EX-99.1 2 exh991-pressreleaseq22017.htm EXHIBIT 99.1 PRESS RELEASE Exhibit


EXHIBIT 99.1

News Release
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DARLING INGREDIENTS INC. REPORTS SECOND QUARTER 2017 FINANCIAL RESULTS
Strong Global Feed Segment and Diamond Green Diesel Performance
Continued Aggressive Debt Reduction

August 9, 2017 - IRVING, TEXAS - Darling Ingredients Inc. (NYSE: DAR), a global developer and producer of sustainable natural ingredients from edible and inedible bio-nutrients, creating a wide range of ingredients and customized specialty solutions for customers in the pharmaceutical, food, pet food, feed, industrial, fuel, bioenergy, and fertilizer industries, today announced financial results for the 2017 second quarter ended July 1, 2017.

Second Quarter 2017 Overview
•
Revenue of $896.3 million, up 2.2%
•
Net income of $9.1 million, or $0.05 per GAAP diluted share
•
Adjusted EBITDA of $110.1 million
•
Strong balance sheet with debt reduction of $45 million
•
Global raw material volumes steady, up 1.4%
•
Mixed global pricing environment, strength in fats offset by weakness in proteins
•
Diamond Greed Diesel facility delivered expected performance and expansion continues to progress

For the second quarter of 2017, the Company reported net sales of $896.3 million, as compared with net sales of $877.3 million for the second quarter of 2016. Net income attributable to Darling for the three months ended July 1, 2017 was $9.1 million, or $0.05 per diluted share, compared to a net income of $32.0 million, or $0.19 per diluted share, for the second quarter of 2016. The decrease in net income for the second quarter 2017 is primarily due to weakness in our Food Ingredients segment, particularly the gelatin business, and the absence of the blenders tax credit, which was included in the second quarter 2016 but has not yet been reinstated for 2017.

Comments on the Second Quarter 2017

“We are pleased with second quarter performance across most of the segments in light of a mixed global pricing environment and headwinds in South America,” said Randall C. Stuewe, Chairman and Chief Executive Officer of Darling Ingredients Inc. “Sequentially, the Feed segment delivered a very nice performance while the Food segment results were disappointing due to margin compression from rising raw material prices in our global gelatin business and ongoing macro-economic issues in Argentina. The Fuel segment excelled operationally in the midst of the stalled decision on the blenders tax credit. We remain optimistic that the political environment surrounding the biofuel industry today continues to support the Renewable Fuel Standard (RFS2) and the reinstatement of the blenders tax credit,” Mr. Stuewe commented.

“Additionally, our Board has approved the extension for an additional 24 months of our previously announced share repurchase program for up to $100 million to be exercised depending on market conditions,” added Mr. Stuewe.  “The repurchases may be made from time to time on the open market at prevailing market prices or in negotiated transactions off the market.  Repurchases may occur over the next 24 months, unless extended or shortened by the Board of Directors,” concluded Mr. Stuewe.

Operational Update by Segment

•
Feed Ingredients - Margins held and the segment performed well supported by solid global raw material volumes, especially in Europe. North American protein markets were mixed with strong pet food demand offset by lagging
 
 




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News Release
August 9, 2017
Page 2
 
 
 
 
 
meat and bone meal pricing. Global fat markets remained firm with demand trending lower late in the quarter in concert with lower palm oil complex prices.
•
Food Ingredients - While Rousselot gelatin business showed steady performance in Europe, South American gelatin business continued to face headwinds with margin compression from rising raw material prices and ongoing macroeconomic issues. CTH casings business delivered improved results as the short hog supply in China drove strong demand for hog casings. Sonac edible fats held margins and contributed as expected despite a weakening global palm oil market.
•
Fuel Ingredients -Consistent performance led by Rendac and Ecoson with segment decline due to the absence of the blenders tax credit impacting North American biodiesel facilities. Ecoson bio-phosphate plant provided normalized results with slightly lower supply volumes while Rendac, our disposal rendering operations, leveraged strong volumes.
•
Diamond Green Diesel Joint Venture (DGD) - DGD executed well operationally, delivering on its financial profile and posted $0.61 EBITDA per gallon despite the lack of the blenders tax credit in 2017 versus 2016. Solid cash position and capacity expansion to 275 million gallons of annual production is tracking as planned for Q2 2018 completion.

