IRVING, Texas, May 14, 2015 /PRNewswire/ -- Darling Ingredients
Inc. (NYSE: DAR), a global leader in converting edible and inedible
bio-nutrient streams into a wide range of ingredients and specialty
products for customers in the pharmaceutical, food, pet food, feed,
technical, fuel, bioenergy, and fertilizer industries, today
announced financial results for the first quarter ended
April 4, 2015.
For the first quarter of 2015, the Company reported net sales of
$874.7 million, as compared with net
sales of $946.3 million for the first
quarter of 2014. The $71.6 million
decrease in net sales is primarily attributable to lower finished
product prices, primarily global fat markets, and the foreign
exchange rate impact of a weaker euro and Canadian dollar.
Raw material volumes globally were stronger year over year.
Net income attributable to Darling for the three months ended
April 4, 2015, was $0.1 million, or $0.00 per diluted share, compared to a net loss
of $(52.8) million, or $(0.32) per diluted share, in the first three
months of 2014. The Company's first quarter 2015 results include 13
weeks of operations from the VION Acquisition, as compared to 12
weeks of operations from the VION Acquisition in the first quarter
of 2014. The results for the first three months of 2015 and 2014,
respectively include the following after-tax costs:
Fiscal 2015
- $2.9 million ($0.02 per diluted share) associated with
integration costs.
Fiscal 2014
- $31.3 million ($0.19 per diluted share) related to a non-cash
inventory step-up;
- $22.1 million ($0.13 per diluted share) related to retirement
costs of the Company's 8.5% Senior Notes;
- $13.8 million ($0.08 per diluted share) associated with
acquisition and integration costs;
- $8.8 million ($0.05 per diluted share) related to euro forward
contracts hedged for the closing of the VION Acquisition.
Net income and diluted earnings per share would have been
$3.0 million and $0.02 per diluted share, respectively, for the
first three months of 2015, as compared to $23.2 million and $0.13 per diluted share, respectively, for the
first three months of 2014, without the acquisition and integration
costs, noncash inventory step-up associated with the VION
Acquisition, the redemption fees and write-off of deferred loan
costs associated with the retirement of the Company's 8.5% Senior
Notes and the foreign exchange loss related to the closing of the
VION Acquisition. When comparing the first three months of fiscal
2015 to the first three months of fiscal 2014 this would have
resulted in a $(20.2) million
decrease in net income. The decrease is attributable to lower
finished product prices, lower equity income in unconsolidated
subsidiaries and the impact of foreign exchange rates as a function
of the strengthening U.S. dollar as compared mainly to the euro and
Canadian dollar, which were partially offset by an increase in raw
material volumes.
Comments on the First Quarter
"On a sequential basis, we have executed on a number of changes
to improve operating performance in light of lower grain, protein
and fat prices worldwide flowing through our business
segments. We continue to focus on margin management,
operating efficiencies and reduced administrative costs to offset
the headwinds," said Randall Stuewe,
Darling Ingredients Inc. Chairman and Chief Executive Officer.
"The Feed Ingredients Segment saw improvement in margins.
Our USA rendering business
continues to deliver as predicted while Europe and Canada are delivering near investment
case returns. Our USA
restaurant services and bakery feeds businesses continue to face
margin pressures from lower prices for fats and corn, both year
over year and sequentially. Necessary procurement and
organizational adjustments are being executed. Strong slaughter of
poultry and hogs combined with heavier market weights showed
significant increases in raw material volumes," continued Mr.
Stuewe. "Lower energy prices for natural gas and diesel in
the U.S. provided some relief to this global price re-setting
environment."
"The Food Ingredients Segment saw improved performance from the
gelatin business with significant recovery from the China markets from fourth quarter 2014. The
closure of the Russian border continues to provide significant
increases in raw materials while the oversupply continues to
pressures edible fat values. Our casings business showed
improved performance with stable volumes and pricing."
"Our Fuel Ingredients Segment delivered solid earnings with the
stability of Rendac, our disposal rendering business, and the
contribution from our Ecoson operations. Volumes moderated within
Rendac as compared to fourth quarter 2014, and we felt some margin
pressure from competing energy alternatives. The Diamond Green
Diesel (DGD) Joint Venture continued its strong operational
performance in the first quarter of 2015 producing over 37 million
gallons of renewable diesel." Mr. Stuewe added, "While
Congress has yet to act, we still anticipate the blenders tax
credit to be retroactive later this year and look forward to the
release by the EPA on the mandate levels for 2015-2017."
