Fiscal Year 2022 Highlights
- Generated net income of $737.7
million, or $4.49 per GAAP
diluted share
- Delivered record combined adjusted EBITDA of $1.541 billion
- Started up third renewable diesel plant, making Diamond Green Diesel North America's largest
renewable diesel producer at 1.2 billion gallons a year
- Grew global footprint with three strategic acquisitions,
strengthening company's vertical integration for renewable diesel
production
- Record Food Segment results driven by growth of hydrolyzed
collagen business
- Repurchased $125.5 million of
common stock
IRVING,
Texas, Feb. 27, 2023 /PRNewswire/ -- Darling
Ingredients Inc. (NYSE: DAR) today reported net income of
$156.6 million, or $0.96 per diluted share for fourth quarter 2022,
compared to net income of $155.8
million, or $0.94 per diluted
share, for fourth quarter 2021. The company also reported net sales
of $1.8 billion for the fourth
quarter of 2022, as compared with net sales of $1.3 billion for the same period a year ago.
For the 2022 fiscal year, Darling Ingredients reported net
income of $737.7 million, or
$4.49 per diluted share, as compared
to $650.9 million, or $3.90 per diluted share for 2021. Net sales for
fiscal year 2022 were $6.5 billion,
as compared with net sales of $4.7
billion in 2021.
Combined adjusted EBITDA for the fourth quarter 2022 was
$413.0 million, compared to
$306.8 million for the same period in
2021. Fiscal year 2022 combined adjusted EBITDA was $1.541 billion, compared to $1.235 billion for full year 2021.
Diamond Green Diesel (DGD) sold a record 754 million gallons of
renewable diesel for fiscal year 2022, at an average $1.18 EBITDA per gallon. DGD began operations at
its Port Arthur, Texas, plant in
the fourth quarter of 2022, bringing DGD's total renewable diesel
capacity to 1.2 billion gallons per year. On Jan. 31, 2023, the company announced approval of
a new sustainable aviation fuel project at Port Arthur, Texas.
"For the fifth consecutive year, Darling Ingredients has
delivered superior earnings growth driven by our market presence,
vertical integration and diverse, but synergistic segments," said
Randall C. Stuewe, Darling
Ingredients Chairman and Chief Executive Officer. "We are well
positioned to execute and integrate the investments we have made in
our four growth areas: the core rendering business, collagen
peptides, green energy in Europe
and soon sustainable aviation fuel at Diamond Green Diesel. Our
value proposition is simple, we eliminate waste from the meat
industry and upcycle those products to their highest value. Darling
is not just participating in the circular economy, we are the
circular economy."
These acquisitions are key to our vertical integration, company
strength and strong market position.
The company's significant business highlights in 2022
include:
- Acquired Op de Beeck, a leading
organic waste processing company in Belgium, growing the company's European green
energy business;
- Acquired Valley Proteins, strengthening the core business by
adding 18 rendering plants in the southern, southeast and
mid-Atlantic regions in the U.S.;
- Entered into the rendering business in Brazil with the acquisition of FASA Group,
adding 14 plants and 1.3 million metric tons of processing;
- Started up DGD Port Arthur,
Texas, plant, bringing the joint venture's renewable diesel
production to 1.2 billion gallons per year;
- Entered into a definitive agreement to purchase Gelnex in
Brazil to grow the company's food
business through increased collagen production;
- Entered into a definitive agreement to purchase Miropasz,
providing the company with access to additional poultry rendering
in Poland, Europe's largest poultry provider; and
- Signed onto the Science-Based Target initiative, continuing to
set a high level for sustainability and advancing the company's
2050 net-zero goal.
Under the company's share repurchase program, the company
repurchased approximately 336,000 shares of common stock during the
fourth quarter of 2022 for a total of approximately $22.5 million, bringing the total common stock
repurchased for 2022 to approximately 1.9 million shares for a
total of approximately $125.5
million.
As of Dec. 31, 2022, Darling
Ingredients had $127.0 million in
cash and cash equivalents, and $1.3
billion available under its committed revolving credit
agreement. Total debt outstanding as of Dec.
31, 2022, was $3.4 billion.
The leverage ratio as measured by the company's bank covenant was
2.54X as of Dec. 31, 2022. Capital
expenditures were $134.1 million for
the fourth quarter and $391.3 million
for fiscal year 2022.
The company expects continued growth, and sets guidance for
fiscal year 2023 at $1.80-$1.85 billion
combined adjusted EBITDA.
