	2,894
Non-cash operating activities
Operating lease right of use asset obtained in exchange for new lease liabilities	$	9,121		$	4,794
Non-cash financing activities
Debt issued for assets	$	21		$	—



	March 28, 2020		December 29, 2018
Cash and cash equivalents	$	76,339	$	72,935
Restricted cash	106		110
Total cash, cash equivalents and restricted cash shown in the consolidated statements of cash flow	$	76,445	$	73,045



	Net Income per Common Share (in thousands, except per share data)
	Three Months Ended
			March 28, 2020						March 30, 2019
	Income		Shares		Per Share		Income		Shares		Per Share
Basic:
Net Income attributable to Darling	$	85,510	163,474		$	0.52	$	18,012	164,855		$	0.11
Diluted:
Effect of dilutive securities:
Add: Option shares in the money and dilutive effect of non-vested stock awards			6,749						6,127
Less: Pro forma treasury shares			(2,296	)					(2,322	)
Diluted:
Net income attributable to Darling	$	85,510	167,927		$	0.51	$	18,012	168,660		$	0.11



(in thousands)	March 31, 2020		December 31, 2019
Assets:
Total current assets	$	821,602	$	668,026
Property, plant and equipment, net	779,961		713,489
Other assets	30,446		30,710
Total assets	$	1,632,009	$	1,412,225
Liabilities and members' equity:
Total current portion of long term debt	$	496	$	341
Total other current liabilities	70,758		75,802
Total long term debt	8,936		8,742
Total other long term liabilities	4,273		4,422
Total members' equity	1,547,546		1,322,918
Total liabilities and members' equity	$	1,632,009	$	1,412,225



	March 28, 2020		December 28, 2019
Finished product	$	215,422	$	199,799
Work in process	87,291		81,841
Raw material	38,416		41,964
Supplies and other	40,303		39,353
	$	381,432	$	362,957



	March 28, 2020			December 28, 2019
Indefinite Lived Intangible Assets
Trade names	$	52,407		$	52,733
	52,407			52,733
Finite Lived Intangible Assets:
Routes	363,150			382,263
Permits	475,266			483,593
Non-compete agreements	3,036			3,840
Trade names	65,670			65,670
Royalty, consulting, land use rights and leasehold	23,905			20,737
	931,027			956,103
Accumulated Amortization:
Routes	(166,126		)	(169,050		)
Permits	(277,136		)	(272,213		)
Non-compete agreements	(2,441		)	(3,111		)
Trade names	(34,528		)	(32,890		)
Royalty, consulting, land use rights and leasehold	(5,424		)	(5,178		)
	(485,655		)	(482,442		)
Total Intangible assets, less accumulated amortization	$	497,779		$	526,394


(1)	General


(2)	Summary of Significant Accounting Policies


(a)	Basis of Presentation


(b)	Fiscal Periods



	Feed Ingredients			Food Ingredients			Fuel Ingredients			Total
Balance at December 28, 2019
Goodwill	$	793,457		$	329,654		$	116,555		$	1,239,666
Accumulated impairment losses	(15,914		)	(461		)	—			(16,375		)
	777,543			329,193			116,555			1,223,291
Foreign currency translation	(14,675		)	(2,811		)	(3,213		)	(20,699		)
Balance at March 28, 2020
Goodwill	778,782			326,843			113,342			1,218,967
Accumulated impairment losses	(15,914		)	(461		)	—			(16,375		)
	$	762,868		$	326,382		$	113,342		$	1,202,592



	March 28, 2020		December 28, 2019
Compensation and benefits	$	84,112	$	107,324
Accrued ad valorem, and franchise taxes	25,614		30,231
Accrued operating expenses	62,678		67,194
Other accrued expense	135,284		106,642
	$	307,688	$	311,391



Period Ending Fiscal	Operating Leases			Capital Leases
2020 (excluding the three months ended March 28, 2020)	$	37,556		$	86
2021	34,526			16
2022	24,218			16
2023	19,628			10
2024	13,552			8
Thereafter	26,298			1
	$	155,778		$	137
Less amounts representing interest	$	(27,056	)	(7		)
Lease obligations included in current and long-term liabilities	$	128,722		$	130