"Overall, our business platform is solid and continues to grow
organically with investments in five new processing facilities. We
strive to build long term investor value creating sustainable
ingredients for a growing population," concluded Mr. Stuewe.
Reconciliation of First Quarter 2015 Net Income to Adjusted
EBITDA
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). The Company believes that Adjusted EBITDA
provides additional useful information to investors. As the Company
uses the term, Adjusted EBITDA means:
|
|
Three Months Ended -
Year over Year
|
Adjusted
EBITDA
|
|
April 4,
|
|
March 29,
|
(U.S. dollars in
thousands)
|
2015
|
|
2014
|
|
|
|
|
|
Net income/(loss)
attributable to Darling
|
$
109
|
|
$
(52,803)
|
Depreciation and
amortization
|
66,398
|
|
65,669
|
Interest
expense
|
|
23,109
|
|
58,857
|
Income tax
expense/(benefit)
|
|
2,115
|
|
(18,290)
|
Foreign currency
loss
|
|
2,460
|
|
13,814
|
Other expense,
net
|
|
509
|
|
1,138
|
Equity in net
(income)/loss of unconsolidated subsidiary
|
1,808
|
|
(5,077)
|
Net income
attributable to noncontrolling interests
|
1,715
|
|
1,797
|
|
Adjusted
EBITDA
|
$
98,223
|
|
$
65,105
|
|
|
|
|
|
Non-cash inventory
step-up associated with VION Acquisition
|
−
|
|
44,831
|
Acquisition and
integration-related expenses
|
5,319
|
|
15,948
|
Darling Ingredients
International - 13th week (1)
|
−
|
|
4,100
|
|
Pro forma
Adjusted EBITDA (Non-GAAP)
|
$
103,542
|
|
$
129,984
|
|
|
|
|
|
DGD Joint Venture
Adjusted EBITDA (Darling's share) (2)
|
$
2,346
|
|
$
9,072
|
|
|
|
|
|
(1)
|
January 7,
2014 closed on VION Ingredients, thus the 13th week would be
revenue adjusted for January 1, 2014
through January 7, 2014.
|
(2)
|
Darling's pro
forma adjusted EBITDA (Non-GAAP) in the above table does not
include the DGD Joint Venture adjusted
EBITDA (Darling's share) if we had consolidated the DGD Joint
Venture.
|
|
|
For the first three months of fiscal 2015, the Company generated
Adjusted EBITDA of $98.2 million, as
compared to $65.1 million in the same
period a year ago. The increase was primarily attributable to the
reduction of nonrecurring costs incurred in the prior year as part
of the VION Acquisition. On a Pro forma Adjusted EBITDA basis, the
Company would have generated $103.5
million in the first quarter 2015, as compared to a Pro
forma Adjusted EBITDA of $130.0
million in the same period in 2014. The decrease in the Pro
forma Adjusted EBITDA is attributable to lower finished product
prices and the impact of foreign exchange rates as a function of
the strengthening U.S. dollar as compared mainly to the euro and
Canadian dollar, which were partially offset by an increase in raw
material volumes.
As a result of the strengthened U.S. dollar, the above Pro forma
Adjusted EBITDA results for the first quarter of 2015 would have
been $116.4 million when taking into
consideration the change in average foreign exchange (FX)
fluctuations of $12.9 million as
compared to the Pro forma Adjusted EBITDA of $130.0 million for the first quarter of 2014, a
reduction of $13.6 million.