Segment Financial
Tables (in thousands)
|
|
|
|
|
|
|
|
Feed
Ingredients
|
Food
Ingredients
|
Fuel
Ingredients
|
Corporate
|
Total
|
Three Months Ended
December 31, 2022
|
|
|
|
|
|
Net sales
|
$
1,216,073
|
$
387,733
|
$
164,277
|
$
-
|
$
1,768,083
|
Cost of sales and
operating expenses
|
950,778
|
294,417
|
134,093
|
-
|
1,379,288
|
Gross Margin
|
265,295
|
93,316
|
30,184
|
-
|
388,795
|
|
|
|
|
|
|
Loss (gain) on sale of
assets
|
169
|
(117)
|
14
|
-
|
66
|
Selling, general and
administrative expenses
|
73,736
|
28,073
|
3,769
|
16,142
|
121,720
|
Restructuring and asset
impairment charges
|
-
|
21,109
|
-
|
-
|
21,109
|
Acquisition and
integration costs
|
-
|
-
|
-
|
2,738
|
2,738
|
Depreciation and
amortization
|
91,282
|
14,722
|
8,606
|
2,774
|
117,384
|
Equity in net income of
Diamond Green Diesel
|
-
|
-
|
123,448
|
-
|
123,448
|
Segment operating
income/(loss)
|
$
100,108
|
$
29,529
|
$
141,243
|
$
(21,654)
|
$
249,226
|
Equity in net loss of
other unconsolidated subsidiaries
|
(831)
|
-
|
-
|
-
|
(831)
|
Segment
income/(loss)
|
$
99,277
|
$
29,529
|
$
141,243
|
$
(21,654)
|
$
248,395
|
|
|
|
|
|
|
Segment
EBITDA
|
$
191,390
|
$
65,360
|
$
26,401
|
$
(16,142)
|
$
267,009
|
DGD adjusted EBITDA
(Darling's Share)
|
-
|
-
|
145,984
|
-
|
145,984
|
Combined adjusted
EBITDA
|
$
191,390
|
$
65,360
|
$
172,385
|
$
(16,142)
|
$
412,993
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Feed
Ingredients
|
Food
Ingredients
|
Fuel
Ingredients
|
Corporate
|
Total
|
Three Months Ended
January 1, 2022
|
|
|
|
|
|
Net sales
|
$
846,498
|
$
344,677
|
$
118,893
|
$
-
|
$
1,310,068
|
Cost of sales and
operating expenses
|
621,581
|
272,972
|
94,371
|
-
|
988,924
|
Gross Margin
|
224,917
|
71,705
|
24,522
|
-
|
321,144
|
|
|
|
|
|
|
Gain on sale of
assets
|
(60)
|
(87)
|
(18)
|
-
|
(165)
|
Selling, general and
administrative expenses
|
57,484
|
22,405
|
3,177
|
14,667
|
97,733
|
Acquisition and
integration costs
|
-
|
-
|
-
|
1,396
|
1,396
|
Depreciation and
amortization
|
56,538
|
15,263
|
6,222
|
2,782
|
80,805
|
Equity in net income of
Diamond Green Diesel
|
-
|
-
|
69,663
|
-
|
69,663
|
Segment operating
income/(loss)
|
$
110,955
|
$
34,124
|
$
84,804
|
$
(18,845)
|
$
211,038
|
Equity in net income of
other unconsolidated subsidiaries
|
1,554
|
-
|
-
|
-
|
1,554
|
Segment
income/(loss)
|
$
112,509
|
$
34,124
|
$
84,804
|
$
(18,845)
|
$
212,592
|
|
|
|
|
|
|
Segment
EBITDA
|
$
167,493
|
$
49,387
|
$
21,363
|
$
(14,667)
|
$
223,576
|
DGD adjusted EBITDA
(Darling's Share)
|
-
|
-
|
83,192
|
-
|
83,192
|
Combined adjusted
EBITDA
|
$
167,493
|
$
49,387
|
$
104,555
|
$
(14,667)
|
$
306,768
|
Segment EBITDA consists of segment income (loss), less equity in
net income/loss from unconsolidated subsidiaries, less equity in
net income of Diamond Green Diesel, plus depreciation and
amortization, plus acquisition and integration costs, plus
restructuring and asset impairment charges, plus Darling's share of
DGD Adjusted EBITDA.
