Darling Ingredients Inc. Reports Fourth Quarter And Fiscal 2019 Financial Results

News provided by

Darling Ingredients Inc.

Feb 25, 2020, 16:35 ET

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

Fourth Quarter 2019

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

Full Year 2019

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

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

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

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

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

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

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

Segment Financial Tables  

(In thousands)

Three Months Ended December 28, 2019

Feed
Ingredients

Food
Ingredients

Fuel
Ingredients

Corporate

Total







Net Sales

$    490,317

$    288,619

$    80,492

$            -

$    859,428

Cost of sales and operating expenses

375,990

221,527

43,016

-

640,533

Gross Margin

$    114,327

$      67,092

$    37,476

$            -

$    218,895







Selling, general and administrative expenses

$      57,872

$      29,234

$      2,179

$  19,669

$    108,954

 Loss(Gain) on sale of assets 

(377)

343

297

-

263

Depreciation and amortization

55,185

20,556

7,891

2,821

86,453

Equity in net income of Diamond Green Diesel

-

-

270,062

-

270,062

Segment Operating Income

$        1,647

$      16,959

$  297,171

$ (22,490)

$    293,287

Equity in Net Income of Unconsolidated Subsidiaries

$        1,515

$                -

$             -

$            -

$        1,515

Segment Income

$        3,162

$      16,959

$  297,171

$ (22,490)

$    294,802







Segment EBITDA

$      56,832

$      37,515

$    35,000

$ (19,669)

$    109,678

DGD Adjusted EBITDA (Darling's Share)

$                -

$                -

$  276,146

$            -

$    276,146

Adjusted EBITDA

$      56,832

$      37,515

$  311,146

$ (19,669)

$    385,824







Three Months Ended December 29, 2018

Feed
Ingredients

Food
Ingredients

Fuel
Ingredients

Corporate

Total







Net Sales

$    485,190

$    291,669

$    76,271

$            -

$    853,130

Cost of sales and operating expenses

374,777

233,179

59,689

-

667,645

Gross Margin

$    110,413

$      58,490

$    16,582

$            -

$    185,485







Selling, general and administrative expenses

44,808

23,652

(714)

8,611

76,357

 Loss(Gain) on sale of assets 

199

(38)

76

0

237

Depreciation and amortization

53,359

20,263

8,603

3,052

85,277

Equity in net income of Diamond Green Diesel

-

-

50,124

-

50,124

Segment Operating Income

$      12,047

$      14,613

$    58,741

$ (11,663)

$      73,738

Equity in Net Income of Unconsolidated Subsidiaries

$         (493)

$                -

$             -

$            -

$         (493)

Segment Income

$      11,554

$      14,613

$    58,741

$ (11,663)

$      73,245







Segment EBITDA

$      65,406

$      34,876

$    17,220

$   (8,611)

$    108,891

DGD Adjusted EBITDA (Darling's Share)

$                -

$                -

$    55,268

$            -

$      55,268

Adjusted EBITDA

$      65,406

$      34,876

$    72,488

$   (8,611)

$    164,159







Twelve Months Ended December 28, 2019

Feed
Ingredients

Food
Ingredients

Fuel
Ingredients

Corporate

Total







Net Sales

$ 1,970,561

$ 1,119,085

$  274,259

$            -

$ 3,363,905

Cost of sales and operating expenses

1,519,596

864,618

204,871

-

2,589,085

Gross Margin

$    450,965

$    254,467

$    69,388

$            -

$    774,820







Selling, general and administrative expenses

200,487

97,363

2,762

57,911

358,523

 Loss/(Gain) on sale of assets 

(7,720)

(13,175)

313

-

(20,582)

Depreciation and amortization

203,456

79,671

31,946

10,437

325,510

Equity in net income of Diamond Green Diesel

-

-

364,452

-

364,452

Segment Operating Income

$      54,742

$      90,608

$  398,819

$ (68,348)