Reconciliation of First Quarter 2015 Adjusted EBITDA to
Fourth Quarter 2014 Adjusted EBITDA
|
|
Three Months Ended -
Sequential
|
Adjusted
EBITDA
|
|
April 4,
|
|
January 3,
|
(U.S. dollars in
thousands)
|
2015
|
|
2015
|
|
|
|
|
|
Net income
attributable to Darling
|
$
109
|
|
$
69,943
|
Depreciation and
amortization
|
66,398
|
|
69,039
|
Interest
expense
|
|
23,109
|
|
24,633
|
Income tax
expense
|
|
2,115
|
|
4,792
|
Foreign currency
loss
|
|
2,460
|
|
1,267
|
Other
expense/(income), net
|
|
509
|
|
(269)
|
Equity in net
(income)/loss of unconsolidated subsidiary
|
1,808
|
|
(59,547)
|
Net (loss)/income
attributable to noncontrolling interests
|
1,715
|
|
(1,155)
|
|
Adjusted
EBITDA
|
$
98,223
|
|
$
108,703
|
|
|
|
|
|
Acquisition and
integration-related expenses
|
5,319
|
|
2,362
|
|
Pro forma
Adjusted EBITDA (Non-GAAP)
|
$
103,542
|
|
$
111,065
|
|
|
|
|
|
DGD Joint Venture
Adjusted EBITDA (Darling's share) (1)
|
$
2,346
|
|
$
63,757
|
|
|
|
|
|
|
(1)
|
Darling's Pro
forma Adjusted EBITDA (Non-GAAP) in the above table does not
include the DGD Joint Venture Adjusted EBITDA (Darling's share) if we had
consolidated the DGD Joint Venture.
|
On a sequential basis, for the first three months of fiscal
2015, the Company generated Adjusted EBITDA of $98.2 million, as compared to $108.7 million in the three months ended
January 3, 2015. On a Pro Forma
Adjusted EBITDA basis, the Company would have generated
$103.5 million in the first three
months of fiscal 2015, as compared to a Pro forma Adjusted EBITDA
of $111.1 million in the three months
ended January 3, 2015, a decrease of
approximately $7.6 million. The
decrease in the Pro forma Adjusted EBITDA is attributable to lower
finished product prices and the impact of foreign exchange rates as
a function of the strengthening U.S. dollar as compared mainly to
the euro and Canadian dollar.
As a result of the strengthened U.S. dollar, the above Pro forma
Adjusted EBITDA results for the first three months of fiscal 2015
would have been $110.0 million when
taking into consideration the change in average foreign currency
fluctuations of $6.5 million as
compared to the Pro forma Adjusted EBITDA of $111.1 million for the three months ended
January 3, 2015, a reduction of
$1.1 million.
Reconciliation (Non-GAAP) Adjusted Diluted Earnings Per
Share
|
|
Three Months
Ended
|
Adjusted
(Non-GAAP) Diluted Earnings Per Share
|
April 4,
|
|
March 29,
|
|
|
2015
|
|
2014
|
|
|
|
|
|
|
Weighted average
shares of common stock outstanding (millions)
|
165,146
|
|
164,386
|
|
|
|
|
|
Reported Earnings Per
Share (fully diluted)
|
$
−
|
|
$ (0.32)
|
|
Non-cash inventory
step-up associated with the VION Acquisition
|
−
|
|
0.19
|
|
Acquisition and
integration costs
|
0.02
|
|
0.08
|
|
Amortization of
intangibles
|
0.07
|
|
0.09
|
|
Redemption premium on
8.5% Senior Notes and write off deferred loan costs
|
−
|
|
0.13
|
|
Foreign currency
price risk VION Acquisition
|
−
|
|
0.05
|
Adjusted diluted
earnings per share attributable to Darling (Non-GAAP)
(1)
|
$
0.09
|
|
$ 0.22
|
|
|
(1)
|
Adjustments to
diluted earnings per share of acquisition related items are net of
tax. Calculations of all adjustment tax amounts were at the
applicable effective tax rate for the period, except for discrete
items in fiscal 2015 and fiscal 2014. The effective tax rate used
for calculating Non-GAAP Adjusted EPS in the above table for the
quarter ended April 4, 2015 and March 29, 2014 was 45.9% and 30.3%,
respectively.
|
First Quarter Segment Performance
Feed
Ingredients
|
|
|
($
thousands)
|
April 4,
2015
|
March 29,
2014
|
Net Sales
|
$ 547,498
|
$
586,107
|
|
|
|
|
Operating
Income
|
35,414
|
37,533
|
Operating Income
Bridge Adjustments:
|
|
|
|
Non-cash Inventory
Adjustment
|
-
|
12,700
|
|
Adjusted Operating
Income
|
$ 35,414
|
$
50,233
|
|
FX Translation
Impact
|
4,600
|
-
|
|
Adjusted Operating
Income / FX
|
$ 40,014
|
$
50,233
|
- Feed Ingredients operating income for the first three months of
fiscal 2015 was $35.4 million, a
decrease of $2.1 million as compared
to the first three months of fiscal 2014. Adjusting the first three
months of fiscal 2014 for the non-cash inventory step-up associated
with the VION Acquisition of approximately $12.7 million and comparing to the first three
months of fiscal 2015, operating income was lower by $14.8 million. In addition, Feed Ingredients was
negatively impacted by foreign exchange translation by
approximately $4.6 million when using
prior year average exchange rates.
