Document
false0000916540 0000916540 2020-02-25 2020-02-25


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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 25, 2020

DARLING INGREDIENTS INC.
(Exact Name of Registrant as Specified in Charter)
 
Delaware
001-13323
36-2495346
(State or Other Jurisdiction
of Incorporation)
(Commission
File Number)
(IRS Employer
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. ☐


1


Item 2.02.
Results of Operations and Financial Condition.

On February 25, 2020, Darling Ingredients Inc. (the “Company”) issued a press release announcing financial results for the fourth quarter and fiscal year ended December 28, 2019. 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 26, 2020 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

 
99.2

 
104

 
Cover Page Interactive Data File (embedded within Inline XBRL document)


2


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 25, 2020
By:
/s/ John F. Sterling
 
 
 
John F. Sterling
 
 
 
Executive Vice President,
General Counsel
 



3


EXHIBIT 99.1

News Release
darlingingredientsinclogoa27.jpg
                                                                                                                                                 

DARLING INGREDIENTS INC. REPORTS FOURTH QUARTER FISCAL 2019 FINANCIAL RESULTS

IRVING, TEXAS, February 25, 2020/PRNewswire/ Darling Ingredients Inc. (NYSE: DAR, "Darling") --

Fourth Quarter 2019
•
Net income of $242.6 million, or $1.44 per GAAP diluted share
•
Net Sales of $859.4 million
•
Adjusted EBITDA of $385.8 million
•
Adjusted EBITDA (excluding 2018 BTC) of $299.2 million

Full Year 2019
•
Net income of $312.6 million, or $1.86 per GAAP diluted share
•
Net Sales of $3.4 billion
•
Adjusted EBITDA of $826.3 million
•
Adjusted EBITDA (excluding 2018 BTC) of $739.7 million


Darling reported net sales of $859.4 million for the fourth quarter of 2019, as compared with net sales of $853.1 million for the same period a year ago. Net income attributable to Darling for the three months ended December 28, 2019 was $242.6 million, or $1.44 per diluted share, compared to a net income of $40.6 million, or $0.24 per diluted share, for the fourth quarter of 2018. Adjusted net income attributable to Darling for the fourth quarter of 2019 was $156.0 million or $0.92 per diluted share. The adjustment for the fourth quarter is associated with the 2018 retroactive blender’s tax credit (‘BTC’).

“Our investment in Diamond Green Diesel continues to provide us with outstanding results and the growth of low carbon fuel standards around the world, puts Darling at the forefront of the green revolution,” said Randall C. Stuewe, Chairman and Chief Executive Officer of Darling Ingredients Inc. “Our global rendering operations continue to process higher volumes of raw materials, positioning us to be the preferred supplier of animal fats and oils for the biofuels industry.”

“Our food segment results showed solid growth in 2019 and we believe that the second half of 2020 will show additional strength as we complete the expansion of three additional Peptan facilities in the second and third quarters of this year,” added Stuewe. “Demand for collagen products continue to grow exponentially and our growth strategy of investing in additional production capacities enhances our sustainable portfolio of products and specialty ingredients.”

For the fiscal year ended 2019, Darling reported net sales of $3.4 billion, as compared with net sales of $3.4 billion for the fiscal year ended 2018. Net Income attributable to Darling for the fiscal year ended December 28, 2019 was $312.6 million, or $1.86 per diluted share, as compared to a net income of $101.5 million, or $0.60 per diluted share, for the fiscal year ended December 29, 2018. Adjusted net income attributable to Darling for the fiscal year of 2019 was $226.0 million or $1.34 per diluted share. The adjustment for the fiscal year is associated with the 2018 retroactive BTC.

Adjusted EBITDA, which is a Non-GAAP financial measure as outlined later in this release, was $385.8 million for the fourth quarter of 2019, which includes $276.2 million of Darling’s share of the DGD joint venture. Fourth quarter 2019 adjusted EBITDA excluding the 2018 BTC was $299.2 million. Adjusted EBITDA for the fiscal year of 2019 was $826.3 million, which included $389.4 million of Darling’s share of the DGD joint venture. Fiscal 2019 adjusted EBITDA excluding the 2018 BTC was $739.7 million.






darlingingredientsinclogoa27.jpg
News Release
February 25, 2020
Page 2
 
 
 
 
 

As of December 28, 2019, Darling had $73 million in cash and cash equivalents, and $911.9 million available under committed revolving credit agreements, some of which are subject to restrictions and other lending conditions. Total debt outstanding at the end of the fiscal year, was $1.6 billion.

Segment Financial Tables (in thousands)

 
Feed
Food
Fuel
 
 
Three Months Ended December 28, 2019
Ingredients
Ingredients
Ingredients
Corporate
Total
 
 
 
 
 
 
Net Sales
$
490,317

$
288,619

$
80,492

$
—

$
859,428

Cost of sales and operating expenses
375,990

221,527

43,016

—

640,533

Gross Margin
$
114,327

$
67,092

$
37,476

$
—

$
218,895

 
 
 
 
 
 
Selling, general and administrative expenses
$
57,872

$
29,234

$
2,179

$
19,669

$
108,954

Loss(Gain) on sale of assets
(377
)
343

297

—

263

Depreciation and amortization
55,185

20,556

7,891

2,821

86,453

Equity in net income of Diamond Green Diesel
—

—

270,062

—

270,062

Segment Operating Income
$
1,647

$
16,959

$
297,171

$
(22,490
)
$
293,287

Equity in Net Income of Unconsolidated Subsidiaries
$
1,515

$
—

$
—

$
—

$
1,515

Segment Income
$
3,162

$
16,959

$
297,171

$
(22,490
)
$
294,802

 
 
 
 
 
 
Segment EBITDA
$
56,832

$
37,515

$
35,000

$
(19,669
)
$
109,678

DGD Adjusted EBITDA (Darling's Share)
—

—

276,146

—

276,146

Adjusted EBITDA
$
56,832

$
37,515

$
311,146

$
(19,669
)
$
385,824


 
Feed
Food
Fuel
 
 
Three Months Ended December 29, 2018
Ingredients
Ingredients
Ingredients
Corporate
Total
 
 
 
 
 
 
Net Sales
$
485,190

$
291,669

$
76,271

$
—

$
853,130

Cost of sales and operating expenses
374,777

233,179

59,689

—

667,645

Gross Margin
$
110,413

$
58,490

$
16,582

$
—

$
185,485

 
 
 
 
 
 
Selling, general and administrative expenses
$
44,808

$
23,652

$
(714
)
$
8,611

$
76,357

Loss(Gain) on sale of assets
199

(38
)
76

—

237

Depreciation and amortization
53,359

20,263

8,603

3,052

85,277

Equity in net income of Diamond Green Diesel
—

—

50,124

—

50,124

Segment Operating Income
$
12,047

$
14,613

$
58,741

$
(11,663
)
$
73,738

Equity in Net Income of Unconsolidated Subsidiaries
$
(493
)
$
—

$
—

$
—

$
(493
)
Segment Income
$
11,554

$
14,613

$
58,741

$
(11,663
)
$
73,245

 
 
 
 
 
 
Segment EBITDA
$
65,406

$
34,876

$
17,220

$
(8,611
)
$
108,891

DGD Adjusted EBITDA (Darling's Share)
—

—

55,268

—

55,268

Adjusted EBITDA
$
65,406

$
34,876

$
72,488

$
(8,611
)
$
164,159





darlingingredientsinclogoa27.jpg
News Release
February 25, 2020
Page 3
 
 
 
 
 
Segment Financial Tables continued (in thousands)

 
Feed
Food
Fuel
 
 
Twelve Months Ended December 28, 2019
Ingredients
Ingredients
Ingredients
Corporate
Total
 
 
 
 
 
 
Net Sales
$
1,970,561

$
1,119,085

$
274,259

$
—

$
3,363,905

Cost of sales and operating expenses
1,519,596

864,618

204,871

—

2,589,085

Gross Margin
$
450,965

$
254,467

$
69,388

$
—

$
774,820

 
 
 
 
 
 
Selling, general and administrative expenses
$
200,487

$
97,363

$
2,762

$
57,911

$
358,523

Loss(Gain) on sale of assets
(7,720
)
(13,175
)
313

—

(20,582
)
Depreciation and amortization
203,456

79,671

31,946

10,437

325,510

Equity in net income of Diamond Green Diesel
—

—

364,452

—

364,452

Segment Operating Income
$
54,742

$
90,608

$
398,819

$
(68,348
)
$
475,821

Equity in Net Income of Unconsolidated Subsidiaries
$
428

$
—

$
—

$
—

$
428

Segment Income
$
55,170

$
90,608

$
398,819

$
(68,348
)
$
476,249

 
 