$    475,821

Equity in Net Income of Unconsolidated Subsidiaries

$           428

$                -

$             -

$            -

$           428

Segment Income

$      55,170

$      90,608

$  398,819

$ (68,348)

$    476,249







Segment EBITDA

$    258,198

$    170,279

$    66,313

$ (57,911)

$    436,879

DGD Adjusted EBITDA (Darling's Share)

$                -

$                -

$  389,416

$            -

$    389,416

Adjusted EBITDA

$    258,198

$    170,279

$  455,729

$ (57,911)

$    826,295







Twelve Months Ended December 29, 2018

Feed
Ingredients

Food
Ingredients

Fuel
Ingredients

Corporate

Total







Net Sales

$ 1,952,555

$ 1,139,126

$  296,045

$            -

$ 3,387,726

Cost of sales and operating expenses

1,497,973

918,141

230,260

-

2,646,374

Gross Margin

$    454,582

$    220,985

$    65,785

$            -

$    741,352







Selling, general and administrative expenses

176,722

91,546

(4,770)

45,766

309,264

 Loss/(Gain) on sale of assets 

725

(282)

266

-

709

Restructure Cost


14,965



14,965

Depreciation and amortization

194,292

80,988

34,981

10,931

321,192

Equity in net income of Diamond Green Diesel

-

-

159,779

-

159,779

Segment Operating Income

$      82,843

$      33,768

$  195,087

$ (56,697)

$    255,001

Equity in Net Income of Unconsolidated Subsidiaries

$         (550)

$                -

$             -

$            -

$         (550)

Segment Income

$      82,293

$      33,768

$  195,087

$ (56,697)

$    254,451







Segment EBITDA

$    277,135

$    129,721

$    70,289

$ (45,766)

$    431,379

DGD Adjusted EBITDA (Darling's Share)

$                -

$                -

$  174,013

$            -

174,013

Adjusted EBITDA

$    277,135

$    129,721

$  244,302

$ (45,766)

$    605,392

Darling Ingredients Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

December 28, 2019 and December 29, 2018

(in thousands)




December 28,


December 29,



2019


2018

ASSETS




Current assets:





Cash and cash equivalents

$          72,935


$        107,262


Restricted cash

110


107


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

406,338


385,737


Inventories

362,957


341,028


Prepaid expenses

46,599


35,247


Income taxes refundable

3,317


6,462


Other current assets

25,032


22,099


              Total current assets

917,288


897,942

Property, plant and equipment, net

1,802,411


1,687,858

Intangible assets, net

526,394


595,862

Goodwill

1,223,291


1,229,159

Investment in unconsolidated subsidiaries

689,354


410,177

Operating lease right-of-use assets

124,726


-

Other assets

47,400


53,375

Deferred income taxes

14,394


14,981



$     5,345,258


$     4,889,354

LIABILITIES AND STOCKHOLDERS' EQUITY




Current liabilities:





Current portion of long-term debt

$          90,996


$            7,492


Accounts payable, principally trade

239,252


219,479


Income taxes payable

8,895


4,043


Current operating lease liabilities

37,805


-


Accrued expenses

311,391


309,484


              Total current liabilities

688,339


540,498

Long-term debt, net of current portion

1,558,429


1,666,940

Long-term operating lease liabilties

91,424


-

Other noncurrent liabilities

115,785


115,032

Deferred income taxes

247,931


231,063


              Total liabilities

2,701,908


2,553,533

Commitments and contingencies




Total Darling's stockholders' equity

2,565,819


2,273,048

Noncontrolling interests

77,531


62,773


              Total stockholders' equity

$     2,643,350


$     2,335,821



$     5,345,258


$     4,889,354

Darling Ingredients Inc. and Subsidiaries

Consolidated Operating Results

For the Periods Ended December 28, 2019 and December 29, 2018

(in thousands, except per share data)




(Fourth Quarter Unaudited)