- Lower earnings in the United
States operations were predominantly related to lower
finished product prices, particularly for fats in the Company's
non-formula business and Bakery Feeds. The $38.6 million decrease in sales were due to
decreases in sales of fats $(18.8)
million, proteins $(13.2)
million, Bakery Feeds $(0.4)
and other sales of $(6.2)
million.
Food
Ingredients
|
|
|
($
thousands)
|
April 4,
2015
|
March 29,
2014
|
Net Sales
|
$ 270,157
|
$
293,462
|
|
|
|
|
Operating
Income/(Loss)
|
$ 10,847
|
$
(12,142)
|
Operating Income
Bridge Adjustments:
|
|
|
|
Non-cash Inventory
Adjustment
|
-
|
31,900
|
|
Adjusted Operating
Income
|
$ 10,847
|
$
19,758
|
|
FX Translation
Impact
|
6,900
|
-
|
|
Adjusted Operating
Income / FX
|
$ 17,747
|
$
19,758
|
- Food Ingredients operating income was $10.8 million for the first three months of 2015,
an increase of $22.9 million as
compared to the first three months of fiscal 2014. Adjusting the
first three months of fiscal 2014 for the non-cash inventory
step-up associated with the VION Acquisition of approximately
$31.9 million and comparing this to
the first three months of fiscal 2015, the Food Ingredients
operating income for the first three months of fiscal 2015 is lower
by $9.0 million. In addition, Food
Ingredients was negatively impacted by foreign exchange translation
by approximately $6.9 million when
using prior year average exchange rates.
- The gelatin business performed well as compared to the prior
year as a result of increased demand in China and lower raw material prices in other
regions. The European edible fats operating income was down
compared to the prior year due to the continued closure of the
Russian trade border although volumes were up. The Company's
casings business improved slightly from the prior year ago
period.
Fuel
Ingredients
|
|
|
($
thousands)
|
April 4,
2015
|
March 29,
2014
|
Net Sales
|
$ 57,039
|
$
66,723
|
|
|
|
|
Operating
Income
|
$
2,494
|
$
2,345
|
Operating Income
Bridge Adjustments:
|
|
|
|
Non-cash Inventory
Adjustment
|
-
|
200
|
|
Adjusted Operating
Income
|
$
2,494
|
$
2,545
|
|
FX Translation
Impact
|
2,400
|
-
|
|
Adjusted Operating
Income / FX
|
$
4,894
|
$
2,545
|
- Exclusive of the DGD Joint Venture, Fuel Ingredients
operating income for the first three months of fiscal 2015 was
$2.5 million, an increase of
$0.2 million as compared to the first
three months of fiscal 2014. Adjusting the first three months of
fiscal 2014 for the non-cash inventory step-up adjustment of
$0.2 million and comparing this to
the first three months of fiscal 2015, the operating income is the
same. The Fuel Ingredients segment was negatively impacted by
foreign exchange translation by $2.4
million when using prior year average exchange rates.
- The DGD Joint Venture segment income for the first three months
of fiscal 2015 was a loss of $(2.2)
million, as compared to a profit of $4.7 million in the same period of 2014. The DGD
Joint Venture was negatively impacted by lower RIN values resulting
from an uncertain regulatory environment with respect to the U.S.
RVO requirements for 2015.
- Volumes and demand for our Rendac and Ecoson operations in
Europe were steady for the first
three months of fiscal 2015.
About Darling
Darling Ingredients Inc. is the world's largest publicly-traded
developer and producer of sustainable natural ingredients from
edible and inedible bio-nutrients, creating a wide range of
ingredients and specialty products 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 broadly used and specialty
ingredients, such as gelatin, 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
used cooking oil and commercial bakery residuals into valuable feed
and fuel ingredients. In addition, the Company provides
grease trap services to food service establishments, environmental
services to food processors and sells restaurant cooking oil
delivery and collection equipment. For additional information,
visit the Company's website at http://ir.darlingii.com.