 
 
 
 
Segment EBITDA
$
258,198

$
170,279

$
66,313

$
(57,911
)
$
436,879

DGD Adjusted EBITDA (Darling's Share)
—

—

389,416

—

389,416

Adjusted EBITDA
$
258,198

$
170,279

$
455,729

$
(57,911
)
$
826,295


 
Feed
Food
Fuel
 
 
Twelve Months Ended December 29, 2018
Ingredients
Ingredients
Ingredients
Corporate
Total
 
 
 
 
 
 
Net Sales
$
1,952,555

$
1,139,126

$
296,045

$
—

$
3,387,726

Cost of sales and operating expenses
1,497,973

918,141

230,260

—

2,646,374

Gross Margin
$
454,582

$
220,985

$
65,785

$
—

$
741,352

 
 
 
 
 
 
Selling, general and administrative expenses
$
176,722

$
91,546

$
(4,770
)
$
45,766

$
309,264

Loss(Gain) on sale of assets
725

(282
)
266

—

709

Restructure Cost
—

14,965

—

—

14,965

Depreciation and amortization
194,292

80,988

34,981

10,931

321,192

Equity in net income of Diamond Green Diesel
—

—

159,779

—

159,779

Segment Operating Income
$
82,843

$
33,768

$
195,087

$
(56,697
)
$
255,001

Equity in Net Income of Unconsolidated Subsidiaries
$
(550
)
$
—

$
—

$
—

$
(550
)
Segment Income
$
82,293

$
33,768

$
195,087

$
(56,697
)
$
254,451

 
 
 
 
 
 
Segment EBITDA
$
277,135

$
129,721

$
70,289

$
(45,766
)
$
431,379

DGD Adjusted EBITDA (Darling's Share)
—

—

174,013

—

174,013

Adjusted EBITDA
$
277,135

$
129,721

$
244,302

$
(45,766
)
$
605,392








darlingingredientsinclogoa27.jpg
News Release
February 25, 2020
Page 4
 
 
 
 
 
Darling Ingredients Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
December 28, 2019 and December 29, 2018
(in thousands)
 
 
December 28,
 
December 29,
 
 
2019
 
2018
ASSETS
(unaudited)
 
 
Current assets:
 
 
 
 
Cash and cash equivalents
$
72,935

 
$
107,262

 
Restricted cash
110

 
107

 
Accounts receivable, less allowance for bad debts of
  $8,802 at December 28, 2019 and $7,830 at December 29, 2018
406,338

 
385,737

 
Inventories
362,957

 
341,028

 
Prepaid expenses
46,599

 
35,247

 
Income taxes refundable
3,317

 
6,462

 
Other current assets
25,032

 
22,099

 
Total current assets
917,288

 
897,942

 
 
 
 
Property, plant and equipment, net
1,802,411

 
1,687,858

Intangible assets, less accumulated amortization, net
526,394

 
595,862

Goodwill
1,223,291

 
1,229,159

Investment in unconsolidated subsidiaries
689,354

 
410,177

Operating lease right-of-use assets
124,726

 
—

Other assets
47,400

 
53,375

Deferred income taxes
14,394

 
14,981

 
 
$
5,345,258

 
$
4,889,354

 
 
 
 
 
LIABILITIES AND STOCKHOLDERS' EQUITY
 
 
 
Current liabilities:
 
 
 
 
Current portion of long-term debt
$
90,996

 
$
7,492

 
Accounts payable, principally trade
239,252

 
219,479

 
Income taxes payable
8,895

 
4,043

 
Current operating lease liabilities
37,805

 
—

 
Accrued expenses
311,391

 
309,484

 
Total current liabilities
688,339

 
540,498

Long-term debt, net of current portion
1,558,429

 
1,666,940

Long-term operating lease liabilities
91,424

 
—

Other non-current liabilities
115,785

 
115,032

Deferred income taxes
247,931

 
231,063

 
Total liabilities
2,701,908

 
2,553,533

 
 
 
 
 
Commitments and contingencies
 
 
 
Total Darling's stockholders' equity:
2,565,819

 
2,273,048

Noncontrolling interests
77,531

 
62,773

 
Total stockholders' equity
$
2,643,350

 
$
2,335,821

 
 
$
5,345,258

 
$
4,889,354







darlingingredientsinclogoa27.jpg
News Release
February 25, 2020
Page 5
 
 
 
 
 
Darling Ingredients Inc. and Subsidiaries
Consolidated Operating Results
For the Periods Ended December 28, 2019 and December 29, 2018
(in thousands, except per share data)

 
(Fourth Quarter Unaudited)
 
 
 
 
 
 
Three Months Ended
Fiscal Year Ended
 
 
 
 
 
$ Change
 
 
 
 
$ Change
 
December 28,
 
December 29,
 
Favorable
December 28,
 
December 29,
 
Favorable
 
2019
 
2018
 
(Unfavorable)
2019
 
2018
 
(Unfavorable)
Net sales
$
859,428

 
$
853,130

 
$
6,298

$
3,363,905

 
$
3,387,726

 
$
(23,821
)
Costs and expenses:
 
 
 
 
 
 
 
 
 
 
Cost of sales and operating expenses
640,533

 
667,645

 
27,112

2,589,085

 
2,646,374

 
57,289

Loss (gain) on sale of assets
263

 
237

 
(26
)
(20,582
)
 
709

 
21,291

Selling, general and administrative expenses
108,954

 
76,357

 
(32,597
)
358,523

 
309,264

 
(49,259
)
Restructuring and impairment charges
—

 
—

 
—

—

 
14,965

 
14,965

Depreciation and amortization
86,453

 
85,277

 
(1,176
)
325,510

 
321,192

 
(4,318
)
Total costs and expenses
836,203

 
829,516

 
(6,687
)
3,252,536

 
3,292,504

 
39,968

Equity in net income of Diamond Green Diesel
270,062

 
50,124

 
219,938

364,452

 
159,779

 
204,673

Operating income
293,287

 
73,738

 
219,549

475,821

 
255,001

 
220,820

Other expense:
 
 
 
 
 
 
 
 
 
 
Interest expense
(18,586
)
 
(20,209
)
 
1,623

(78,674
)
 
(86,429
)
 
7,755

Debt extinguishment costs
—

 
—

 
—

(12,126
)
 
(23,509
)
 
11,383

Foreign currency loss
(657
)
 
651

 
(1,308
)
(1,311
)
 
(6,431
)
 
5,120

Gain/(loss) on disposal of subsidiaries
2,967

 
(45
)
 
3,012

2,967

 
(12,545
)
 
15,512

Other income (expense), net
487

 
(3,459
)
 
3,946

(6,671
)
 
(7,562
)
 
891

Total other expense
(15,789
)
 
(23,062
)
 
7,273

(95,815
)
 
(136,476
)
 
40,661

Equity in net income/(loss) of unconsolidated subsidiaries
1,515

 
(493
)
 
2,008

428

 
(550
)
 
978

Income before income taxes
279,013

 
50,183

 
228,830

380,434

 
117,975

 
262,459

Income taxes expense
35,567

 
8,039

 
(27,528
)
59,467

 
12,031

 
(47,436
)
Net income
243,446

 
42,144

 
201,302

320,967

 
105,944

 
215,023

Net income attributable to noncontrolling interests
(837
)
 
(1,496
)
 
659

(8,367
)
 
(4,448
)
 
(3,919
)
Net income/(loss) attributable to Darling
$
242,609

 
$
40,648

 
$
201,961

$
312,600

 
$
101,496

 
$
211,104

Basic income/(loss) per share:
$
1.48

 
$
0.25

 
$
1.23

$
1.90

 
$
0.62

 
$
1.28

Diluted income/(loss) per share:
$
1.44

 
$
0.24

 
$
1.20

$
1.86

 
$
0.60

 
$
1.26

 
 
 
 
 
 
 
 
 
 
 
Number of diluted common shares:
168,152

 
168,379

 
 
168,378

 
167,910

 
 









darlingingredientsinclogoa27.jpg
News Release
February 25, 2020
Page 6
 
 
 
 
 
Darling Ingredients Inc. and Subsidiaries
Consolidated Statement of Cash Flows
Fiscal Years Ended December 28, 2019 and December 29, 2018
(in thousands)
 
Fiscal Year Ended
 
December 28,
 
December 29,
Cash flows from operating activities:
2019
 
2018
Net income
$
320,967

 
$
105,944

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Depreciation and amortization
325,510

 
321,192

Deferred income taxes
20,530

 
(16,974
)
Loss/(gain) on sale of assets
(20,582
)
 
709

Loss/(gain) on disposal of subsidiaries
(2,967
)
 
12,545

Asset impairment
—

 
2,907

Gain on insurance proceeds from insurance settlement
(6,600
)
 