	March 28, 2020			December 28, 2019
Amended Credit Agreement:
Revolving Credit Facility ($2.8 million denominated in CAD at March 28, 2020 and $11.0 million denominated in euro at March 28, 2020)	$	157,848		$	39,000
Term Loan B	495,000			495,000
Less unamortized deferred loan costs	(7,341		)	(7,696		)
Carrying value Term Loan B	487,659			487,304

5.25% Senior Notes due 2027 with effective interest of 5.47%	500,000			500,000
Less unamortized deferred loan costs	(6,310		)	(6,494		)
Carrying value 5.25% Senior Notes due 2027	493,690			493,506

3.625% Senior Notes due 2026 - Denominated in euro with effective interest of 3.83%	566,861			574,096
Less unamortized deferred loan costs - Denominated in euro	(6,653		)	(6,982		)
Carrying value 3.625% Senior Notes due 2026	560,208			567,114

Other Notes and Obligations	51,850			62,501
	1,751,255			1,649,425
Less Current Maturities	86,397			90,996
	$	1,664,858		$	1,558,429



	Three Months Ended
	Before-Tax						Tax (Expense)						Net-of-Tax
	Amount						or Benefit						Amount
	March 28, 2020			March 30, 2019			March 28, 2020			March 30, 2019			March 28, 2020			March 30, 2019
Defined benefit pension plans
Amortization of prior service cost/(benefit)	$	8		$	9		$	(2	)	$	(3	)	$	6		$	6
Amortization of actuarial loss	854			1,146			(212		)	(294		)	642			852
Total defined benefit pension plans	862			1,155			(214		)	(297		)	648			858
Corn option derivatives
Loss/(gain) reclassified to net income	300			—			(75		)	—			225			—
Gain/(loss) activity recognized in other comprehensive income/(loss)	(119		)	—			30			—			(89		)	—
Total corn option derivatives	181			—			(45		)	—			136			—
Heating oil derivatives
Gain/(loss) activity recognized in other comprehensive income/(loss)	14,494			—			(3,624		)	—			10,870			—
Total heating oil derivatives	14,494			—			(3,624		)	—			10,870			—
Foreign exchange derivatives
Loss/(gain) reclassified to net income	(412		)	—			129			—			(283		)	—
Gain/(loss) activity recognized in other comprehensive income/(loss)	(12,920		)	(2,934		)	4,052			997			(8,868		)	(1,937		)
Total foreign exchange derivatives	(13,332		)	(2,934		)	4,181			997			(9,151		)	(1,937		)

Foreign currency translation	(65,887		)	(5,393		)	651			507			(65,236		)	(4,886		)

Other comprehensive income/(loss)	$	(63,682	)	$	(7,172	)	$	949		$	1,207		$	(62,733	)	$	(5,965	)


(a)	These items are included in the computation of net periodic pension cost. See Note 14 Employee Benefit Plans for additional information.



	Three Months Ended March 28, 2020
	Foreign Currency			Derivative			Defined Benefit
	Translation			Instruments			Pension Plans			Total
Accumulated Other Comprehensive Income/(loss) December 28, 2019, attributable to Darling, net of tax	$	(282,338	)	$	(5,505	)	$	(34,004	)	$	(321,847	)
Other comprehensive loss before reclassifications	(65,236		)	1,913			—			(63,323		)
Amounts reclassified from accumulated other comprehensive loss	—			(58		)	648			590
Net current-period other comprehensive income/(loss)	(65,236		)	1,855			648			(62,733		)
Noncontrolling interest	(89		)	—			—			(89		)
Accumulated Other Comprehensive loss March 28, 2020, attributable to Darling, net of tax	(347,485		)	$	(3,650	)	$	(33,356	)	$	(384,491	)