Three Months Ended



Fiscal Year Ended







$ Change







$ Change



December 28,


December 29,


Favorable



December 28,


December 29,


Favorable



2019


2018


(Unfavorable)



2019


2018


(Unfavorable)

Net sales

$        859,428


$        853,130


$          6,298



$     3,363,905


$     3,387,726


$         (23,821)

Costs and expenses:














Cost of sales and operating expenses

640,533


667,645


27,112



2,589,085


2,646,374


57,289


Loss (gain) on sale of assets

263


237


(26)



(20,582)


709


21,291


Selling, general and administrative expenses

108,954


76,357


(32,597)



358,523


309,264


(49,259)


Restructuring and impairment charges

-


-


-



-


14,965


14,965


Depreciation and amortization

86,453


85,277


(1,176)



325,510


321,192


(4,318)

Total costs and expenses

836,203


829,516


(6,687)



3,252,536


3,292,504


39,968


Equity in net income of Diamond Green Diesel

270,062


50,124


219,938



364,452


159,779


204,673

Operating income

293,287


73,738


219,549



475,821


255,001


220,820

Other expense:














Interest expense

(18,586)


(20,209)


1,623



(78,674)


(86,429)


7,755


Debt extinguishment costs

-


-


-



(12,126)


(23,509)


11,383


Foreign currency gain/(loss)

(657)


651


(1,308)



(1,311)


(6,431)


5,120


Gain/(loss) on disposal of subsidiaries

2,967


(45)


3,012



2,967


(12,545)


15,512


Other income (expense), net

487


(3,459)


3,946



(6,671)


(7,562)


891

Total other expense

(15,789)


(23,062)


7,273



(95,815)


(136,476)


40,661

Equity in net income/(loss) of unconsolidated subsidiaries

1,515


(493)


2,008



428


(550)


978

Income before income taxes

279,013


50,183


228,830



380,434


117,975


262,459

Income taxes expense

35,567


8,039


(27,528)



59,467


12,031


(47,436)

Net income

243,446


42,144


201,302



320,967


105,944


215,023

Net income attributable to noncontrolling interests

(837)


(1,496)


659



(8,367)


(4,448)


(3,919)

Net income attributable to Darling

$        242,609


$          40,648


$        201,961



$        312,600


$        101,496


$        211,104















Basic income per share:

$              1.48


$              0.25


$               1.23



$              1.90


$              0.62


$              1.28

Diluted income per share:

$              1.44


$              0.24


$              1.20



$              1.86


$              0.60


$              1.26















Number of diluted common shares:

168,152


168,379





168,378


167,910



Darling Ingredients Inc. and Subsidiaries

Consolidated Statement of Cash Flows

Fiscal Years Ended December 28, 2019 and December 29, 2018

(in thousands)






Fiscal Year Ended





December 28,


December 29,

Cash flows from operating activities:

2019


2018


Net income

$         320,967


$         105,944


Adjustments to reconcile net income to net cash provided by operating activities:






Depreciation and amortization

325,510


321,192



Deferred income taxes

20,530


(16,974)



Loss/(gain) on sale of assets

(20,582)


709



Loss/(gain) on disposal of subsidiaries

(2,967)


12,545



Asset impairment

-


2,907



Gain on insurance proceeds from insurance settlement

(6,600)


(1,253)



Increase in long-term pension liability

1,831


1,463



Stock-based compensation expense

21,007


18,779



Debt extinguishment costs

12,126


23,509



Write-off deferred loan costs

270


320



Deferred loan cost amortization

5,846


7,870



Equity in net income of unconsolidated subsidiaries

(364,880)


(159,229)



Distribution of earnings from unconsolidated subsidiaries

69,213


67,638



Changes in operating assets and liabilities, net of effects from acquisitions:






     Accounts receivable

(26,086)


(6,347)



     Income taxes refundable/payable

9,542


(9,809)



     Inventories and prepaid expenses

(39,111)