(1,253
)
Increase in long-term pension liability
1,831

 
1,463

Stock-based compensation expense
21,007

 
18,779

Debt extinguishment costs
12,126

 
23,509

Write-off deferred loan costs
270

 
320

Deferred loan cost amortization
5,846

 
7,870

Equity in net income of unconsolidated subsidiaries
(364,880
)
 
(159,229
)
Distribution of earnings from unconsolidated subsidiaries
69,213

 
67,638

Changes in operating assets and liabilities, net of effects from acquisitions:
 
 
 
  Accounts receivable
(26,086
)
 
(6,347
)
  Income taxes refundable/payable
9,542

 
(9,809
)
  Inventories and prepaid expenses
(39,111
)
 
2,391

  Accounts payable and accrued expenses
32,436

 
14,534

  Other
3,569

 
12,426

Net cash provided by operating activities
362,621

 
398,615

Cash flows from investing activities:
 
 
 
Capital expenditures
(359,498
)
 
(321,896
)
Acquisition, net of cash acquired
(1,431
)
 
(107,727
)
Investment of unconsolidated subsidiary
(2,000
)
 
(12,250
)
Proceeds from sale of investment in subsidiaries
3,671

 
82,760

Gross proceeds from disposal of property, plant and equipment and other assets
18,235

 
19,328

Proceeds from insurance settlement
6,600

 
1,253

Payments related to routes and other intangibles
(3,651
)
 
(3,883
)
Net cash used by investing activities
(338,074
)
 
(342,415
)
Cash flows from financing activities:
 
 
 
Proceeds from long-term debt
517,606

 
624,620

Payments on long-term debt
(581,163
)
 
(686,628
)
Borrowings from revolving credit facility
469,227

 
543,898

Payments on revolving credit facility
(461,669
)
 
(510,974
)
Net cash overdraft financing
38,367

 
3,460

Deferred loan costs
(7,027
)
 
(9,668
)
Issuance of common stock
39

 
182

Repurchase of common stock
(19,260
)
 
—

Minimum withholding taxes paid on stock awards
(4,472
)
 
(2,215
)
Distributions to noncontrolling interests
(6,533
)
 
(10,257
)
Net cash used by financing activities
(54,885
)
 
(47,582
)
Effect of exchange rate changes on cash
(3,986
)
 
(8,165
)
Net decrease in cash, cash equivalents and restricted cash
(34,324
)
 
453

Cash, cash equivalents and restricted cash at beginning of period
107,369

 
106,916

Cash, cash equivalents and restricted cash at end of period
$
73,045

 
$
107,369

Supplemental disclosure of cash flow information:
 
 
 
Accrued capital expenditures
$
6,487

 
$
5,951

Cash paid during the period for:
 
 
 
Interest, net of capitalized interest
$
79,132

 
$
75,006

Income taxes, net of refunds
$
27,778

 
$
33,162

Non-cash financing activities:
 
 
 
Operating lease right of use asset obtained in exchange for new lease liabilities
$
40,596

 
$
—

Debt issued for assets
$
25

 
$
22




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News Release
February 25, 2020
Page 7
 
 
 
 
 

Diamond Green Diesel Joint Venture
Condensed Consolidated Balance Sheets
December 31, 2019 and December 31, 2018
(in thousands)

 
December 31,
 
December 31,
 
2019
 
2018
 
 
 
 
Assets:
 
 
 
Total current assets
$
668,026

 
$
186,258

Property, plant and equipment, net
713,489

 
576,384

Other assets
30,710

 
24,601

Total assets
$
1,412,225

 
$
787,243

 
 
 
 
Liabilities and members' equity:
 
 
 
Total current portion of long term debt
$
341

 
$
189

Total other current liabilities
75,802

 
40,619

Total long term debt
8,742

 
8,485

Total other long term liabilities
4,422

 
539

Total members' equity
1,322,918

 
737,411

Total liabilities and members' equity
$
1,412,225

 
$
787,243


Diamond Green Diesel Joint Venture
Operating Financial Results
Three Months and Fiscal Year Ended December 31, 2019 and December 31, 2018
(in thousands)


 
(Fourth Quarter Unaudited)
 
 
 
 
 
 
Three Months Ended
Twelve Months Ended
 
 
 
 
 
$ Change
 
 
 
 
$ Change
 
December 31,
 
December 31,
 
Favorable
December 31,
 
December 31,
 
Favorable
 
2019
 
2018
 
(Unfavorable)
2019
 
2018
 
(Unfavorable)
Revenues:
 
 
 
 
 
 
 
 
 
 
Operating revenues
$
357,857

 
$
270,542

 
$
87,315

$
1,217,504

 
$
677,663

 
$
539,841

Expenses:
 
 
 
 
 
 
 
 
 
 
Total costs and expenses less depreciation, amortization and accretion expense
236,149

 
160,004

 
(76,145
)
869,258

 
490,030

 
(379,228
)
Depreciation, amortization and accretion expense
12,193

 
10,544

 
(1,649
)
50,767

 
29,434

 
(21,333
)
Blenders tax credit
(430,586
)
 
—

 
430,586

(430,586
)
 
(160,394
)
 
270,192

Total costs and expenses
(182,244
)
 
170,548

 
352,792

489,439

 
359,070

 
130,369

Operating income
540,101

 
99,994

 
440,107

728,065

 
318,593

 
409,472

Other income
340

 
571

 
(231
)
2,121

 
1,919

 
202

Interest and debt expense, net
(317
)
 
(318
)
 
1

(1,282
)
 
(955
)
 
(327
)
Net income
$
540,124

 
$
100,247

 
$
439,877

$
728,904

 
$
319,557

 
$
409,347






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News Release
February 25, 2020
Page 8
 
 
 
 
 
Darling Ingredients Inc. reports Adjusted EBITDA results, which is a Non-GAAP financial measure, as a complement to results provided in accordance with generally accepted accounting principles (GAAP) (for additional information, see “Use of Non-GAAP Financial Measures” included later in this media release). The Company believes that Adjusted EBITDA provides additional useful information to investors. Adjusted EBITDA, as the Company uses the term, is calculated below:
Reconciliation of Net Income to (Non-GAAP) Adjusted EBITDA and (Non-GAAP) Pro forma Adjusted EBITDA Three and twelve months ended December 28, 2019 and December 29, 2018
 
 
(Unaudited)
 
 
 
 
 
 
Three Months Ended
 
Fiscal Year Ended
Adjusted EBITDA
 
December 28,
 
December 29,
 
December 28,
 
December 29,
(U.S. dollars in thousands)
 
2019
 
2018
 
2019
 
2018
 
 
 
 
 
 
 
 
 
Net income/(loss) attributable to Darling
 
$
242,609

 
$
40,648

 
$
312,600

 
$
101,496

Depreciation and amortization
 
86,453

 
85,277

 
325,510

 
321,192

Interest expense
 
18,586

 
20,209

 
78,674

 
86,429

Income tax expense/(benefit)
 
35,567

 
8,039

 
59,467

 
12,031

Restructuring and impairment charges
 
—

 
—

 
—

 
14,965

Foreign currency loss/(gain)
 
657

 
(651
)
 
1,311

 
6,431

Other expense/(income), net
 
(487
)
 
3,459

 
6,671

 
7,562

Debt extinguishment costs
 
—

 
—

 
12,126

 
23,509

Loss/(gain) on sale of subsidiary
 
(2,967
)
 
45

 
(2,967
)
 
12,545

Equity in net (income)/loss of Diamond Green Diesel
 
(270,062
)
 
(50,124
)
 
(364,452
)
 
(159,779
)
Equity in net (income)/loss of unconsolidated subsidiaries
 
(1,515
)
 
493

 
(428
)
 
550

Net income attributable to noncontrolling interests
 
837

 
1,496

 
8,367

 
4,448

Adjusted EBITDA
 
$
109,678

 
$
108,891

 
$
436,879

 
$
431,379

Foreign currency exchange impact
 
2,149

(1
)
—

 
16,898

(1
)
—

Pro forma Adjusted EBITDA to Foreign Currency (Non-GAAP)
 
$
111,827

 
$
108,891

 
$
453,777

 
$
431,379

 
 
 
 
 
 
 
 
 
DGD Joint Venture Adjusted EBITDA (Darling's share)
 
$
276,146

 
$
55,268

 
$
389,416

 
$
174,013

Darling plus Darling's share of DGD Joint Venture Adjusted EBITDA
 
$
385,824

 
$
164,159

 
$
826,295

 
$
605,392

 
 
 
 
 
 
 
 
 
(1) The average rates assumption used in the calculation was the actual fiscal average rate for the three months ended December 28, 2019 of €1.00:USD$1.11 and CAD$1.00:USD$0.76 as compared to the average rate for the three months ended December 29, 2018 of €1.00:USD$1.14 and CAD$1.00:USD $0.76, respectively. The average rates assumption used in the calculation was the actual fiscal average rate for the fiscal year ended December 28, 2019 of €1.00:USD$1.12 and CAD$1.00:USD $0.75 as compared to the average rate for the fiscal year ended December 29, 2018 of €1.00:USD$1.18 and CAD$1.00:USD$0.77, respectively.