Segment Financial
Tables (in thousands) continued
|
|
|
|
|
|
|
|
Feed
Ingredients
|
Food
Ingredients
|
Fuel
Ingredients
|
Corporate
|
Total
|
Twelve Months Ended
December 31, 2022
|
|
|
|
|
|
Net sales
|
$
4,539,000
|
$
1,459,630
|
$
533,574
|
$
-
|
$
6,532,204
|
Cost of sales and
operating expenses
|
3,473,506
|
1,102,250
|
426,853
|
-
|
5,002,609
|
Gross Margin
|
1,065,494
|
357,380
|
106,721
|
-
|
1,529,595
|
|
|
|
|
|
|
Gain on sale of
assets
|
(3,426)
|
(1,008)
|
(60)
|
-
|
(4,494)
|
Selling, general and
administrative expenses
|
258,781
|
101,681
|
13,690
|
62,456
|
436,608
|
Restructuring and asset
impairment charges
|
8,557
|
21,109
|
-
|
-
|
29,666
|
Acquisition and
integration costs
|
-
|
-
|
-
|
16,372
|
16,372
|
Depreciation and
amortization
|
295,249
|
59,029
|
29,500
|
10,943
|
394,721
|
Equity in net income of
Diamond Green Diesel
|
-
|
-
|
372,346
|
-
|
372,346
|
Segment operating
income/(loss)
|
$
506,333
|
$
176,569
|
$
435,937
|
$
(89,771)
|
$
1,029,068
|
Equity in net income of
other unconsolidated subsidiaries
|
5,102
|
-
|
-
|
-
|
5,102
|
Segment
income/(loss)
|
$
511,435
|
$
176,569
|
$
435,937
|
$
(89,771)
|
$
1,034,170
|
|
|
|
|
|
|
Segment
EBITDA
|
$
810,139
|
$
256,707
|
$
93,091
|
$
(62,456)
|
$
1,097,481
|
DGD adjusted EBITDA
(Darling's Share)
|
-
|
-
|
443,487
|
-
|
443,487
|
Combined adjusted
EBITDA
|
$
810,139
|
$
256,707
|
$
536,578
|
$
(62,456)
|
$
1,540,968
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Feed
Ingredients
|
Food
Ingredients
|
Fuel
Ingredients
|
Corporate
|
Total
|
Twelve Months Ended
January 1, 2022
|
|
|
|
|
|
Net sales
|
$
3,039,500
|
$
1,271,629
|
$
430,240
|
$
-
|
$
4,741,369
|
Cost of sales and
operating expenses
|
2,206,248
|
979,232
|
313,905
|
-
|
3,499,385
|
Gross Margin
|
833,252
|
292,397
|
116,335
|
-
|
1,241,984
|
|
|
|
|
|
|
Gain on sale of
assets
|
(550)
|
(88)
|
(320)
|
-
|
(958)
|
Selling, general and
administrative expenses
|
220,078
|
97,555
|
16,999
|
56,906
|
391,538
|
Restructuring and asset
impairment charges
|
-
|
-
|
778
|
-
|
778
|
Acquisition and
integration costs
|
-
|
-
|
-
|
1,396
|
1,396
|
Depreciation and
amortization
|
218,942
|
60,929
|
25,436
|
11,080
|
316,387
|
Equity in net income of
Diamond Green Diesel
|
-
|
-
|
351,627
|
-
|
351,627
|
Segment operating
income/(loss)
|
$
394,782
|
$
134,001
|
$
425,069
|
$
(69,382)
|
$
884,470
|
Equity in net income of
other unconsolidated subsidiaries
|
5,753
|
-
|
-
|
-
|
5,753
|
Segment
income/(loss)
|
$
400,535
|
$
134,001
|
$
425,069
|
$
(69,382)
|
$
890,223
|
|
|
|
|
|
|
Segment
EBITDA
|
$
613,724
|
$
194,930
|
$
99,656
|
$
(56,906)
|
$
851,404
|
DGD adjusted EBITDA
(Darling's Share)
|
-
|
-
|
383,419
|
-
|
383,419
|
Combined adjusted
EBITDA
|
$
613,724
|
$
194,930
|
$
483,075
|
$
(56,906)
|
$
1,234,823
|
Segment EBITDA consists of segment income (loss), less equity in
net income from unconsolidated subsidiaries, less equity in net
income of Diamond Green Diesel, plus depreciation and amortization,
plus acquisition and integration costs, plus restructuring and
asset impairment charges, plus Darling's share of DGD Adjusted
EBITDA.