Financial Update by Segment

Feed Ingredients
Three Months Ended
Six Months Ended
($ thousands)
July 1, 2017
July 2, 2016
July 1, 2017
July 2, 2016
Net sales
$
549,119

$
542,955

$
1,101,743

$
1,019,126

Selling, general and administrative expenses
43,506

43,319

88,973

88,570

Depreciation and amortization
44,354

42,119

88,073

86,496

Segment operating income
39,023

41,372

69,851

55,258

EBITDA
$
83,377

$
83,491

$
157,924

$
141,754

*EBITDA calculated by adding depreciation and amortization to segment operating income.
 
 

•
Feed Ingredients operating income for the three months ended July 1, 2017 was $39.0 million, a decrease of $2.4 million or (5.8)% as compared to the three months ended July 2, 2016. Segment operating income was down in the three months ended July 1, 2017 as compared to the same period in fiscal 2016 due to higher depreciation from new plant locations that were not operating in the three months ended July 2, 2016.
•
Feed Ingredients operating income during the six months ended July 1, 2017 was $69.9 million, an increase of $14.6 million or 26.4% as compared to the six months ended July 2, 2016. Earnings for the Feed Ingredients segment were higher due to an overall increase in finished product prices, sales volumes and raw material volumes as compared to the same period in fiscal 2016.





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News Release
August 9, 2017
Page 3
 
 
 
 
 
Food Ingredients
Three Months Ended
Six Months Ended
($ thousands)
July 1, 2017
July 2, 2016
July 1, 2017
July 2, 2016
Net sales
$
279,827

$
272,120

$
547,615

$
520,017

Selling, general and administrative expenses
26,788

20,455

51,847

44,214

Depreciation and amortization
18,184

17,736

35,785

34,440

Segment operating income
11,025

19,650

25,152

41,530

EBITDA
$
29,209

$
37,386

$
60,937

$
75,970

*EBITDA calculated by adding depreciation and amortization to segment operating income.
 
 

•
Food Ingredients operating income was $11.0 million for the three months ended July 1, 2017, a decrease of $8.7 million or (44.2)% as compared to the three months ended July 2, 2016. The earnings in the gelatin business were down as compared to the prior year primarily due to the performance in the Company’s South American and North American markets. The Company’s South American gelatin business was the primary driver on the lower earnings and was impacted by margin compression influenced by rising raw material prices and continued macroeconomic factors. The Company’s North American gelatin business was influenced by higher raw material prices. The casings business delivered improved performance due to high demand in China that slightly offset lower earnings in the gelatin business. Additionally, selling, general and administrative expense in the Food Ingredients segment increased approximately $4.8 million primarily due to currency hedge losses in the three months ended July 1, 2017 as compared to currency hedge gains in the same period in fiscal 2016.
•
Food Ingredients operating income was $25.2 million for the six months ended July 1, 2017, a decrease of $16.3 million or (39.3)% as compared to the six months ended July 2, 2016. The earnings in the gelatin business were down as compared to the prior year primarily due to the performance in the Company’s South American market. Lower earnings in the Company’s South American gelatin business was due to margin compression influenced by rising raw material prices and macroeconomic factors. The casings business delivered improved performance due to high demand in China that slightly offset lower earnings in the gelatin business. Additionally, selling, general and administrative expense in the Food Ingredients segment increased approximately $6.3 million primarily due to a reduction of currency hedge gains in the six months ended July 1, 2017 as compared to the same period in fiscal 2016.

Fuel Ingredients
Three Months Ended
Six Month Ended
($ thousands)
July 1, 2017
July 2, 2016
July 1, 2017
July 2, 2016
Net sales
$
67,402

$
62,266

$
127,062

$
117,839

Selling, general and administrative expenses
2,902

1,804

6,193

3,654

Depreciation and amortization
7,715

7,184

14,560

14,103

Segment operating income
2,087

6,587

5,595

12,709

EBITDA
$
9,802

$
13,771

$
20,155

$
26,812

*EBITDA calculated by adding depreciation and amortization to segment operating income.
 