About Darling
Darling Ingredients Inc. is a global developer and producer of sustainable natural ingredients from edible and inedible bio-nutrients, creating a wide range of ingredients and specialty solutions for customers in the pharmaceutical, food, pet food, feed, technical, fuel, bioenergy, and fertilizer industries.  With operations on five continents, the Company collects and transforms all aspects of animal by-product streams into useable and specialty ingredients, such as collagen, edible fats, feed-grade fats, animal proteins and meals, plasma, pet food ingredients, organic fertilizers, yellow grease, fuel feedstocks, green energy, natural casings and hides. The Company also recovers and converts recycled oils (used cooking oil and animal fats) into valuable feed and fuel ingredients and collects and processes residual bakery products into feed ingredients. In addition, the Company provides environmental services, such as grease trap collection and disposal services to food service establishments. The Company sells its products domestically and internationally and operates within three industry segments: Feed Ingredients, Food Ingredients and Fuel Ingredients. For additional information, visit the Company's website at http://www.darlingii.com.



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News Release
February 25, 2020
Page 9
 
 
 
 
 
Darling Ingredients Inc. will host a conference call to discuss the Company’s fourth quarter and fiscal year end 2019 financial results at 8:30 am Eastern Time (7:30 am Central Time) on Wednesday, February 26, 2020. To listen to the conference call, participants calling from within North America should dial 1-844-868-8847; international participants should dial 1-412-317-6593. Please refer to access code 10139036. Please call approximately ten minutes before the start of the call to ensure that you are connected.

The call will also be available as a live audio webcast that can be accessed on the Company website at http://ir.darlingii.com. Beginning one hour after its completion, a replay of the call can be accessed through March 4, 2020, by dialing 1-877-344-7529 (U.S. callers), 1-855-669-9658 (Canada) and 1-412-317-0088 (international callers). The access code for the replay is 10139036. The conference call will also be archived on the Company’s website.

Use of Non-GAAP Financial Measures:

Adjusted EBITDA is not a recognized accounting measurement under GAAP; it should not be considered as an alternative to net income, as a measure of operating results, or as an alternative to cash flow as a measure of liquidity and is not intended to be a presentation in accordance with GAAP. Adjusted EBITDA is presented here not as an alternative to net income, but rather as a measure of the Company’s operating performance. Since EBITDA (generally, net income plus interest expenses, taxes, depreciation and amortization) is not calculated identically by all companies, this presentation may not be comparable to EBITDA or Adjusted EBITDA presentations disclosed by other companies. Adjusted EBITDA is calculated in this presentation and represents, for any relevant period, net income/(loss) plus depreciation and amortization, goodwill and long-lived asset impairment, interest expense, (income)/loss from discontinued operations, net of tax, income tax provision, other income/(expense) and equity in net loss of unconsolidated subsidiary. Management believes that Adjusted EBITDA is useful in evaluating the Company’s operating performance compared to that of other companies in its industry because the calculation of Adjusted EBITDA generally eliminates the effects of financing, income taxes and certain non-cash and other items that may vary for different companies for reasons unrelated to overall operating performance.

As a result, the Company’s management uses Adjusted EBITDA as a measure to evaluate performance and for other discretionary purposes. In addition to the foregoing, management also uses or will use Adjusted EBITDA to measure compliance with certain financial covenants under the Company’s Senior Secured Credit Facilities and 5.25% Notes and 3.625% Notes that were outstanding at December 28, 2019. However, the amounts shown in this presentation for Adjusted EBITDA differ from the amounts calculated under similarly titled definitions in the Company’s Senior Secured Credit Facilities and 5.25% Notes and 3.625% Notes, as those definitions permit further adjustments to reflect certain other non-recurring costs, non-cash charges and cash dividends from the DGD Joint Venture. Additionally, the Company evaluates the impact of foreign exchange impact on operating cash flow, which is defined as segment operating income (loss) plus depreciation and amortization.
Cautionary Statements Regarding Forward-Looking Information:
{This media release contains “forward-looking” statements regarding the business operations and prospects of Darling Ingredients Inc. and industry factors affecting it. These statements are identified by words such as “believe,” “anticipate,” “expect,” “estimate,” “intend,” “could,” “may,” “will,” “should,” “planned,” “potential,” “continue,” “momentum,” and other words referring to events that may occur in the future. These statements reflect Darling Ingredient’s current view of future events and are based on its assessment of, and are subject to, a variety of risks and uncertainties beyond its control, each of which could cause actual results to differ materially from those indicated in the forward-looking statements. These factors include, among others, existing and unknown future limitations on the ability of the Company's direct and indirect subsidiaries to make their cash flow available to the Company for payments on the Company's indebtedness or other purposes; global demands for bio-fuels and grain and oilseed commodities, which have exhibited volatility, and can impact the cost of feed for cattle, hogs and poultry, thus affecting available rendering feedstock and selling prices for the Company’s products; reductions in raw material volumes available to the Company due to weak margins in the meat production industry as a result of higher feed costs, reduced consumer demand or other factors, reduced volume from food




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News Release
February 25, 2020
Page 10
 
 
 
 
 
service establishments, or otherwise; reduced demand for animal feed; reduced finished product prices, including a decline in fat and used cooking oil finished product prices; changes to worldwide government policies relating to renewable fuels and greenhouse gas(“GHG”) emissions that adversely affect programs like the U.S. government’s renewable fuel standard, low carbon fuel standards (“LCFS”) and tax credits for biofuels both in the Unites States and abroad; possible product recall resulting from developments relating to the discovery of unauthorized adulterations to food or food additives; the occurrence of 2009 H1N1 flu (initially known as “Swine Flu”), Highly pathogenic strains of avian influenza (collectively known as “Bird Flu”), bovine spongiform encephalopathy (or "BSE"), porcine epidemic diarrhea ("PED") or other diseases associated with animal origin in the United States or elsewhere, such as the outbreak of African Swine Fever (“ASF”) in China and elsewhere; escalation in the outbreak of the coronavirus; 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, PED, BSE, ASF or similar or unanticipated regulations) affecting the industries in which the Company operates or its value added products; risks associated with the DGD Joint Venture, including possible unanticipated operating disruptions and issues relating to the announced expansion 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; difficulties or a significant disruption in our information systems or failure to implement new systems and software successfully, including our ongoing enterprise resource planning project; risks relating to possible third party claims of intellectual property infringement; increased contributions to the Company’s pension and benefit plans, including multiemployer and employer-sponsored defined benefit pension plans as required by legislation, regulation or other applicable U.S. or foreign law or resulting from a U.S. mass withdrawal event; bad debt write-offs; loss of or failure to obtain necessary permits and registrations; continued or escalated conflict in the Middle East, North Korea, Ukraine or elsewhere; uncertainty regarding the likely exit of the U.K. from the European Union; and/or unfavorable export or import markets. These factors, coupled with volatile prices for natural gas and diesel fuel, climate conditions, currency exchange fluctuations, general performance of the U.S. and global economies, disturbances in world financial, credit, commodities and stock markets, and any decline in consumer confidence and discretionary spending, including the inability of consumers and companies to obtain credit due to lack of liquidity in the financial markets, among others, could negatively impact the Company's results of operations. Among other things, future profitability may be affected by the Company’s ability to grow its business, which faces competition from companies that may have substantially greater resources than the Company. The Company’s announced share repurchase program may be suspended or discontinued at any time and purchases of shares under the program are subject to market conditions and other factors, which are likely to change from time to time. Other risks and uncertainties regarding Darling Ingredients Inc., its business and the industries in which it operates are referenced from time to time in the Company’s filings with the Securities and Exchange Commission. Darling Ingredients Inc. is under no obligation to (and expressly disclaims any such obligation to) update or alter its forward-looking statements whether as a result of new information, future events or otherwise.}

For More Information, contact:
 
 
 
Jim Stark, Vice President, Investor Relations
5601 N. MacArthur Blvd., Irving, Texas 75038
 