	Pension Benefits
	Three Months Ended
	March 28, 2020			March 30, 2019
Service cost	$	755		$	678
Interest cost	1,428			1,710
Expected return on plan assets	(2,039		)	(1,819		)
Amortization of prior service cost	8			9
Amortization of net loss	854			1,146
Net pension cost	$	1,006		$	1,724



Functional Currency		Contract Currency
Type	Amount	Type	Amount
Brazilian real	38,179	Euro	8,100
Brazilian real	1,055,921	U.S. dollar	292,149
Euro	59,386	U.S. dollar	65,693
Euro	18,314	Polish zloty	80,500
Euro	8,992	Japanese yen	1,076,265
Euro	10,967	Chinese renminbi	84,048
Euro	16,514	Australian dollar	27,850
Euro	5,977	British pound	5,248
Polish zloty	24,133	Euro	5,264
British pound	37	Euro	40
British pound	108	U.S. dollar	126
Japanese yen	137,644	U.S. dollar	1,271
U.S. dollar	932	Japanese yen	103,000
U.S. dollar	49,766	Euro	45,000



		Loss or (Gain) Recognized in Income on Derivatives Not Designated as Hedges
		Three Months Ended
Derivatives not designated as hedging instruments	Location	March 28, 2020			March 30, 2019

Foreign exchange	Foreign currency loss	$	(1,295	)	$	1,871
Foreign exchange	Net sales	730			296
Foreign exchange	Cost of sales and operating expenses	(887		)	(245		)
Foreign exchange	Selling, general and administrative expense	5,724			873
Corn options and futures	Net sales	855			350
Corn options and futures	Cost of sales and operating expenses	(1,841		)	(873		)
Heating Oil swaps and options	Cost of sales and operating expenses	—			(506		)
Total		$	3,286		$	1,766



			Fair Value Measurements at March 28, 2020 Using
			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
(In thousands of dollars)	Total		(Level 1)		(Level 2)		(Level 3)
Assets:
Derivative instruments	$	5,712	$	—	$	5,712	$	—
Total Assets	$	5,712	$	—	$	5,712	$	—

Liabilities:
Derivative instruments	$	14,612	$	—	$	14,612	$	—
5.25% Senior notes	470,000		—		470,000		—
3.625% Senior notes	513,122		—		513,122		—
Term loan B	482,625		—		482,625		—
Revolver debt	146,799		—		146,799		—
Total Liabilities	$	1,627,158	$	—	$	1,627,158	$	—



			Fair Value Measurements at December 28, 2019 Using
			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
(In thousands of dollars)	Total		(Level 1)		(Level 2)		(Level 3)
Assets:
Derivative instruments	$	4,140	$	—	$	4,140	$	—
Total Assets	$	4,140	$	—	$	4,140	$	—

Liabilities:
Derivative instruments	$	1,593	$	—	$	1,593	$	—
5.25% Senior notes	531,850		—		531,850		—
3.625% Senior notes	605,327		—		605,327		—
Term loan B	497,475		—		497,475		—
Revolver debt	38,805		—		38,805		—
Total Liabilities	$	1,675,050	$	—	$	1,675,050	$	—



	Three Months Ended March 30, 2019
	Feed Ingredients		Food Ingredients		Fuel Ingredients		Total
Geographic Area Revenues
North America	$	410,237	$	48,813	$	5,710	$	464,760
Europe	79,998		151,652		54,411		286,061
China	2,952		46,937		—		49,889
South America	—		12,669		—		12,669
Other	2,632		19,093		—		21,725
Net sales	$	495,819	$	279,164	$	60,121	$	835,104

Major product types
Fats	$	144,876	$	35,138	$	—	$	180,014
Used cooking oil	45,406		—		—		45,406
Proteins	205,813		—		—		205,813
Bakery	45,656		—		—		45,656
Other rendering	41,254		—		—		41,254
Food ingredients	—		221,908		—		221,908
Bioenergy	—		—		54,411		54,411
Biofuels	—		—		5,710		5,710
Other	12,814		22,118		—		34,932
Net sales	$	495,819	$	279,164	$	60,121	$	835,104