Darling Ingredients
Inc. and Subsidiaries
|
Consolidated Balance
Sheets
|
December 31, 2022
and January 1, 2022
|
(thousands)
|
|
|
|
December 31,
2022
|
January 1,
2022
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
|
$
127,016
|
$
68,906
|
Restricted
cash
|
|
315
|
166
|
Accounts receivable,
net
|
|
676,573
|
469,092
|
Inventories
|
|
673,621
|
457,465
|
Prepaid
expenses
|
|
85,665
|
53,711
|
Income taxes
refundable
|
|
18,583
|
1,075
|
Other current
assets
|
|
56,324
|
38,599
|
Total current
assets
|
|
1,638,097
|
1,089,014
|
|
|
|
|
Property, plant and
equipment, net
|
|
2,462,082
|
1,840,080
|
Intangible assets,
net
|
|
865,122
|
397,801
|
Goodwill
|
|
1,970,377
|
1,219,116
|
Investment in
unconsolidated subsidiaries
|
|
1,926,395
|
1,349,247
|
Operating lease
right-of-use assets
|
|
186,141
|
155,464
|
Other assets
|
|
136,268
|
66,795
|
Deferred income
taxes
|
|
17,888
|
16,211
|
|
|
$
9,202,370
|
$
6,133,728
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Current portion of
long-term debt
|
|
$
69,846
|
$
24,407
|
Accounts payable,
principally trade
|
|
472,491
|
307,118
|
Income taxes
payable
|
|
44,851
|
32,310
|
Current operating lease
liabilities
|
|
49,232
|
38,168
|
Accrued
Expenses
|
|
432,023
|
350,681
|
Total current
liabilities
|
|
1,068,443
|
752,684
|
Long-term debt, net of
current portion
|
|
3,314,969
|
1,438,974
|
Long-term operating
lease liabilities
|
|
141,703
|
120,314
|
Other non-current
liabilities
|
|
298,933
|
111,029
|
Deferred income
taxes
|
|
481,832
|
362,942
|
Total
liabilities
|
|
5,305,880
|
2,785,943
|
Commitments and
contingencies
|
|
|
|
Stockholders'
equity:
|
|
|
|
Common stock, $0.01 par
value;
|
|
1,736
|
1,717
|
Additional paid-in
capital
|
|
1,660,084
|
1,627,816
|
Treasury stock, at
cost
|
|
(554,451)
|
(374,721)
|
Accumulated other
comprehensive loss
|
|
(383,874)
|
(321,690)
|
Retained
earnings
|
|
3,085,528
|
2,347,838
|
Total Darling's
stockholders' equity
|
|
3,809,023
|
3,280,960
|
Noncontrolling
interests
|
|
87,467
|
66,825
|
Total Stockholders'
Equity
|
|
3,896,490
|
3,347,785
|
|
|
$
9,202,370
|
$
6,133,728
|
|
Darling Ingredients
Inc. and Subsidiaries
|
|
Consolidated
Operating Results
|
|
For the Three-Month
and Twelve-Month Periods Ended December 31, 2022 and January
1, 2022
|
|
(in thousands, except
per share data)
|
|
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
|
|
|
$ Change
|
|
|
|
$ Change
|
|
|
December 31,
|
|
January 1,
|
|
Favorable
|
|
December 31,
|
|
January 1,
|
|
Favorable
|
|
|
2022
|
|
2022
|
|
(Unfavorable)
|
|
2022
|
|
2022
|
|
(Unfavorable)
|
Net sales
|
$
1,768,083
|
|
$
1,310,068
|
|
$
458,015
|
|
$
6,532,204
|
|
$
4,741,369
|
|
$
1,790,835
|
Costs and
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales and
operating expenses
|
1,379,288
|
|
988,924
|
|
(390,364)
|
|
5,002,609
|
|
3,499,385
|
|
(1,503,224)
|
|
(Gain) loss on sale of
assets
|
66
|
|
(165)
|
|
(231)
|
|
(4,494)
|
|
(958)
|
|
3,536
|
|
Selling, general and
administrative expenses
|
121,720
|
|
97,733
|
|
(23,987)
|
|
436,608
|
|
391,538
|
|
(45,070)
|
|
Restructuring and asset
impairment charges
|
21,109
|
|
-
|
|
(21,109)
|
|
29,666
|
|
778
|
|
(28,888)
|
|
Acquisition and
integration costs
|
2,738
|
|
1,396
|
|
(1,342)
|
|
16,372
|
|
1,396
|
|
(14,976)
|
|
Depreciation and
amortization
|
117,384
|
|
80,805
|
|
(36,579)
|
|
394,721
|
|
316,387
|
|
(78,334)
|
Total costs and
expenses
|
1,642,305
|
|
1,168,693
|
|
(473,612)
|
|
5,875,482
|
|
4,208,526
|
|
(1,666,956)
|
|
Equity in net income of
Diamond Green Diesel
|
123,448
|
|
69,663
|
|
53,785
|
|
372,346
|
|
351,627
|
|
20,719
|
Operating