Phone : 972-281-4823
 



EXHIBIT 99.2 Fourth Quarter and Fiscal Year End 2019 Conference Call

 
This presentation contains “forward-looking” statements that are subject to risks and uncertainties that could cause the actual results of Darling Ingredients Inc. (the “Company”) 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,” “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. 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. These factors include, among others, existing and unknown future limitations on the ability of the Company's direct and indirect subsidiaries to make their cash flow available to the Company for payments on the Company's indebtedness or other purposes; global demands for bio-fuels and grain and oilseed commodities, which have exhibited volatility, and can impact the cost of feed for cattle, hogs and poultry, thus affecting available rendering feedstock and selling prices for the Company’s products; reductions in raw material volumes available to the Company due to weak margins in the meat production industry as a result of higher feed costs, reduced consumer demand or other factors, reduced volume from food service establishments, or otherwise; reduced demand for animal feed; reduced finished product prices, including a decline in fat and used cooking oil finished product prices; changes to worldwide government policies relating to renewable fuels and greenhouse gas(“GHG”) emissions that adversely affect programs like the U.S. government’s renewable fuel standard, low carbon fuel standards (“LCFS”) and tax credits for biofuels both in the Unites States and abroad; possible product recall resulting from developments relating to the discovery of unauthorized adulterations to food or food additives; the occurrence of 2009 H1N1 flu (initially known as “Swine Flu”), Highly pathogenic strains of avian influenza (collectively known as “Bird Flu”), severe acute respiratory syndrome (“SARS”), bovine spongiform encephalopathy (or "BSE"), porcine epidemic diarrhea ("PED") or other diseases associated with animal origin in the United States or elsewhere, such as the outbreak of African Swine Fever (“ASF”) in China and elsewhere; escalation in the outbreak of the coronavirus; 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 and issues relating to the announced expansion 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; difficulties or a significant disruption in our information systems or failure to implement new systems and software successfully, including our ongoing enterprise resource planning project; risks relating to possible third party claims of intellectual property infringement; increased contributions to the Company’s pension and benefit plans, including multiemployer and employer-sponsored defined benefit pension plans as required by legislation, regulation or other applicable U.S. or foreign law or resulting from a U.S. mass withdrawal event; bad debt write-offs; loss of or failure to obtain necessary permits and registrations; continued or escalated conflict in the Middle East, North Korea, Ukraine or elsewhere; uncertainty regarding the likely exit of the U.K. from the European Union; and/or unfavorable export or import markets. These factors, coupled with volatile prices for natural gas and diesel fuel, climate conditions, currency exchange fluctuations, general performance of the U.S. and global economies, disturbances in world financial, credit, commodities and stock markets, and any decline in consumer confidence and discretionary spending, including the inability of consumers and companies to obtain credit due to lack of liquidity in the financial markets, among others, could cause actual results to vary materially from the forward-looking statements included in this presentation or negatively impact the Company's results of operations. Among other things, future profitability may be affected by the Company’s ability to grow its business, which faces competition from companies that may have substantially greater resources than the Company. The Company’s announced share repurchase program may be suspended or discontinued at any time and purchases of shares under the program are subject to market conditions and other factors, which are likely to change from time to time. Other risks and uncertainties regarding Darling Ingredients Inc., its business and the industries in which it operates are referenced from time to time in the Company’s filings with the Securities and Exchange Commission. Darling Ingredients Inc. is under no obligation to (and expressly disclaims any such obligation to) update or alter its forward-looking statements whether as a result of new information, future events or otherwise. Page 2 | Fourth Quarter and Fiscal Year 2019 Results | 02.26.2020

 
US$ (millions) except per share price Q4-2018 Total 2018 Q1-2019 Q2-2019 Q3-2019 Q4-2019 Total 2019 2019 Highlights Net sales $ 853.1 $ 3,387.7 $ 835.1 $ 827.3 $ 842.0 $ 859.4 $ 3,363.9 Gross margin 185.4 741.3 184.1 182.6 189.1 219.0 774.8 • Record 2019 proforma operating income of $389.2 million, up Gross margin % 21.7% 21.9% 22.0% 22.1% 22.5% 25.5% 23.0% approximately 56% over 2018 after adjusting for 2018 and 2017 Loss (gain) on sale of assets 0.2 0.7 (4.3) (13.9) (2.7) 0.3 (20.6) retroactive blender’s tax credit (BTC) into period earned SG&A 76.4 309.3 85.0 81.0 83.5 109.0 358.5 • Global inputs over 11 MMT, up ≈ 2% from 2018 Restructuring and impairment charges - (15.0) - - - - - • Returned $19.2 million of capital to shareholders, buying back Equity in net income of Diamond Green Diesel * 50.1 159.8 24.3 38.1 32.0 270.1 364.5 approximately 1 million shares of Darling common stock Operating income 73.7 255.0 48.6 74.1 59.9 293.2 475.8 • Refinanced US Bond in Q2 2019, lowering borrowing costs by 12.5 Combined adjusted EBITDA (1) 164.1 605.4 133.2 159.4 147.8 385.8 826.3 bps and extending maturity to 2027 Interest expense (20.2) (86.4) (19.9) (20.8) (19.4) (18.6) (78.7) • DGD sold ≈ 77 million gallons of renewable diesel in Q4 2019 at an Debt extinguishment costs - (23.5) - (12.1) - - (12.1) average of $2.57 EBITDA per gallon. For all of 2019, DGD sold ≈ 277 Foreign currency (loss)/gain 0.7 (6.4) (0.7) (0.4) 0.5 (0.7) (1.3) million gallons at an average of $2.25 EBITDA per gallon Gain/(loss) on disposal of subsidiaries - (12.5) - - - 3.0 3.0 • Received $67.5 million in cash dividends from Diamond Green Other expense (2) (3.6) (7.7) (2.6) (2.0) (2.6) 0.6 (6.6) Diesel (‘DGD’) Equity in net income/(loss) of unconsolidated subsidiaries (0.5) (0.6) (0.5) 0.1 (0.7) 1.5 0.4 • Growth Projects completed in 2019: Income tax expense (8.0) (12.0) (5.3) (7.8) (10.9) (35.6) (59.5) • Peptan Facilities – Amparo, Brazil & Angouleme, France Net income attributable to noncontrolling interests (1.4) (4.4) (1.6) (4.8) (1.1) (0.8) (8.4) • Protein Recovery Plants – Los Angeles, CA & Wahoo, NE Net income/(loss) attributable to Darling $ 40.6 $ 101.5 $ 18.0 $ 26.3 $ 25.7 $ 242.6 $ 312.6 • Ecoson Digester Phase II in Denderleeuw, Belgium Earnings per share (fully diluted) $ 0.24 $ 0.60 $ 0.11 $ 0.16 $ 0.15 $ 1.44 $ 1.86 Prior to third quarter 2019, the equity in DGD was presented below the operating income line in the Company’s published results. Commencing with the third • Company launched ESG fact sheet, bringing Darling Ingredients to * quarter 2019, the Company will be including the equity in DGD in operating income as shown in this slide. For comparison purposes, the presentation in these the forefront of the green revolution slides shows the equity in DGD in a consistent manner across all periods presented. As a result, operating income as shown in these slides for periods prior to third quarter 2019 will differ from the amounts of operating income reported in prior reports. Page 3 | Fourth Quarter and Fiscal Year 2019 Results | 02.26.2020 (1) Includes Darling's core business EBITDA and Darling's share of DGD EBITDA (2) Rounding captured in Other Expense

 
Q4 2019 Overview $250 Quarterly Proforma Combined Adjusted EBITDA, adjusting for timing of BTC earned $198.9 $200 $196.9 $192.7 • Net sales - $ 859.4 million $170.3 $179.8 • Net income - $ 242.6 million $88.0 $78.6 $150 $68.6 • EPS at $1.44 per diluted share $65.1 $99.1 • $100 Combined adjusted EBITDA* - $385.8 million, $299.2 excluding 2018 BTC $ inmillions • Term Loan A paid off in the 4th quarter $110.9 $118.3 $111.1 • Approximately $912 million available of borrowing capacity $50 $105.2 $93.5 *Combined adjusted EBITDA includes Darling’s core business EBITDA and Darling’s share of DGD EBITDA $0 4Q18 1Q19 2Q19 3Q19 4Q19 Core DGD Adjusted EBITDA is a Non-U.S. GAAP Measure (See slide 16) Darling’s share of Diamond Green Diesel’s EBITDA excluding any BTC assumptions Darling Production Volumes Darling Core Proforma Adjusted EBITDA (000's metric tons) 2017 & 2018 Darling BTC moved to the period earned 1,800 $456 1,600 380 $460 1,400 $445 345 314 1,200 316 $440 317 $428 $428 1,000 $413 800 $420 Metric tons 1,275 600 1,161 1,072 968 1,026 $ in millions in $ $400 400 200 $380 - 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 Animal Fats Used Cooking Oil Page 4 | Fourth Quarter and Fiscal Year 2019 Results | 02.26.2020