 
Results shown do not include the Diamond Green Diesel (DGD) 50% Joint Venture.
 
 





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News Release
August 9, 2017
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•
Exclusive of the DGD Joint Venture, the Company’s Fuel Ingredients segment income for the three months ended July 1, 2017 was $2.1 million, a decrease of $4.5 million or (68.2)% as compared to the same period in fiscal 2016. For the three months ended July 1, 2017 the North American region results do not include the blenders tax credit, while fiscal 2016 included the blenders tax credit. Earnings in Rendac and Ecoson for the three months ended July 1, 2017 were unchanged as compared to the same period in the prior year.
•
Exclusive of the DGD Joint Venture, the Company’s Fuel Ingredients segment income for the six months ended July 1, 2017 was $5.6 million, a decrease of $7.1 million or (55.9)% as compared to the same period in fiscal 2016. For the six months ended July 1, 2017, the North American region results do not include the blenders tax credit, while fiscal 2016 included the blenders tax credit.

Darling Ingredients Inc. and Subsidiaries
Consolidated Operating Results
For the Periods Ended July 1, 2017 and July 2, 2016
(in thousands, except per share data)
(unaudited)

 
Three Months Ended
Six Months Ended
 
 
 
 
 
$ Change
 
 
 
 
$ Change
 
July 1,
 
July 2,
 
Favorable
July 1,
 
July 2,
 
Favorable
 
2017
 
2016
 
(Unfavorable)
2017
 
2016
 
(Unfavorable)
Net sales
$
896,348

 
$
877,341

 
$
19,007

$
1,776,420

 
$
1,656,982

 
$
119,438

Costs and expenses:
 
 
 
 
 
 
 
 
 
 
Cost of sales and operating expenses
700,764

 
677,115

 
(23,649
)
1,390,391

 
1,276,008

 
(114,383
)
Selling, general and administrative expenses
85,531

 
76,158

 
(9,373
)
173,448

 
157,627

 
(15,821
)
Depreciation and amortization
72,990

 
69,531

 
(3,459
)
144,104

 
141,787

 
(2,317
)
Acquisition and integration costs
—

 
70

 
70

—

 
401

 
401

Total costs and expenses
859,285

 
822,874

 
(36,411
)
1,707,943

 
1,575,823

 
(132,120
)
Operating income
37,063

 
54,467

 
(17,404
)
68,477

 
81,159

 
(12,682
)
Other expense:
 
 
 
 
 
 
 
 
 
 
Interest expense
(22,446
)
 
(23,980
)
 
1,534

(44,126
)
 
(47,881
)
 
3,755

Foreign currency gain/(loss)
(2,111
)
 
8

 
(2,119
)
(2,375
)
 
(2,595
)
 
220

Other expense, net
(2,696
)
 
(2,373
)
 
(323
)
(3,656
)
 
(3,678
)
 
22

Total other expense
(27,253
)
 
(26,345
)
 
(908
)
(50,157
)
 
(54,154
)
 
3,997

Equity in net income of unconsolidated subsidiaries
8,260

 
13,852

 
(5,592
)
8,966

 
19,495

 
(10,529
)
Income before income taxes
18,070

 
41,974

 
(23,904
)
27,286

 
46,500

 
(19,214
)
Income taxes expense
7,742

 
7,983

 
241

9,560

 
9,846

 
286

Net income
10,328

 
33,991

 
(23,663
)
17,726

 
36,654

 
(18,928
)
Net income attributable to noncontrolling interests
(1,179
)
 
(1,992
)
 
813

(2,748
)
 
(3,576
)
 
828

Net income attributable to Darling
$
9,149

 
$
31,999

 
$
22,850

$
14,978

 
$
33,078

 
$
(18,100
)
Basic income per share:
$
0.06

 
$
0.19

 
$
(0.13
)
$
0.09

 
$
0.20

 
$
(0.11
)
Diluted income per share:
$
0.05

 
$
0.19

 
$
(0.14
)
$
0.09

 
$
0.20

 
$
(0.11
)
 