	Parent		Guarantors			Non-guarantors		Eliminations			Consolidated
ASSETS
Cash and cash equivalents	$	903	$	25		$	75,411	$	—		$	76,339
Restricted cash	103		—			3		—			106
Accounts receivable	47,852		663,967			545,669		(859,788		)	397,700
Inventories	24,028		97,781			259,623		—			381,432
Income taxes refundable	1,378		—			1,728		—			3,106
Prepaid expenses	17,927		2,281			24,899		—			45,107
Other current assets	4,950		(3,346		)	44,906		(20,240		)	26,270
Total current assets	97,141		760,708			952,239		(880,028		)	930,060
Investment in subsidiaries	5,509,606		1,283,699			844,042		(7,637,347		)	—
Property, plant and equipment, net	432,561		521,784			809,775		—			1,764,120
Intangible assets, net	42,993		163,064			291,722		—			497,779
Goodwill	49,902		490,748			661,942		—			1,202,592
Investment in unconsolidated subsidiaries	—		—			802,184		—			802,184
Operating lease right-of-use asset	72,161		30,475			21,223		—			123,859
Other assets	34,715		134			57,336		(49,532		)	42,653
Deferred taxes	—		—			14,532		—			14,532
	$	6,239,079	$	3,250,612		$	4,454,995	$	(8,566,907	)	$	5,377,779
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current portion of long-term debt	$	50,004	$	11		$	56,622	$	(20,240	)	$	86,397
Accounts payable	887,354		23,026			160,990		(859,774		)	211,596
Income taxes payable	919		—			7,674		—			8,593
Current operating lease liability	19,774		10,592			7,106		—			37,472
Accrued expenses	97,602		26,190			183,910		(14		)	307,688
Total current liabilities	1,055,653		59,819			416,302		(880,028		)	651,746
Long-term debt, net of current portion	1,139,898		27			574,465		(49,532		)	1,664,858
Long-term operating lease liability	57,796		19,462			13,992		—			91,250
Other noncurrent liabilities	76,714		—			34,431		—			111,145
Deferred income taxes	131,000		—			119,338		—			250,338
Total liabilities	2,461,061		79,308			1,158,528		(929,560		)	2,769,337
Total stockholders’ equity	3,778,018		3,171,304			3,296,467		(7,637,347		)	2,608,442
	$	6,239,079	$	3,250,612		$	4,454,995	$	(8,566,907	)	$	5,377,779



	Avg. Price 1st Quarter 2020	Avg. Price 1st Quarter 2019	Increase/(Decrease)	% Increase/(Decrease)
Jacobsen:
MBM (Illinois)	$ 237.10/ton	$ 250.00/ton	$ (12.90)/ton	(5.2	)%
Feed Grade PM (Mid-South)	$ 225.73/ton	$ 269.26/ton	$ (43.53)/ton	(16.2	)%
Pet Food PM (Mid-South)	$ 540.44/ton	$ 684.51/ton	$ (144.07)/ton	(21.0	)%
Feather meal (Mid-South)	$ 282.50/ton	$ 447.83/ton	$ (165.33)/ton	(36.9	)%
BFT (Chicago)	$ 32.69/cwt	$ 27.00/cwt	$ 5.69/cwt	21.1	%
YG (Illinois)	$ 22.92/cwt	$ 20.72/cwt	$ 2.20/cwt	10.6	%
Corn (Illinois)	$ 3.90/bushel	$ 3.69/bushel	$ 0.21/bushel	5.7	%
Reuters:
Palm Oil (CIF Rotterdam)	$ 724.00/MT	$ 550.00/MT	$ 174.00/MT	31.6	%
Soy meal (CIF Rotterdam)	$ 360.00/MT	$ 353.00/MT	$ 7.00/MT	2.0	%