 
US$ (in millions) Q4-2018 Total 2018 Q1-2019 Q2-2019 Q3-2019 Q4-2019 Total 2019 Net Sales $ 485.3 $ 1,952.6 $ 495.8 $ 487.4 $ 497.0 $ 490.4 $ 1,970.6 Gross Margin 110.4 454.6 109.0 110.5 117.2 114.3 451.0 Gross Margin % 22.7% 23.2% 22.0% 22.7% 23.6% 23.3% 22.9% Adj. EBITDA Bridge Q4-2018 to Q4-2019 Loss/(gain) on sale of assets 0.2 0.7 (4.4) (0.5) (2.4) (0.4) (7.7) (millions) SG&A 44.8 176.7 48.8 46.5 47.3 57.9 200.5 80 $6.1 SG&A Margin % 9.2% 9.0% 9.8% 9.5% 9.5% 11.8% 10.2% 70 $65.3 $1.9 ($3.3) $0.6 $57.2 $56.8 Operating Income 11.9 82.8 15.2 15.8 22.1 1.6 54.7 60 $(13.4) $(0.3) Adj. EBITDA (1) $ 65.3 $ 277.1 $ 64.5 $ 64.5 $ 72.3 $ 56.8 $ 258.2 50 40 Raw Material Processed (mmts) 2.18 8.60 2.18 2.16 2.19 2.21 8.74 30 (1) Does not include Unconsolidated Subsidiaries EBITDA 20 10 0 EBITDA Price / Volumes Cost of Sale of SG&A Adjusted FX EBITDA Key Drivers: Q4 18 Yield Sales Asset EBITDA Impact Q4 19 • Global rendering raw material volumes up approximately 1.7% year over year Note: Cost of Sales includes raw material costs, collection costs and factory costs. • Fat prices up year over year, showing a positive start to 2020 • Protein pricing remains under pressure • Segment EBITDA sequentially down due to protein pricing pressure and timing of incentive compensation accrual Page 5 | Fourth Quarter and Fiscal Year 2019 Results | 02.26.2020

 
US$ (in millions) Q4-2018 Total 2018 Q1-2019 Q2-2019 Q3-2019 Q4-2019 Total 2019 Net Sales $ 291.7 $ 1,139.1 $ 279.2 $ 274.8 $ 276.5 $ 288.6 $ 1,119.1 Gross Margin 58.6 221.0 65.1 60.4 61.8 67.2 254.5 Gross Margin % 20.1% 19.4% 23.3% 22.0% 22.4% 23.3% 22.8% Loss/(gain) on sale of assets - (0.3) 0.1 (13.4) (0.2) 0.3 (13.2) Adj. EBITDA Bridge Q4-2018 to Q4-2019 (millions) SG&A 23.6 91.5 21.9 23.4 22.8 29.3 97.4 SG&A Margin % 8.1% 8.0% 7.8% 8.5% 8.2% 10.2% 8.7% 50 $4.7 $8.5 ($0.4) (1,2) $38.7 ($1.2) $37.5 Operating Income 14.6 48.7 23.6 30.5 19.5 17.0 90.6 40 $34.9 ($2.5) ($6.5) (1,2) Adj. EBITDA $ 34.9 $ 129.7 $ 43.2 $ 37.1 $ 39.3 $ 37.5 $ 157.1 30 Raw Material Processed (mmts) 0.3 1.1 0.3 0.3 0.3 0.3 1.1 20 (1) Adjusted for restructuring charges of $15.0 million for closure of Argentina collagen plant in 2018 (2) Q2 2019 adjusted for the $13.2 million land asset sale in China 10 0 EBITDA Price / Volumes Cost of Sale of SG&A Adjusted FX EBITDA Key Drivers: Q4 18 Yield Sales Asset EBITDA Impact Q4 19 Note: Cost of Sales includes raw material costs, collection costs and factory costs. • Continued strong demand in our collagen business line delivering improved margins and earnings • Growing demand for our Peptan products should drive improved earnings in 2nd half 2020 • Food segment volumes flat year over year as volumes of higher margin hydrolyzed collagen sales were up year over year, offset by lower European edible fats volumes impacted by raw materials continuing to be diverted to China food markets and the closure of the Hurlingham, Argentina facility in May 2018 Page 6 | Fourth Quarter and Fiscal Year 2019 Results | 02.26.2020

 
(Includes Diamond Green Diesel JV consolidated EBITDA) US$ (in millions) Q4-2018 Total 2018 Q1-2019 Q2-2019 Q3-2019 Q4-2019 Total 2019 Net Sales $ 76.2 $ 296.0 $ 60.1 $ 65.0 $ 68.6 $ 80.6 $ 274.3 Key Drivers: Gross Margin 16.6 65.8 10.0 11.7 10.1 37.6 69.4 • Combined adjusted EBITDA of $311.2 million, with DGD earning $2.57 Gross Margin % 21.8% 22.2% 16.7% 18.0% 14.7% 46.7% 25.3% per gallon on 77.1 million gallons sold for Q4-19 and $2.25 per gallon Loss/(gain) on sale of assets 0.1 0.3 - - - 0.3 0.3 for all 2019. Includes the $1.00 blender’s tax credit approved in Dec. SG&A (0.8) (4.8) (0.8) 0.4 0.9 2.3 2.8 2019 Depreciation and amortization 8.6 35.0 7.8 8.4 7.9 7.8 31.9 Equity in net income/(loss) • Diamond Green II expansion remains on schedule to be completed in of Diamond Green Diesel (DGD) 50.1 159.8 24.3 38.1 32.0 270.1 364.5 the fourth quarter of 2021. Adding 400 million gallons of annual Segment Income 58.7 195.1 27.3 41.1 33.3 297.2 398.8 capacity, gives DGD 675 million gallons of renewable diesel production Segment EBITDA 17.2 70.3 10.8 11.4 9.2 35.0 66.3 plus an additional 60 million gallons of renewable naphtha DGD adjusted EBITDA (Darling's Share) 55.2 174.0 29.8 43.8 39.5 276.2 389.4 • Blenders Tax Credit (BTC) in place for 2020, 2021 and 2022 Combined Adj. EBITDA (1) $ 72.4 $ 244.3 $ 40.6 $ 55.2 $ 48.7 $ 311.2 $ 455.7 Raw Material Processed*(mmts) 0.3 1.2 0.3 0.3 0.3 0.3 1.3 US$ and gallons (in millions) Q1-2017 Q2-2017 Q3-2017 Q4-2017 Total 2017 Q1-2018 Q2-2018 Q3-2018 Q4-2018 Total 2018 Q1-2019 Q2-2019 Q3-2019 Q4-2019 Total 2019 EBITDA (Entity) - in quarter recorded w/no BTC $ 10.0 $ 24.8 $ 21.2 $ 30.4 $ 86.4 $ 39.7 $ 36.3 $ 1.0 $ 110.6 $ 187.6 $ 59.7 $ 87.8 $ 79.1 $ 121.7 $ 348.3 EBITDA (Entity) - BTC adjusted to when earned $ 42.7 $ 65.3 $ 64.2 $ 74.7 $ 246.8 $ 72.8 $ 70.8 $ 23.9 $ 176.1 $ 343.5 $ 130.2 $ 157.2 $ 137.3 $ 198.2 $ 623.0 Pro forma Adjusted EBITDA (2) (Darling's share) $ 21.3 $ 32.6 $ 32.1 $ 37.3 $ 123.4 $ 36.4 $ 35.4 $ 11.9 $ 88.0 $ 171.7 $ 65.1 $ 78.6 $ 68.6 $ 99.1 $ 311.5 Total gallons produced 32.6 43.7 41.7 43.3 161.3 37.1 33.2 17.2 72.8 160.3 67.6 73.2 55.9 77.9 274.6 Total gallons sold/shipped 32.7 40.5 43.0 44.3 160.5 33.4 34.8 23.1 66.1 157.4 71.1 70.0 58.7 77.1 276.9 EBITDA per gallon sold/shipped $ 1.31 $ 1.61 $ 1.49 $ 1.69 $ 1.54 $ 2.18 $ 2.03 $ 1.03 $ 2.66 $ 2.18 $ 1.83 $ 2.25 $ 2.34 $ 2.57 $ 2.25 (1) Includes Fuel Segment EBITDA and Darling's share of DGD EBITDA. Page 7 | Fourth Quarter and Fiscal Year 2019 Results | 02.26.2020 * Excludes feed stock (raw material) processed at the DGD joint venture.