 
 
 
 
 
 
 
 
 
 
Number of diluted common shares:
166,831

 
165,474

 
 
166,348

 
165,013

 
 




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News Release
August 9, 2017
Page 5
 
 
 
 
 
Darling Ingredients Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
July 1, 2017 and December 31, 2016
(in thousands)
 
 
July 1,
 
December 31,
 
 
2017
 
2016
ASSETS
(unaudited)
 
 
Current assets:
 
 
 
 
Cash and cash equivalents
$
124,817

 
$
114,564

 
Restricted cash
282

 
293

 
Accounts receivable, net
382,957

 
388,397

 
Inventories
359,635

 
330,815

 
Prepaid expenses
37,750

 
29,984

 
Income taxes refundable
6,387

 
7,479

 
Other current assets
13,101

 
21,770

 
Total current assets
924,929

 
893,302

 
 
 
 
Property, plant and equipment, less accumulated depreciation, net
1,584,735

 
1,515,575

Intangible assets, less accumulated amortization, net
703,182

 
711,927

Goodwill
1,271,927

 
1,225,893

Investment in unconsolidated subsidiaries
279,814

 
292,717

Other assets
48,239

 
43,613

Deferred income taxes
17,050

 
14,990

 
Total assets
$
4,829,876

 
$
4,698,017

 
 
 
 
 
LIABILITIES AND STOCKHOLDERS' EQUITY
 
 
 
Current liabilities:
 
 
 
 
Current portion of long-term debt
$
19,370

 
$
23,247

 
Accounts payable, principally trade
186,458

 
180,895

 
Income taxes payable
17,213

 
4,913

 
Accrued expenses
265,939

 
242,796

 
Total current liabilities
488,980

 
451,851

 
 
 
 
 
Long-term debt, net of current portion
1,727,553

 
1,727,696

Other non-current liabilities
96,916

 
96,114

Deferred income taxes
349,221

 
346,134

 
Total liabilities
2,662,670

 
2,621,795

 
 
 
 
 
Commitments and contingencies
 
 
 
Total Darling's stockholders' equity
2,064,302

 
1,972,994

 
Noncontrolling interests
102,904

 
103,228

 
Total stockholders' equity
2,167,206

 
2,076,222

 
 
$
4,829,876

 
$
4,698,017





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News Release
August 9, 2017
Page 6
 
 
 
 
 

Darling Ingredients Inc. and Subsidiaries
Consolidated Statement of Cash Flows
Six Months Ended July 1, 2017 and July 2, 2016
(in thousands)
(unaudited)
 
Six Months Ended
 
July 1,
 
July 2,
Cash flows from operating activities:
2017
 
2016
Net income
$
17,726

 
$
36,654

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Depreciation and amortization
144,104

 
141,787

Loss/(gain) on disposal of property, plant, equipment and other assets
(358
)
 
827

Gain on insurance proceeds from insurance settlements
—

 
(356
)
Deferred taxes
(11,205
)
 
(1,812
)
Increase/(decrease) in long-term pension liability
1,362

 
(1,596
)
Stock-based compensation expense
11,003

 
5,067

Write-off deferred loan costs
340

 
57

Deferred loan cost amortization
4,366

 
5,600

Equity in net income of unconsolidated subsidiaries
(8,966
)
 
(19,495
)
Distribution of earnings from unconsolidated subsidiaries
25,806

 
25,994

Changes in operating assets and liabilities, net of effects from acquisitions:
 
 
 
  Accounts receivable
17,705

 
(20,081
)
  Income taxes refundable/payable
12,857

 
1,559

  Inventories and prepaid expenses
(21,952
)
 
(19,501
)
  Accounts payable and accrued expenses
16,594

 
30,989

  Other
(11,834
)
 
(17,460
)
Net cash provided by operating activities
197,548

 
168,233

Cash flows from investing activities:
 
 
 
Capital expenditures
(127,824
)
 
(109,406
)
Acquisitions, net of cash acquired
(12,369
)
 
(8,511
)
Investment of unconsolidated subsidiaries
(2,250
)
 