	Avg. Price 1st Quarter 2020	Avg. Price 4th Quarter 2019	Increase/(Decrease)	% Increase/(Decrease)
Jacobsen:
MBM (Illinois)	$ 237.10/ton	$ 230.01/ton	$ 7.09/ton	3.1	%
Feed Grade PM (Mid-South)	$ 225.73/ton	$ 223.46/ton	$ 2.27/ton	1.0	%
Pet Food PM (Mid-South)	$ 540.44/ton	$ 408.75/ton	$ 131.69/ton	32.2	%
Feather meal (Mid-South)	$ 282.50/ton	$ 283.81/ton	$ (1.31)/ton	(0.5	)%
BFT (Chicago)	$ 32.69/cwt	$ 25.62/cwt	$ 7.07/cwt	27.6	%
YG (Illinois)	$ 22.92/cwt	$ 20.39/cwt	$ 2.53/cwt	12.4	%
Corn (Illinois)	$ 3.90/bushel	$ 3.98/bushel	$ (0.08)/bushel	(2.0	)%
Reuters:
Palm Oil (CIF Rotterdam)	$ 724.00/MT	$ 675.00/MT	$ 49.00/MT	7.3	%
Soy meal (CIF Rotterdam)	$ 360.00/MT	$ 347.00/MT	$ 13.00/MT	3.7	%



(in thousands, except percentages)	Feed Ingredients			Food Ingredients			Fuel Ingredients			Corporate			Total
Three Months Ended March 28, 2020
Net Sales	$	512,625		$	270,294		$	69,923		$	—		$	852,842
Cost of sales and operating expenses	388,453			205,430			53,025			—			646,908
Gross Margin	124,172			64,864			16,898			—			205,934

Gross Margin %	24.2		%	24.0		%	24.2		%	—		%	24.1		%

Loss on sale of assets	50			2			9			—			61
Selling, general and administrative expenses	53,947			25,476			1,654			15,116			96,193
Depreciation and amortization	53,521			20,305			8,092			2,753			84,671
Equity in net income of Diamond Green Diesel	—			—			97,820			—			97,820
Segment operating income/(loss)	16,654			19,081			104,963			(17,869		)	122,829

Equity in net income of other unconsolidated subsidiaries	869			—			—			—			869
Segment income/(loss)	17,523			19,081			104,963			(17,869		)	123,698



	Three Months Ended
(dollars in thousands)	March 28, 2020			March 30, 2019
Net income attributable to Darling	$	85,510		$	18,012
Depreciation and amortization	84,671			79,164
Interest expense	19,090			19,876
Income tax expense	18,300			5,274
Foreign currency loss/(gain)	(1,664		)	732
Other expense, net	1,881			2,525
Equity in net income of Diamond Green Diesel	(97,820		)	(24,277		)
Equity in net (income)/loss of unconsolidated subsidiaries	(869		)	504
Net income attributable to non-controlling interests	581			1,628
Darling's Adjusted EBITDA	$	109,680		$	103,438

Foreign currency exchange impact (1)	2,158			—
Pro forma Adjusted EBITDA to Foreign Currency (Non-GAAP)	$	111,838		$	103,438

DGD Joint Venture Adjusted EBITDA (Darling's Share)	$	103,634		$	29,828

Darling plus Darling's share of DGD Joint Venture Adjusted EBITDA	$	213,314		$	133,266



Senior Notes:
5.25 % Notes due 2027	$	500,000
Less unamortized deferred loan costs	(6,310		)
Carrying value of 5.25% Notes due 2027	$	493,690

3.625 % Notes due 2026 - Denominated in euros	$	566,861
Less unamortized deferred loan costs	(6,653		)
Carrying value of 3.625% Notes due 2026	$	560,208

Amended Credit Agreement:
Term Loan B	$	495,000
Less unamortized deferred loan costs	(7,341		)
Carrying value of Term Loan B	$	487,659

Revolving Credit Facility:
Maximum availability	$	1,000,000
Ancillary Facilities	42,593
Borrowings outstanding	157,848
Letters of credit issued	3,636
Availability	$	795,923

Other Debt	$	51,850


•	As of March 28, 2020, the Company had availability of $795.9 million under the revolving loan facility, taking into account that the Company had $157.8 million in outstanding borrowings, $45.5 million in ancillary facilities and letters of credit issued of $3.6 million.