 
Existing 275 million gallon renewable diesel facility 400 million gallon expansion project Page 8 | Fourth Quarter and Fiscal Year 2019 Results | 02.26.2020

 
(US$,Balance in thousands) Sheet HighlightsJune 30, 2018 Debt Summary S&P Ratings Cash(US$, in thousands) (includes restricted cashDecember of $142)28, 2019 (US$, in thousands) December 28, 2019 Cash (includes restricted cash$104,262 of $110) $ 73,045 Amended Credit Agreement Term Loan B – BBB- Corporate Family – BB+ AccountsAccounts receivable receivable 371,291 406,338 Revolving Credit Facility $ 39,000 Revolver & Term Loan A – BBB- Total InventoriesTotal Inventories 370,555 362,957 Term Loan A - U.S. Bonds – BB+ Net workingNet working capital capital 338,672 246,900 Term Loan B 487,304 Euro Bonds – BB+ NetNet property, property, plant and plant equipment and equipment 1,802,411 5.25% Senior Notes due 2027 493,506 Moody’s Ratings Total assets 1,624,354 5,345,258 3.625% Senior Notes due 2026 567,114 Term Loan B – Ba1 Total debtTotal assets 4,856,916 1,649,425 Other Notes and Obligations 62,501 Corporate Family – Ba2 Shareholders'Total equity debt 1,695,289$ 2,643,350 Total Debt: $ 1,649,425 Revolver & Term Loan A – Ba1 U.S. Bonds – Ba3 Shareholders' equity $2,238,031 Euro Bonds – Ba3 Leverage Ratio Historical Leverage Ratios 2015 – Q4 2019 December 28, 2019 Actual Credit Agreement Total Debt to EBITDA: 3.18x 5.50x Note: Leverage ratio calculated per bank covenant Page 9 | Fourth Quarter and Fiscal Year 2019 Results | 02.26.2020

 
Appendix – Additional Information Page 10 | Fourth Quarter and Fiscal Year 2019 Results | 02.26.2020

 
Average LCFS Carbon Credit Price Weighted Ave Price (USD/MT) $250 $200 $150 $100 $50 $- Jun-16 Jun-18 Jun-19 Jun-17 Oct-17 Oct-18 Oct-16 Oct-19 Apr-17 Apr-18 Apr-16 Apr-19 Feb-17 Feb-19 Feb-18 Dec-16 Dec-18 Dec-17 Dec-19 Aug-16 Aug-17 Aug-19 Aug-18 Source: https://ww3.arb.ca.gov/fuels/lcfs/credit/lrtweeklycreditreports.htm Page 11 | Fourth Quarter and Fiscal Year 2019 Results | 02.26.2020

 
US$ (in millions) Total 2017 Q1-2018 Q2-2018 Q3-2018 Q4-2018 Total 2018 Q1-2019 Q2-2019 Q3-2019 Q4-2019 Total 2019 Net Sales $ 2,239.5 $ 485.8 (1) $ 498.8 (1) $ 482.7 (1) $ 485.3 $ 1,952.6 $ 495.8 $ 487.4 $ 497.0 $ 490.4 $ 1,970.6 Gross Margin 494.5 116.3 128.8 99.0 110.4 454.6 109.0 110.5 117.2 114.3 451.0 Gross Margin % 22.1% 23.9% 25.8% 20.5% 22.7% 23.2% 22.0% 22.7% 23.6% 23.3% 22.9% Loss/(gain) on sale of assets (0.4) (0.4) 0.8 0.1 0.2 0.7 (4.4) (0.5) (2.4) (0.4) (7.7) SG&A 178.3 48.3 43.9 39.7 44.8 176.7 48.8 46.5 47.3 57.9 200.5 SG&A Margin % 8.0% 9.9% 8.8% 8.2% 9.2% 9.0% 9.8% 9.5% 9.5% 11.8% 10.2% Operating Income 132.3 21.7 37.3 11.9 11.9 82.8 15.2 15.8 22.1 1.6 54.7 Adj. EBITDA (2) $ 316.5 $ 68.5 $ 84.1 $ 59.2 $ 65.3 $ 277.1 $ 64.5 $ 64.5 $ 72.3 $ 56.8 $ 258.2 Adj. EBITDA Margin % 14.1% 14.1% 16.9% 12.3% 13.5% 14.2% 13.0% 13.2% 14.5% 11.5% 13.2% Raw Material Processed (mmts) 8.2 2.1 2.1 2.2 2.2 8.6 2.2 2.2 2.2 2.2 8.7 (1) Reflects freight revenue reclass and deconsolidation of BestHides (2) Does not include Unconsolidated Subsidiaries EBITDA Page 12 | Fourth Quarter and Fiscal Year 2019 Results | 02.26.2020

 
Jacobsen, Wall Street Journal and Thomson Reuters 2019 Finished Product Pricing 2019 Average Jacobsen Prices (USD) 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 $27.00 $27.00 $27.00 $27.00 $28.55 $29.00 $30.00 $29.20 $30.99 $31.70 $28.50 $30.50 $26.61 $24.00 $26.05 $25.62 $28.08 Yellow Grease - Illinois / cwt $20.89 $20.84 $20.48 $20.72 $21.22 $22.42 $23.51 $22.40 $24.86 $24.95 $23.49 $24.53 $21.33 $19.75 $19.99 $20.39 $22.01 Meat and Bone Meal - Ruminant - Illinois / ton $250.00 $250.00 $250.00 $250.00 $249.52 $226.82 $205.00 $227.10 $206.36 $215.11 $230.00 $216.29 $230.00 $230.00 $230.00 $230.01 $230.85 Poultry By-Product Meal - Feed Grade - Mid South/ton $267.86 $270.00 $270.00 $269.26 $245.95 $235.00 $235.00 $238.16 $235.00 $235.00 $235.00 $234.60 $235.00 $219.21 $215.00 $223.46 $241.37 Poultry By-Product Meal - Pet Food - Mid South/ton $657.14 $712.24 $686.79 $684.51 $637.50 $585.80 $532.50 $584.53 $456.25 $402.84 $387.50 $411.77 $412.50 $390.92 $422.62 $408.75 $522.39 Feathermeal - Mid South / ton $457.02 $458.29 $429.17 $447.83 $364.17 $335.80 $344.50 $346.41 $339.55 $337.50 $326.50 $333.43 $291.52 $282.50 $277.62 $283.81 $352.87 2019 Cash Corn Pricing 2019 Average Wall Street Journal Prices (USD) 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 $3.54 $3.51 $3.41 $3.49 $3.37 $3.53 $4.18 $3.69 $4.36 $3.82 $3.54 $3.91 $3.79 $3.67 $3.73 $3.73 $3.71 2019 European Benchmark Pricing 2019 Average Thomson Reuters Prices (USD) Palm Oil - 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 $555 $562 $532 $550 $535 $507 $503 $515 $497 $544 $559 $533 $570 $676 $779 $675 $568.25 Soy meal - CIF Rotterdam / metric ton $361 $353 $345 $353 $341 $337 $363 $347 $348 $337 $333 $339 $341 $347 $352 $347 $346.50 QTR. Over QTR. Year Over Year Comparison Q3-2019 Q4-2019 % Q4-2018 Q4-2019 % Average Jacobsen Prices (USD) Avg. Avg. Change Avg. Avg. Change Bleachable Fancy Tallow - Chicago Renderer / cwt $30.50 $25.62 -16.0% $25.80 $25.62 -0.7% Yellow Grease - Illinois / cwt $24.53 $20.39 -16.9% $19.91 $20.39 2.4% Meat and Bone Meal - Ruminant - Illinois / ton $216.29 $230.01 6.3% $250.18 $230.01 -8.1% Poultry By-Product Meal - Feed Grade - Mid South / ton $234.60 $223.46 -4.7% $267.19 $223.46 -16.4% Poultry By-Product Meal - Pet Food - Mid South / ton $411.77 $408.75 -0.7% $540.68 $408.75 -24.4% Feathermeal - Mid South / ton $333.43 $283.81 -14.9% $405.90 $283.81 -30.1% Average Wall Street Journal Prices (USD) Corn - Track Central IL #2 Yellow / bushel $3.91 $3.73 -4.6% $3.37 $3.73 10.7% Average Thomson Reuters Prices (USD) Palm oil - CIF Rotterdam / metric ton $533 $675 26.6% $497 $675 35.8% Soy meal - CIF Rotterdam / metric ton $339 $347 -1.5% $368 $347 -5.7% Page 13 | Fourth Quarter and Fiscal Year 2019 Results | 02.26.2020