income
|
249,226
|
|
211,038
|
|
38,188
|
|
1,029,068
|
|
884,470
|
|
144,598
|
Other
expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
(46,139)
|
|
(14,972)
|
|
(31,167)
|
|
(125,566)
|
|
(62,077)
|
|
(63,489)
|
|
Foreign currency
losses
|
(5,272)
|
|
(900)
|
|
(4,372)
|
|
(11,277)
|
|
(2,199)
|
|
(9,078)
|
|
Other income (expense),
net
|
242
|
|
(1,341)
|
|
1,583
|
|
(3,609)
|
|
(4,551)
|
|
942
|
Total other
expense
|
(51,169)
|
|
(17,213)
|
|
(33,956)
|
|
(140,452)
|
|
(68,827)
|
|
(71,625)
|
Equity in net income
(loss)
|
|
|
|
|
|
|
|
|
|
|
|
of
other unconsolidated subsidiaries
|
(831)
|
|
1,554
|
|
(2,385)
|
|
5,102
|
|
5,753
|
|
(651)
|
Income from operations
before income taxes
|
197,226
|
|
195,379
|
|
1,847
|
|
893,718
|
|
821,396
|
|
72,322
|
Income tax
expense
|
37,995
|
|
37,782
|
|
(213)
|
|
146,626
|
|
164,106
|
|
17,480
|
Net income
|
159,231
|
|
157,597
|
|
1,634
|
|
747,092
|
|
657,290
|
|
89,802
|
Net income attributable
to
|
|
|
|
|
|
|
|
|
|
|
|
|
noncontrolling
interests
|
(2,671)
|
|
(1,843)
|
|
(828)
|
|
(9,402)
|
|
(6,376)
|
|
(3,026)
|
Net income attributable
to Darling
|
$
156,560
|
|
$
155,754
|
|
$
806
|
|
$
737,690
|
|
$
650,914
|
|
$
86,776
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic income per
share:
|
$
0.98
|
|
$
0.96
|
|
$
0.02
|
|
$
4.58
|
|
$
4.01
|
|
$
0.57
|
Diluted income per
share:
|
$
0.96
|
|
$
0.94
|
|
$
0.02
|
|
$
4.49
|
|
$
3.90
|
|
$
0.59
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of diluted
common shares:
|
163,504
|
|
166,267
|
|
|
|
164,121
|
|
167,096
|
|
|
Darling Ingredients
Inc. and Subsidiaries
|
Consolidated Statement of Cash Flows
|
Twelve-Month Periods
Ended December 31, 2022 and January 1, 2022
|
(in
thousands)
|
|
|
|
|
|
Twelve Months
Ended
|
|
|
|
|
December 31,
|
|
January 1,
|
Cash flows from
operating activities:
|
2022
|
|
2022
|
|
Net income
|
|
$ 747,092
|
|
$
657,290
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
Depreciation and
amortization
|
394,721
|
|
316,387
|
|
|
Gain on sale of
assets
|
(4,494)
|
|
(958)
|
|
|
Restructuring and asset
impairment
|
29,666
|
|
138
|
|
|
Deferred
taxes
|
|
46,734
|
|
96,812
|
|
|
Decrease in long-term
pension liability
|
(7,037)
|
|
(4,742)
|
|
|
Stock-based
compensation expense
|
25,005
|
|
21,837
|
|
|
Write-off deferred loan
costs
|
-
|
|
1,130
|
|
|
Deferred loan cost
amortization
|
4,984
|
|
4,038
|
|
|
Equity in net income of
Diamond Green Diesel and other unconsolidated
subsidiaries
|
(377,448)
|
|
(357,380)
|
|
|
Distributions of
earnings from Diamond Green Diesel and other unconsolidated
subsidiaries
|
95,546
|
|
4,611
|
|
|
Changes in operating
assets and liabilities, net of effects from
acquisitions:
|
|
|
|
|
|
Accounts
receivable
|
(56,543)
|
|
(79,954)
|
|
|
Income taxes
refundable/payable
|
(3,495)
|
|
18,826
|
|
|
Inventories and prepaid
expenses
|
(130,170)
|
|
(72,919)
|
|
|
Accounts payable and accrued
expenses
|
65,936
|
|
84,580
|
|
|
Other
|
|
(16,758)
|
|
14,724
|
|
|
|
Net cash provided by
operating activities
|
813,739
|
|
704,420
|
Cash flows from
investing activities:
|
|
|
|
|
Capital
expenditures
|
|
(391,309)
|
|
(274,126)
|
|
Acquisitions, net of
cash acquired
|
(1,772,437)
|
|
(2,059)
|
|
Investment in Diamond
Green Diesel
|
(264,750)
|
|
(189,000)
|
|
Investment in other
unconsolidated subsidiaries
|
-
|
|
(4,449)
|
|
Loan to Diamond Green
Diesel
|
(50,000)
|
|
(25,000)
|
|
Loan repayment from
Diamond Green Diesel
|
50,000
|
|
-
|
|
Gross proceeds from
sale of property, plant and equipment and other assets
|
13,442
|
|
4,645
|
|
Payments related to
routes and other intangibles
|
(1,492)
|
|