Darling Ingredients Inc. will host a conference call to discuss
the Company's first quarter 2015 financial results at 8:00
am Eastern Time (7:00 am Central
Time) on Friday, May 15,
2015. To listen to the conference call, participants calling
from within North America should
dial 866-777-2509; international participants should dial
412-317-5413. Please refer to access code
10065384. 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 May 22, 2015, by
dialing 877-344-7529 (U.S. callers), 855-669-9658 (Canada) and 412-317-0088 (international
callers). The access code for the replay is
10065384. The conference call will also be archived on
the Company's website.
Use of Non-GAAP Financial Measures:
Adjusted EBITDA is presented here not as an alternative to net
income, but rather as a measure of the Company's operating
performance and is not intended to be a presentation in accordance
with GAAP. 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 used Adjusted EBITDA as a
measure to evaluate performance and for other discretionary
purposes. However, Adjusted EBITDA is not a recognized measurement
under GAAP, should not be considered as an alternative to net
income as a measure of operating results or to cash flow as a
measure of liquidity, and is not intended to be a presentation in
accordance with GAAP. 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 5.375% Notes that were outstanding at April 4, 2015. 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 5.375% Notes, as those definitions permit
further adjustments to reflect certain other non-recurring costs
and non-cash charges.
In addition, the Company's management used adjusted diluted
earnings per share as a measure of earnings due to the significant
merger and acquisition activity of the Company. However, an
adjusted earnings per share is not a recognized measurement under
GAAP and should not be considered as an alternative to diluted
earnings per share presented in accordance with GAAP. Adjusted
diluted earnings per share is defined as adjusted net income
attributable to Darling divided by the weighted average shares of
diluted common stock. Adjusted net income attributable to Darling
is defined as a reconciliation of net income attributable to
Darling, net of tax (i) adjusted for net of tax acquisition and
integration costs related to merger and acquisitions, (ii) net of
tax amortization of acquisition related intangibles and (iii) net
of tax certain non-recurring items that are not part of normal
operations. This measure is solely for the purpose of calculating
adjusted diluted earnings per share and is not intended to be a
substitute of presentation in accordance with GAAP.
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; unanticipated costs or operating problems related to the
acquisition and integration of Rothsay and Darling Ingredients
International (including transactional costs and integration of the
new enterprise resource planning (ERP) system); 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, reduced demand for animal feed, or otherwise;
reduced finished product prices; continued decline in fat and used
cooking oil finished product prices; changes to worldwide
government policies relating to renewable fuels and greenhouse gas
emissions that adversely affect programs like the Renewable Fuel
Standards Program (RFS2) 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 Bird Flu
including, but not limited to H5N1 flu, bovine spongiform
encephalopathy (or "BSE"), porcine epidemic diarrhea ("PED") or
other diseases associated with animal origin in the United States or elsewhere; 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 regulations (including, without limitation, China) affecting the industries in which the
Company operates or its value added products (including new or
modified animal feed, Bird Flu, PED or BSE or similar or
unanticipated regulations); risks associated with the renewable
diesel plant in Norco, Louisiana
owned and operated by a joint venture between Darling Ingredients
and Valero Energy Corporation, including possible unanticipated
operating disruptions; 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; 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. 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:
Melissa A. Gaither,
Director of Investor Relations
|
Email:
mgaither@darlingii.com
|
251 O'Connor Ridge
Blvd., Suite 300
|
Phone:
972-717-0300
|
Irving, Texas
75038
|
|
|
Darling
Ingredients Inc.