 
US$ (in millions) Total 2017 Q1-2018 Q2-2018 Q3-2018 Q4-2018 Total 2018 Q1-2019 Q2-2019 Q3-2019 Q4-2019 Total 2019 Net Sales $ 1,157.0 (1) $305.5 (2) $ 276.7 (2) $ 265.2 (2) $ 291.7 (2) $ 1,139.1 $ 279.2 (2) $ 274.8 (2) $ 276.5 (2) $ 288.6 $ 1,119.1 Gross Margin 236.8 56.1 51.8 54.5 58.6 221.0 65.1 60.4 61.8 67.2 254.5 Gross Margin % 20.5% 18.4% 18.7% 20.6% 20.1% 19.4% 23.3% 22.0% 22.4% 23.3% 22.7% Loss/(gain) on sale of assets 0.2 (0.2) (0.1) - - (0.3) 0.1 (13.4) (0.2) 0.3 (13.2) SG&A 104.6 23.9 22.2 21.8 23.6 91.5 21.9 23.4 22.8 29.3 97.4 SG&A Margin % 9.0% 7.8% 8.0% 8.2% 8.1% 8.0% 7.8% 8.5% 8.2% 10.2% 8.7% Operating Income 56.9 11.8 9.3 (3) 13.0 (3) 14.6 (3) 48.7 23.6 30.5 19.5 17.0 90.6 Adj. EBITDA $ 131.9 $ 32.4 $ 29.7 (3) $ 32.7 (3) $ 34.9 (3) $ 129.7 $ 43.2 $ 37.1 (4) $ 39.3 $ 37.5 $ 157.1 Adj. EBITDA Margin % 11.4% 10.6% 10.7% 12.3% 12.0% 11.4% 15.5% 13.5% 14.2% 13.0% 14.0% Raw Material Processed (mmts) 1.1 0.3 0.3 0.3 0.3 1.1 0.3 0.3 0.3 0.3 1.1 (1) Net sales adjusted for Brazil VAT reclass 2017 (2) Reflects freight revenue reclass in 2018 and 2019 (3) Adjusted for restructuring and impairment charges of $15.0 million for closure of Argentina collagen plant (4) Adjusted for the $13.4 million land asset sale in China Page 14 | Fourth Quarter and Fiscal Year 2019 Results | 02.26.2020

 
US$ (in millions) Total 2017 Q1-2018 Q2-2018 Q3-2018 Q4-2018 Total 2018 Q1-2019 Q2-2019 Q3-2019 Q4-2019 Total 2019 Net Sales $ 265.8 $ 84.1 $ 71.1 $ 64.6 $ 76.2 $ 296.0 $ 60.1 $ 65.0 $ 68.6 $ 80.6 $ 274.3 Gross Margin 55.3 24.3 13.7 11.2 16.6 65.8 10.0 11.7 10.1 37.6 69.4 Gross Margin % 20.8% 28.9% 19.3% 17.3% 21.8% 22.2% 16.7% 18.0% 14.7% 46.7% 25.3% Loss/(gain) on sale of assets (0.1) 0.1 - 0.1 0.1 0.3 - - - 0.3 0.3 SG&A 10.4 (1.4) 0.2 (2.8) (0.8) (4.8) (0.8) 0.4 0.9 2.3 2.8 Depreciation and amortization 31.0 8.5 8.5 9.4 8.6 35.0 7.8 8.4 7.9 7.8 31.9 Equity in net income/(loss) of Diamond Green Diesel (DGD) 28.2 97.2 15.1 (2.6) 50.1 159.8 24.3 38.1 32.0 270.1 364.5 Segment Income 42.2 114.4 20.1 1.9 58.7 195.1 27.3 41.1 33.3 297.2 398.8 Segment EBITDA 45.0 25.7 13.5 13.9 17.2 70.3 10.8 11.4 9.2 35.0 66.3 DGD adjusted EBITDA (Darling's Share) 43.2 100.0 18.3 0.5 55.2 174.0 29.8 43.8 39.5 276.2 389.4 Combined Adj. EBITDA (1) $ 88.2 $ 125.7 $ 31.8 $ 14.4 $ 72.4 $ 244.3 $ 40.6 $ 55.2 $ 48.7 $311.2 $ 455.7 Raw Material Processed*(mmts) 1.2 0.3 0.3 0.3 0.3 1.2 0.3 0.3 0.3 0.3 1.3 (1) Includes Fuel Segment EBITDA and Darling's share of DGD EBITDA. * Excludes feed stock (raw material) processed at the DGD joint venture. Page 15 | Fourth Quarter and Fiscal Year 2019 Results | 02.26.2020

 
Adjusted EBITDA is not a recognized accounting measurement under GAAP; it should not be considered as an alternative to net income, as a measure of operating results, or as an alternative to cash flow as a measure of liquidity, and is not intended to be a presentation in accordance with GAAP. Adjusted EBITDA is presented here not as an alternative to net income, but rather as a measure of the Company’s operating performance. Since EBITDA (generally, net income plus interest expenses, taxes, depreciation and amortization) is not calculated identically by all companies, this presentation may not be comparable to EBITDA or Adjusted EBITDA presentations disclosed by other companies. Adjusted EBITDA is calculated in this presentation and represents, for any relevant period, net income/(loss) plus depreciation and amortization, goodwill and long-lived asset impairment, interest expense, (income)/loss from discontinued operations, net of tax, income tax provision, other income/(expense) and equity in net loss of unconsolidated subsidiary. Management believes that Adjusted EBITDA is useful in evaluating the Company’s operating performance compared to that of other companies in its industry because the calculation of Adjusted EBITDA generally eliminates the effects of financing, income taxes and certain non-cash and other items that may vary for different companies for reasons unrelated to overall operating performance. As a result, the Company’s management uses Adjusted EBITDA as a measure to evaluate performance and for other discretionary purposes. In addition to the foregoing, management also uses or will use Adjusted EBITDA to measure compliance with certain financial covenants under the Company’s Senior Secured Credit Facilities and 5.25% Notes and 3.625% Notes that were outstanding at December 28, 2019. However, the amounts shown in this presentation for Adjusted EBITDA differ from the amounts calculated under similarly titled definitions in the Company’s Senior Secured Credit Facilities and 5.25% Notes and 3.625% Notes, as those definitions permit further adjustments to reflect certain other non-recurring costs, non-cash charges and cash dividends from the DGD Joint Venture. Additionally, the Company evaluates the impact of foreign exchange impact on operating cash flow, which is defined as segment operating income (loss) plus depreciation and amortization. Page 16 | Fourth Quarter and Fiscal Year 2019 Results | 02.26.2020

 
Adjusted EBITDA and Pro Forma Adjusted EBITDA Three Months Ended Twelve Months Ended - Year over Year (US$ in thousands) December 28, December 29, December 28, December 29, 2019 2018 2019 2018 Net income attributable to Darling $ 242,609 $ 40,648 $ 312,600 $ 101,496 Depreciation and amortization 86,453 85,277 325,510 321,192 Interest expense 18,586 20,209 78,674 86,429 Income tax expense/(benefit) 35,567 8,039 59,467 12,031 Restructuring and impairment charges - - - 14,965 Foreign currency (gain)/loss 657 (651) 1,311 6,431 Other expense/(income), net (487) 3,459 6,671 7,562 Debt extinguishment costs - - 12,126 23,509 (Gain)/Loss on disposal of subsidiaries (2,967) 45 (2,967) 12,545 Equity in net (income) of Diamond Green Diesel (270,062) (50,124) (364,452) (159,779) Equity in net (income)/loss of unconsolidated subsidiaries (1,515) 493 (428) 550 Net income attributable to noncontrolling interests 837 1,496 8,367 4,448 Adjusted EBITDA $ 109,678 $ 108,891 $ 436,879 $ 431,379 Foreign currency exchange impact 2,149 - 16,898 - Pro forma Adjusted EBITDA to Foreign Currency (Non-GAAP) $ 111,827 $ 108,891 $ 453,777 $ 431,379 DGD Joint Venture Adjusted EBITDA (Darling's Share) $ 276,146 $ 55,268 $ 389,416 $ 174,013 Darling plus Darling's share of DGD Joint Venture Adjusted EBITDA $ 385,824 $ 164,159 $ 826,295 $ 605,392 (1) The average rate assumption used in this calculation was the actual fiscal average rate for the three months ended December 28, 2019 of €1.00:USD$1.11 and CAD$1.00:USD$0.76 as compared to the average rate for the three months ended December 29, 2018 of €1.00:USD$1.14 and CAD$1.00:USD$0.76, respectively. The average rate assumption used in this calculation was the actual fiscal average rate for the fiscal year ended December 28, 2019 of €1.00:USD$1.12 and CAD$1.00:USD$0.75 as compared to the average rate for the fiscal year ended December 29, 2018 of €1.00:USD$1.18 and CAD$1.00:USD$0.77, respectively. Page 17 | Fourth Quarter and Fiscal Year 2019 Results | 02.26.2020 Note: See slide 16 for information regarding Darling’s use of Non-GAAP measures.

 
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