—

Gross proceeds from disposal of property, plant and equipment and other assets
3,603

 
2,404

Proceeds from insurance settlement
3,301

 
1,537

Payments related to routes and other intangibles
(4,635
)
 
—

Net cash used by investing activities
(140,174
)
 
(113,976
)
Cash flows from financing activities:
 
 
 
Proceeds from long-term debt
16,405

 
17,277

Payments on long-term debt
(67,974
)
 
(59,255
)
Borrowings from revolving credit facility
80,000

 
41,000

Payments on revolving credit facility
(80,327
)
 
(47,207
)
Net cash overdraft financing
(1,077
)
 
—

Deferred loan costs
(1,177
)
 
—

Issuance of common stock
22

 
143

Repurchase of common stock
—

 
(5,000
)
Minimum withholding taxes paid on stock awards
(2,091
)
 
(1,812
)
Excess tax benefits from stock-based compensation
—

 
(413
)
Distributions to noncontrolling interests
(2,135
)
 
—

Net cash used by financing activities
(58,354
)
 
(55,267
)
Effect of exchange rate changes on cash
11,233

 
1,941

Net increase in cash and cash equivalents
10,253

 
931

Cash and cash equivalents at beginning of period
114,564

 
156,884

Cash and cash equivalents at end of period
$
124,817

 
$
157,815

Supplemental disclosure of cash flow information:
 
 
 
Accrued capital expenditures
$
(5,445
)
 
$
(3,684
)
Cash paid during the period for:
 
 
 
Interest, net of capitalized interest
$
38,688

 
$
41,813

Income taxes, net of refunds
$
7,986

 
$
11,799

Non-cash financing activities:
 
 
 
Debt issued for assets
$
—

 
$
10

Contribution of assets to unconsolidated subsidiary
$
—

 
$
2,674




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News Release
August 9, 2017
Page 7
 
 
 
 
 
Selected financial information for the Company’s Diamond Green Diesel Joint Venture is as follows:

Diamond Green Diesel Joint Venture
Condensed Consolidated Balance Sheets
June 30, 2017 and December 31, 2016
(in thousands)

 
June 30,
 
December 31,
 
2017
 
2016
 
(unaudited)
 
 
Assets:
 
 
 
Total current assets
$
216,993

 
$
268,734

Property, plant and equipment, net
371,355

 
354,871

Other assets
7,291

 
12,164

Total assets
$
595,639

 
$
635,769

 
 
 
 
Liabilities and members' equity:
 
 
 
Total current portion of long term debt
$
17,023

 
$
17,023

Total other current liabilities
24,112

 
23,200

Total long term debt
45,242

 
53,753

Total other long term liabilities
435

 
418

Total members' equity
508,827

 
541,375

Total liabilities and members' equity
$
595,639

 
$
635,769



Diamond Green Diesel Joint Venture
Operating Financial Results
Three Months and Six Months Ended June 30, 2017 and June 30, 2016
(in thousands)
(unaudited)

 
Three Months Ended
Six Months Ended
 
 
 
 
 
$ Change
 
 
 
 
$ Change
 
June 30,
 
June 30,
 
Favorable
June 30,
 
June 30,
 
Favorable
 
2017
 
2016
 
(Unfavorable)
2017
 
2016
 
(Unfavorable)
Revenues:
 
 
 
 
 
 
 
 
 
 
Operating revenues
$
150,786

 
$
132,226

 
$
18,560

$
276,183

 
$
203,994

 
$
72,189

Expenses:
 
 
 
 
 
 
 
 
 
 
Total costs and expenses less depreciation, amortization and accretion expense
125,975

 
95,565

 
(30,410
)
241,297

 
148,074

 
(93,223
)
Depreciation, amortization and accretion expense
8,021

 
7,547

 
(474
)
16,134

 
12,925

 
(3,209
)
Total costs and expenses
133,996

 
103,112

 
(30,884
)
257,431

 
160,999

 
(96,432
)
Operating income
16,790

 
29,114

 
(12,324
)
18,752

 
42,995

 
(24,243
)
Other income
328

 
70

 
258

551

 
85

 
466

Interest and debt expense, net
(861
)
 