2,391



     Accounts payable and accrued expenses

32,436


14,534



     Other

3,569


12,426




 Net cash provided by operating activities

362,621


398,615

Cash flows from investing activities:





Capital expenditures

(359,498)


(321,896)


Acquisitions, net of cash acquired

(1,431)


(107,727)


Investment of unconsolidated subsidiary

(2,000)


(12,250)


Proceeds from sale of investment in subsidiaries

3,671


82,760


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

18,235


19,328


Proceeds from insurance settlement

6,600


1,253


Payments related to routes and other intangibles

(3,651)


(3,883)




 Net cash used by investing activities

(338,074)


(342,415)

Cash flows from financing activities:





Proceeds from long-term debt

517,606


624,620


Payments on long-term debt

(581,163)


(686,628)


Borrowings from revolving credit facility

469,227


543,898


Payments on revolving credit facility

(461,669)


(510,974)


Net cash overdraft financing

38,367


3,460


Deferred loan costs

(7,027)


(9,668)


Issuance of common stock

39


182


Repurchase of common stock

(19,260)


-


Minimum withholding taxes paid on stock awards

(4,472)


(2,215)


Distributions to noncontrolling interests

(6,533)


(10,257)




 Net cash used in financing activities

(54,885)


(47,582)

Effect of exchange rate changes on cash flows

(3,986)


(8,165)

Net increase/(decrease) in cash, cash equivalents and restricted cash

(34,324)


453

Cash, cash equivalents and restricted cash at beginning of year

107,369


106,916

Cash, cash equivalents and restricted cash at end of year

$            73,045


$         107,369

Supplemental disclosure of cash flow information:





Accrued capital expenditures

$               6,487


$               5,951


Cash paid during the period for:






Interest, net of capitalized interest

$            79,132


$            75,006



Income taxes, net of refunds

$            29,778


$            33,162


Non-cash operating activities:






Operating lease right of use obtained in exchange for new lease liabilities

$            40,596


$                           -


Non-cash financing activities:






Debt issued for service contract assets

$                       25


$                       22

Diamond Green Diesel Joint Venture

Condensed Consolidated Balance Sheets

December 31, 2019 and December 31, 2018

(in thousands)






December  31,


December  31,





2019


2018

Assets:






Total current assets


$         668,026


$         186,258


Property, plant and equipment, net


713,489


576,384


Other assets


30,710


24,601



Total assets


$      1,412,225


$         787,243








Liabilities and members' equity:






Total current portion of long term debt


$                341


$                189


Total other current liabilities


75,802


40,619


Total long term debt


8,742


8,485


Total other long term liabilities


4,422


539


Total members' equity


1,322,918


737,411



Total liabilities and members' equity


$      1,412,225


$         787,243

Diamond Green Diesel Joint Venture

Operating Financial Results

Three Months and Fiscal Year Ended December 31, 2019 and December 31, 2018

(in thousands)





(Fourth Quarter Unaudited)











Three Months Ended



Twelve Months Ended








$ Change







$ Change




December 31,


December 31,


Favorable



December 31,


December 31,


Favorable

Revenues:

2019


2018


(Unfavorable)



2019


2018


(Unfavorable)


Operating revenues

$        357,857


$        270,542


$          87,315



$     1,217,504


$        677,663


$        539,841

Expenses:














Total costs and expenses less depreciation, amortization and accretion expense

236,149


160,004


(76,145)



869,258


490,030


(379,228)


Depreciation, amortization and accretion expense

12,193


10,544


(1,649)



50,767


29,434


(21,333)


Blenders tax credit

(430,586)


-


430,586



(430,586)


(160,394)


270,192

Total costs and expenses

(182,244)


170,548


352,792



489,439


359,070


(130,369)


Operating income 

540,101


99,994


440,107



728,065


318,593


409,472

Other income

340


571


(231)



2,121


1,919


202



Interest and debt expense, net

(317)


(318)


1



(1,282)


(955)


(327)