(274)
|
|
|
|
Net cash used in
investing activities
|
(2,416,546)
|
|
(490,263)
|
Cash flows from
financing activities:
|
|
|
|
|
Proceeds from long-term
debt
|
1,934,885
|
|
43,824
|
|
Payments on long-term
debt
|
(63,078)
|
|
(142,133)
|
|
Borrowings from
revolving credit facility
|
1,873,795
|
|
620,601
|
|
Payments on revolving
credit facility
|
(1,897,280)
|
|
(515,424)
|
|
Net cash overdraft
financing
|
24,069
|
|
(3,845)
|
|
Deferred loan
costs
|
|
(16,780)
|
|
(3,809)
|
|
Issuance of common
stock
|
-
|
|
50
|
|
Repurchase of common
stock
|
(125,531)
|
|
(167,708)
|
|
Minimum withholding
taxes paid on stock awards
|
(46,944)
|
|
(46,894)
|
|
Distributions to
noncontrolling interests
|
(4,532)
|
|
(6,022)
|
|
|
|
Net cash
provided/(used) in financing activities
|
1,678,604
|
|
(221,360)
|
Effect of exchange rate
changes on cash flows
|
5,299
|
|
(5,445)
|
Net increase /
(decrease) in cash, cash equivalents and restricted cash
|
81,096
|
|
(12,648)
|
Cash, cash equivalents
and restricted cash at beginning of period
|
69,072
|
|
81,720
|
Cash, cash equivalents
and restricted cash at end of period
|
$ 150,168
|
|
$ 69,072
|
Diamond Green Diesel
Joint Venture
|
Condensed
Consolidated Balance Sheets
|
December 31, 2022
and December 31, 2021
|
(in
thousands)
|
|
|
|
|
|
December 31,
|
|
December
31,
|
|
|
|
|
2022
|
|
2021
|
Assets:
|
|
|
|
|
|
|
Total current
assets
|
|
$
1,304,805
|
|
$
686,294
|
|
Property, plant and
equipment, net
|
|
3,866,854
|
|
2,710,747
|
|
Other assets
|
|
61,665
|
|
51,514
|
|
|
Total assets
|
|
$
5,233,324
|
|
$
3,448,555
|
|
|
|
|
|
|
|
Liabilities and
members' equity:
|
|
|
|
|
|
Total current portion
of long term debt
|
|
$
217,066
|
|
$
165,092
|
|
Total other current
liabilities
|
|
515,023
|
|
295,860
|
|
Total long term
debt
|
|
774,783
|
|
344,309
|
|
Total other long term
liabilities
|
|
17,249
|
|
17,531
|
|
Total members'
equity
|
|
3,709,203
|
|
2,625,763
|
|
|
Total liabilities and
members' equity
|
|
$
5,233,324
|
|
$
3,448,555
|
Diamond Green Diesel
Joint Venture
|
Operating Financial
Results
|
For the Three-Month
and Twelve-Month Periods Ended December 31, 2022 and December 31,
2021
|
(in
thousands)
|
|
|
|
|
Three Months
Ended
|
|
|
Twelve Months
Ended
|
|
|
|
|
|
$ Change
|
|
|
|
|
$ Change
|
|
|
|
December 31,
|
|
December 31,
|
|
Favorable
|
|
|
December 31,
|
|
December 31,
|
|
Favorable
|
Revenues:
|
2022
|
|
2021
|
|
(Unfavorable)
|
|
|
2022
|
|
2021
|
|
(Unfavorable)
|
|
Operating
revenues
|
$
1,594,552
|
|
$
936,940
|
|
$
657,612
|
|
|
$
5,501,166
|
|
$
2,342,332
|
|
$ 3,158,834
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total costs and
expenses less
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
depreciation,
amortization and accretion expense
|
1,302,584
|
|
770,555
|
|
(532,029)
|
|
|
4,614,192
|
|
1,575,494
|
|
(3,038,698)
|
|
Depreciation,
amortization and
|
36,054
|
|
23,653
|
|
(12,401)
|
|
|
125,656
|
|
58,326
|
|
(67,330)
|
|
|
accretion
expense
|
|
|
|
|
|
|
|
|
|
|
|
|
Total costs and
expenses
|
1,338,638
|
|
794,208
|
|
(544,430)
|
|
|
4,739,848
|
|
1,633,820
|
|
(3,106,028)
|
|
Operating
income
|
255,914
|
|
142,732
|
|
113,182
|
|
|
761,318
|
|
708,512
|
|
52,806
|
Other income
|
1,244
|
|
154
|
|
1,090
|
|
|
3,170
|
|
678
|
|
2,492
|
Interest and debt
expense, net
|
(10,262)
|
|
(3,560)
|
|
(6,702)
|
|
|
(19,796)
|
|
(5,936)
|
|
(13,860)
|
|
Net income
|
$
246,896
|
|
$
139,326
|
|
$
107,570
|
|
|
$
744,692
|
|
$
703,254
|
|
$
41,438
|
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
|
For the Three-Month and
Twelve-Month Periods Ended December 31, 2022 and January 1,
2022.