(1,928
)
 
1,067

(1,851
)
 
(4,742
)
 
2,891

Net income
$
16,257

 
$
27,256

 
$
(10,999
)
$
17,452

 
$
38,338

 
$
(20,886
)




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News Release
August 9, 2017
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 six months ended July 1, 2017 and July 2, 2016
 
 
Three Months Ended - Year over Year
 
Six Months Ended - Year over Year
Adjusted EBITDA
 
July 1,
 
July 2,
 
July 1,
 
July 2,
(U.S. dollars in thousands)
 
2017
 
2016
 
2017
 
2016
 
 
 
 
 
 
 
 
 
Net income attributable to Darling
 
$
9,149

 
$
31,999

 
$
14,978

 
$
33,078

Depreciation and amortization
 
72,990

 
69,531

 
144,104

 
141,787

Interest expense
 
22,446

 
23,980

 
44,126

 
47,881

Income tax expense
 
7,742

 
7,983

 
9,560

 
9,846

Foreign currency loss/(gain)
 
2,111

 
(8
)
 
2,375

 
2,595

Other expense, net
 
2,696

 
2,373

 
3,656

 
3,678

Equity in net (income) of unconsolidated subsidiaries
 
(8,260
)
 
(13,852
)
 
(8,966
)
 
(19,495
)
Net income attributable to noncontrolling interests
 
1,179

 
1,992

 
2,748

 
3,576

Adjusted EBITDA
 
$
110,053

 
$
123,998

 
$
212,581

 
$
222,946

Acquisition and integration-related expenses
 
—

 
70

 
—

 
401

Pro forma Adjusted EBITDA (Non-GAAP)
 
$
110,053

 
$
124,068

 
$
212,581

 
$
223,347

Foreign currency exchange impact (1)
 
1,973

 
—

 
3,805

 
—

Pro forma Adjusted EBITDA to Foreign Currency (Non-GAAP)
 
$
112,026

 
$
124,068

 
$
216,386

 
$
223,347

 
 
 
 
 
 
 
 
 
DGD Joint Venture Adjusted EBITDA (Darling's share)
 
$
12,406

 
$
18,331

 
$
17,443

 
$
27,960

 
 
 
 
 
 
 
 
 
(1) The average rates assumption used in the calculation was the actual fiscal average rate for the three months ended July 2, 2016 of €1.00:USD$1.13 and
CAD$1.00:USD$0.78 as compared to the average rate for the three months ended July 1, 2017 of €1.00:USD$1.10 and CAD$1.00:USD$0.74, respectively.
The average rates assumption used in the calculation was the actual fiscal average rate for the six months ended July 2, 2016 of €1.00:USD$1.12 and
CAD$1.00:USD$0.75 as compared to the average rate for the six months ended July 1, 2017 of €1.00:USD$1.08 and CAD$1.00:USD$0.75, respectively.










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News Release
August 9, 2017
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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://www.darlingii.com.
 
Darling Ingredients Inc. will host a conference call to discuss the Company’s second quarter 2017 financial results at 8:30 am Eastern Time (7:30 am Central Time) on Thursday, August 10, 2017. To listen to the conference call, participants calling from within North America should dial 844-868-8847; international participants should dial 412-317-6593. Please refer to access code 10109759. 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 October 17, 2017, 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 10109759. 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 5.375% Notes and 4.75% Notes that were outstanding at July 1, 2017. 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 and 4.75% 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.




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News Release
August 9, 2017
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Cautionary Statements Regarding Forward-Looking Information:
{This media release contains “forward-looking” statements regarding the business operations and prospects of Darling Ingredients Inc., including its Diamond Green Diesel joint venture, 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,” “assumption,” 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 emissions that adversely affect programs like the Renewable Fuel Standards Program (RFS2), 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 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 and issues related to the announced expansion project; 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:
 
 
 
Melissa A. Gaither, VP IR and Global Communications
251 O’Connor Ridge Blvd., Suite 300 Irving, Texas 75038
 
Email : mgaither@darlingii.com
Phone : 972-717-0300