Condensed
Consolidated Balance Sheets
April 4, 2015 and
January 3, 2015
(Dollars in
thousands)
|
|
|
|
April 4,
|
|
January 3,
|
|
2015
|
|
2015
|
|
|
(unaudited)
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
$ 112,131
|
|
$ 108,784
|
|
Restricted
cash
|
353
|
|
343
|
|
Accounts Receivable,
net
|
376,968
|
|
409,779
|
|
Inventories
|
398,179
|
|
401,613
|
|
Prepaid
expenses
|
54,848
|
|
44,629
|
|
Income taxes
refundable
|
25,531
|
|
22,140
|
|
Other current
assets
|
30,642
|
|
21,324
|
|
Deferred income
taxes
|
45,139
|
|
45,001
|
|
Total current assets
|
1,043,791
|
|
1,053,613
|
Property, plant and
equipment,
|
|
|
|
|
less accumulated
depreciation, net
|
1,507,625
|
|
1,574,116
|
Intangible
assets,
|
|
|
|
|
less accumulated
amortization, net
|
869,800
|
|
932,413
|
|
|
|
|
|
Other
assets:
|
|
|
|
|
Goodwill
|
1,255,105
|
|
1,320,419
|
|
Investment in
unconsolidated subsidiaries
|
198,639
|
|
202,712
|
|
Other
assets
|
67,023
|
|
71,009
|
|
Deferred income
taxes
|
15,832
|
|
16,431
|
|
Total assets
|
$ 4,957,815
|
|
$ 5,170,713
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Current portion of
long-term debt
|
$ 81,195
|
|
$ 54,401
|
|
|
Accounts payable,
principally trade
|
161,853
|
|
168,518
|
|
|
Income taxes
payable
|
6,138
|
|
4,363
|
|
|
Accrued
expenses
|
224,845
|
|
256,119
|
|
|
Deferred income
taxes
|
1,540
|
|
642
|
|
|
Total current liabilities
|
475,571
|
|
484,043
|
|
|
|
|
|
|
|
Long-term debt, net
of current portion
|
2,009,535
|
|
2,098,039
|
|
Other non-current
liabilities
|
112,354
|
|
114,700
|
|
Deferred income
taxes
|
402,414
|
|
422,797
|
|
|
Total liabilities
|
2,999,874
|
|
3,119,579
|
|
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
Total Darling's
stockholders' equity:
|
1,852,794
|
|
1,952,990
|
|
|
Noncontrolling
interests
|
105,147
|
|
98,144
|
|
|
Total stockholders' equity
|
$1,957,941
|
|
$2,051,134
|
|
|
|
$4,957,815
|
|
$5,170,713
|
|
|
|
|
|
|
|
|
Darling
Ingredients Inc.
Consolidated
Operating Results
For the Periods
Ended April 4, 2015 and March 29, 2014
(Dollars in
thousands, except per share data)
(unaudited)
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
$ Change
|
|
|
April 4,
|
|
March 29,
|
|
Favorable
|
|
2015
|
|
2014
|
|
(Unfavorable)
|
Net sales
|
|
$874,694
|
|
$946,292
|
|
$ (71,598)
|
Costs and
expenses:
|
|
|
|
|
|
|
Cost of sales and
operating expenses
|
$684,521
|
|
$775,206
|
|
90,685
|
|
Selling, general
and
administrative expenses
|
86,631
|
|
90,033
|
|
3,402
|
|
Depreciation and
amortization
|
66,398
|
|
65,669
|
|
(729)
|
|
Acquisition and
Integration costs
|
5,319
|
|
15,948
|
|
10,629
|
Total costs and
expenses
|
842,869
|
|
946,856
|
|
103,987
|
Operating
income/(loss)
|
31,825
|
|
(564)
|
|
32,389
|
|
|
|
|
|
|
|
Other
expense:
|
|
|
|
|
|
|
Interest
expense
|
(23,109)
|
|
(58,857)
|
|
35,748
|
|
Foreign currency
loss
|
(2,460)
|
|
(13,814)
|
|
11,354
|
|
Other
income/(expense), net
|
(509)
|
|
(1,138)
|
|
629
|
Total other
expense
|
(26,078)
|
|
(73,809)
|
|
47,731
|
|
|
|
|
|
|
|
Equity in net
income/(loss) of unconsolidated subsidiary
|
(1,808)
|
|
5,077
|
|
(6,885)
|
Income/(loss) before
income taxes
|
3,939
|
|
(69,296)
|
|
73,235
|
Income taxes
expense/(benefit)
|
2,115
|
|
(18,290)
|
|
(20,405)
|
Net
income/(loss)
|
$ 1,824
|
|
$ (51,006)
|
|
$ 52,830
|
Net (income)/loss
attributable to noncontrolling interests
|
$ (1,715)
|
|
$ (1,797)
|
|
$
82
|
Net income/(loss)
attributable to Darling
|
$ 109
|
|
$ (52,803)
|
|
$ 52,912
|
|
|
|
|
|
|
|
Basic income/(loss)
per share
|
$
-
|
|
$ (0.32)
|
|
$
0.32
|
Diluted income/(loss)
per share
|
$
-
|
|
$ (0.32)
|
|
$
0.32
|
|
|
|
|
|
|
|
|
Darling
Ingredients Inc.