|
|
|
|
Three Months
Ended
|
|
|
Twelve Months
Ended
|
Adjusted
EBITDA
|
December 31,
|
|
January
1,
|
|
|
December 31,
|
|
January
1,
|
(U.S. dollars in
thousands)
|
2022
|
|
2022
|
|
|
2022
|
|
2022
|
|
|
|
|
|
|
|
|
|
|
Net income attributable
to Darling
|
$
156,560
|
|
$
155,754
|
|
|
$
737,690
|
|
$
650,914
|
Depreciation and
amortization
|
117,384
|
|
80,805
|
|
|
394,721
|
|
316,387
|
Interest
expense
|
46,139
|
|
14,972
|
|
|
125,566
|
|
62,077
|
Income tax
expense
|
37,995
|
|
37,782
|
|
|
146,626
|
|
164,106
|
Restructuring and asset
impairment charges
|
21,109
|
|
-
|
|
|
29,666
|
|
778
|
Acquisition and
integration costs
|
2,738
|
|
1,396
|
|
|
16,372
|
|
1,396
|
Foreign currency
losses
|
5,272
|
|
900
|
|
|
11,277
|
|
2,199
|
Other (income) expense,
net
|
(242)
|
|
1,341
|
|
|
3,609
|
|
4,551
|
Equity in net income of
Diamond Green Diesel
|
(123,448)
|
|
(69,663)
|
|
|
(372,346)
|
|
(351,627)
|
Equity in net (income)
loss of other unconsolidated subsidiaries
|
831
|
|
(1,554)
|
|
|
(5,102)
|
|
(5,753)
|
Net income attributable
to noncontrolling interests
|
2,671
|
|
1,843
|
|
|
9,402
|
|
6,376
|
|
Adjusted EBITDA
(Non-GAAP)
|
$
267,009
|
|
$
223,576
|
|
|
$
1,097,481
|
|
$
851,404
|
Foreign currency
exchange impact
|
18,134
|
(1)
|
|
|
|
59,715
|
(2)
|
|
|
Pro forma
Adjusted EBITDA to Foreign Currency (Non-GAAP)
|
$
285,143
|
|
$
223,576
|
|
|
$
1,157,196
|
|
$
851,404
|
DGD Joint Venture
Adjusted EBITDA (Darling's Share)
|
$
145,984
|
|
$
83,192
|
|
|
$
443,487
|
|
$
383,419
|
|
|
|
|
|
|
|
|
|
|
Darling plus Darling's
share of DGD Joint Venture Adjusted EBITDA
|
$
412,993
|
|
$
306,768
|
|
|
$
1,540,968
|
|
$
1,234,823
|
|
|
|
|
|
|
|
|
|
|
(1) The average rate
assumption used in this calculation was the actual average rate for
the three months ended
|
December 31, 2022 of
€1.00:USD$1.02 and CAD$1.00:USD$0.74, as compared to the average
rate for the three months ended
|
January 1, 2022
of €1.00:USD$1.14 and CAD$1.00:USD$0.79,
respectively.
|
|
|
|
|
|
|
|
|
|
|
(2) The average rate
assumption used in this calculation was the actual average rate for
the twelve months ended
|
December 31, 2022 of
€1.00:USD$1.05 and CAD$1.00:USD$0.77, as compared to the average
rate for the twelve months ended
|
January 1, 2022
of €1.00:USD$1.18 and CAD$1.00:USD$0.80,
respectively.
|
About Darling Ingredients
Darling
Ingredients Inc. (NYSE: DAR) is the largest publicly traded company
turning edible by-products and food waste into sustainable products
and a leading producer of renewable energy. Recognized as a
sustainability leader, the company operates more than 260
facilities in 17 countries and repurposes approximately 15% of the
world's meat industry waste streams into value-added products, such
as green energy, renewable diesel, collagen, fertilizer, animal
proteins and meals, and pet food ingredients. To learn more, visit
darlingii.com. Follow us on LinkedIn.
Darling Ingredients Inc. will host a conference call to discuss
the Company's fourth quarter and fiscal year 2022 financial results
at 9 a.m. Eastern Time (8 a.m. Central Time) on Tuesday, Feb. 28, 2023. 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, and ask to
be connected to the Darling Ingredients Inc. call. 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 7, 2023, 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 6860343.
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 expense, 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
tax provision, other income/(expense) and equity in net
(income)/loss of unconsolidated subsidiaries. Management believes
that Adjusted EBITDA is useful in evaluating the Company's
operating performance compared to that of other companies in its
industry because the calculation of Adjusted EBITDA generally
eliminates the effects of financing, income taxes and certain
non-cash and other items that may vary for different companies for
reasons unrelated to overall operating performance.
Pro forma Adjusted EBITDA to Foreign Currency is not a
recognized accounting measurement under GAAP. The Company evaluates
the impact of foreign currency on its adjusted EBITDA. DGD Joint
Venture Adjusted EBITDA (Darling's share) is not reflected in the
Adjusted EBITDA or the Pro forma Adjusted EBITDA to Foreign
Currency (Non-GAAP).
The Company's management uses Adjusted EBITDA as a measure to
evaluate performance and for other discretionary purposes. In
addition to the foregoing, management also uses or will use
Adjusted EBITDA to measure compliance with certain financial
covenants under the Company's Senior Secured Credit Facilities,
6.0% Notes, 5.25% Notes and 3.625% Notes that were outstanding at
December 31, 2022. 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, 6.0% Notes, 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.
Information reconciling forward-looking combined adjusted EBITDA
to net income is unavailable to the Company without unreasonable
effort. The Company is not able to provide reconciliations of
combined adjusted EBITDA to net income because certain items
required for such reconciliations are outside of the Company's
control and/or cannot be reasonably predicted, such as the impact
of volatile commodity prices on the Company's operations, impact of
foreign currency exchange fluctuations, depreciation and
amortization and the provision for income taxes. Preparation of
such reconciliations for Darling Ingredients Inc. and the Company's
joint venture, Diamond Green Diesel, would require a
forward-looking balance sheet, statement of operations and
statement of cash flows, prepared in accordance with GAAP for each
entity, and such forward-looking financial statements are
unavailable to the Company without unreasonable effort. The Company
provides a range for its combined adjusted EBITDA outlook that it
believes will be achieved; however, it cannot accurately predict
all the components of the combined adjusted EBITDA calculation.
EBITDA per gallon is not a recognized accounting measurement
under GAAP; it should not be considered as an alternative to net
income or equity in income of Diamond Green Diesel, as a measure of
operating results, or as an alternative to cash flow as a measure
of liquidity and is not intended to be a presentation in accordance
with GAAP. EBITDA per gallon is presented here not as an
alternative to net income or equity in income of Diamond Green
Diesel, but rather as a measure of Diamond Green Diesel's operating
performance. Since EBITDA per gallon (generally, net income plus
interest expense, taxes, depreciation and amortization divided by
total gallons sold) is not calculated identically by all companies,
this presentation may not be comparable to EBITDA per gallon
presentations disclosed by other companies. Management believes
that EBITDA per gallon is useful in evaluating Diamond Green
Diesel's operating performance compared to that of other companies
in its industry because the calculation of EBITDA per gallon
generally eliminates the effects of financing, income taxes and
certain non-cash and other items presented on a per gallon basis
that may vary for different companies for reasons unrelated to
overall operating performance.
Cautionary Statements Regarding Forward-Looking Information:
This media release 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," "guidance," "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 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 United 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; the occurrence of
pandemics, epidemics or disease outbreaks, such as the current
COVID-19 outbreak; unanticipated costs and/or reductions in raw
material volumes related to the Company's compliance with the
existing or unforeseen new U.S. or foreign (including, without
limitation, China) regulations
(including new or modified animal feed, Bird Flu, SARS, PED, BSE,
ASF or similar or unanticipated regulations) affecting the
industries in which the Company operates or its value added
products; risks associated with the DGD Joint Venture, including
possible unanticipated operating disruptions, a decline in margins
on the products produced by the DGD Joint Venture, and issues
relating to the announced SAF upgrade project; failure to close on
strategic acquisitions; 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, 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 exit of the U.K. from the
European Union; and/or unfavorable export or import markets. These
factors, coupled with volatile prices for natural gas and diesel
fuel, inflation rates, climate conditions, currency exchange
fluctuations, general performance of the U.S. and global economies,
disturbances in world financial, credit, commodities and stock
markets, and any decline in consumer confidence and discretionary
spending, including the inability of consumers and 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 release 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.
Darling Ingredients
Contacts
|
Investors:
|
Suann
Guthrie
|
|
Senior VP, Investor
Relations, Sustainability & Communications
|
|
(469) 214-8202;
suann.guthrie@darlingii.com
|
Media:
|
Jillian
Fleming
|
|
Director, Global
Communications
|
|
(972) 541-7115;
jillian.fleming@darlingii.com
|
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SOURCE Darling Ingredients Inc.