Consolidated
Statement of Cash Flows
For the Periods
Ended April 4, 2015 and March 29, 2014
(Dollars in
thousands)
(unaudited)
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
April 4,
|
|
March 29,
|
|
Cash flows from
operating activities:
|
2015
|
|
2014
|
|
|
Net
income/(loss)
|
|
$
1,824
|
|
$
(51,006)
|
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
|
Depreciation and
amortization
|
66,398
|
|
65,669
|
|
|
|
Loss/(gain) on
disposal of property, plant, equipment and other assets
|
47
|
|
(916)
|
|
|
|
Gain on insurance
proceeds from insurance settlements
|
(341)
|
|
−
|
|
|
|
Deferred
taxes
|
503
|
|
(9,499)
|
|
|
|
Increase/(decrease)
in long-term pension liability
|
261
|
|
(688)
|
|
|
|
Stock-based
compensation expense
|
1,282
|
|
8,459
|
|
|
|
Write-off deferred
loan costs
|
−
|
|
4,330
|
|
|
|
Deferred loan cost
amortization
|
2,409
|
|
2,452
|
|
|
|
Equity in net
(income)/loss of unconsolidated subsidiaries
|
1,808
|
|
(5,077)
|
|
|
|
Changes in operating
assets and liabilities, net of effects from
acquisitions:
|
|
|
|
|
|
|
Accounts
receivable
|
12,269
|
|
7,018
|
|
|
|
Income taxes
refundable/payable
|
(1,857)
|
|
(11,739)
|
|
|
|
Inventories
and prepaid expenses
|
(26,511)
|
|
16,700
|
|
|
|
Accounts
payable and accrued expenses
|
(19,985)
|
|
(63,824)
|
|
|
|
Other
|
|
21,133
|
|
7,671
|
|
|
|
|
Net cash
provided/(used) by operating activities
|
59,240
|
|
(30,504)
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
Capital
expenditures
|
|
(50,838)
|
|
(51,360)
|
|
|
Acquisitions, net of
cash acquired
|
−
|
|
(2,081,690)
|
|
|
Gross proceeds from
disposal of property, plant and equipment and other
assets
|
534
|
|
1,324
|
|
|
Proceeds from
insurance settlement
|
341
|
|
−
|
|
|
Payments related to
routes and other intangibles
|
(753)
|
|
(6,812)
|
|
|
|
|
Net cash used by
investing activities
|
(50,716)
|
|
(2,138,538)
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
Proceeds from
long-term debt
|
5,943
|
|
1,797,509
|
|
|
Payments on long-term
debt
|
(13,602)
|
|
(263,971)
|
|
|
Borrowings from
revolving credit facility
|
27,428
|
|
223,310
|
|
|
Payments on revolving
credit facility
|
(37,943)
|
|
(273,474)
|
|
|
Net cash overdraft
financing
|
31,162
|
|
−
|
|
|
Deferred loan
costs
|
|
−
|
|
(38,786)
|
|
|
Issuance of commons
stock
|
81
|
|
2,504
|
|
|
Minimum withholding
taxes paid on stock awards
|
(4,469)
|
|
(4,709)
|
|
|
Excess tax benefits
from stock-based compensation
|
(35)
|
|
960
|
|
|
Distributions to
noncontrolling interests
|
(38)
|
|
−
|
|
|
|
|
Net cash provided by
financing activities
|
8,527
|
|
1,443,343
|
|
Effect of exchange
rate changes on cash
|
(13,704)
|
|
(1,736)
|
|
Net
increase/(decrease) in cash and cash equivalents
|
3,347
|
|
(727,435)
|
|
Cash and cash
equivalents at beginning of period
|
108,784
|
|
870,857
|
|
Cash and cash
equivalents at end of period
|
$
112,131
|
|
$
143,422
|
|
Supplemental
disclosure of cash flow information:
|
|
|
|
|
|
Accrued capital
expenditures
|
$
2,164
|
|
$
1,437
|
|
Cash paid during the
period for:
|
|
|
|
|
|
Interest, net of
capitalized interest
|
$
26,118
|
|
$
35,472
|
|
|
Income taxes, net of
refunds
|
$
5,149
|
|
$
5,466
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/darling-ingredients-inc-reports-first-quarter-2015-financial-results-300083807.html
SOURCE Darling Ingredients Inc.