Net income 

$        540,124


$        100,247


$        439,877



$        728,904


$        319,557


$        409,347

Darling Ingredients Inc. reports Adjusted EBITDA results, which is a Non-GAAP financial measure, as a complement to results provided in accordance with generally accepted accounting principles (GAAP) (for additional information, see "Use of Non-GAAP Financial Measures" included later in this media release). The Company believes that Adjusted EBITDA provides additional useful information to investors. Adjusted EBITDA, as the Company uses the term, is calculated below:

Reconciliation of Net Income to (Non-GAAP) Adjusted EBITDA and (Non-GAAP) Pro forma Adjusted EBITDA
Three and twelve months ended December 28, 2019 and December 29, 2018



(unaudited)







Three Months Ended


Fiscal Year Ended 

Adjusted EBITDA 

December 28,


December 29,


December 28,


December 29,

(U.S. dollars in thousands)

2019


2018


2019


2018










Net income attributable to Darling

$        242,609


$          40,648


$        312,600


$        101,496

Depreciation and amortization

86,453


85,277


325,510


321,192

Interest expense

18,586


20,209


78,674


86,429

Income tax expense/(benefit)

35,567


8,039


59,467


12,031

Restructuring and impairment charges

-


-


-


14,965

Foreign currency loss/(gain)

657


(651)


1,311


6,431

Other income (expense), net

(487)


3,459


6,671


7,562

Debt extinguishment costs

-


-


12,126


23,509

Loss/(gain) on disposal of subsidiaries

(2,967)


45


(2,967)


12,545

Equity in net (income)/loss of Diamond Green Diesel

(270,062)


(50,124)


(364,452)


(159,779)

Equity in net income of unconsolidated subsidiaries

(1,515)


493


(428)


550

Net income attributable to noncontrolling interests

837


1,496


8,367


4,448


Adjusted EBITDA (Non-GAAP)

$        109,678


$        108,891


$        436,879


$        431,379

Foreign currency exchange impact 

2,149

(1)

-


16,898

(1)

-


 Pro forma Adjusted EBITDA to Foreign Currency (Non-GAAP)

$        111,827


$        108,891


$        453,777


$        431,379

DGD Joint Venture Adjusted EBITDA (Darling's Share)

$        276,146


$          55,268


$        389,416


$        174,013










Darling plus Darling's share of DGD Joint Venture Adjusted EBITDA 

$        385,824


$        164,159


$        826,295


$        605,392


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

The average rate assumption used in this calculation was the actual fiscal average rate for the fiscal year ended December 28, 2019 of €1.00:USD$1.12 and CAD$1.00:USD$0.75 as compared to the average rate for the fiscal year ended December 29, 2018 of  €1.00:USD$1.18 and CAD$1.00:USD$0.77, respectively.

About Darling

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

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

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

Use of Non-GAAP Financial Measures:

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

As a result, the Company's management uses Adjusted EBITDA as a measure to evaluate performance and for other discretionary purposes. In addition to the foregoing, management also uses or will use Adjusted EBITDA to measure compliance with certain financial covenants under the Company's Senior Secured Credit Facilities and 5.25% Notes and 3.625% Notes that were outstanding at December 28, 2019. However, the amounts shown in this presentation for Adjusted EBITDA differ from the amounts calculated under similarly titled definitions in the Company's Senior Secured Credit Facilities and 5.25% Notes and 3.625% Notes, as those definitions permit further adjustments to reflect certain other non-recurring costs, non-cash charges and cash dividends from the DGD Joint Venture. Additionally, the Company evaluates the impact of foreign exchange impact on operating cash flow, which is defined as segment operating income (loss) plus depreciation and amortization.

Cautionary Statements Regarding Forward-Looking Information:

{This media release contains "forward-looking" statements regarding the business operations and prospects of Darling Ingredients Inc. and industry factors affecting it. These statements are identified by words such as "believe," "anticipate," "expect," "estimate," "intend," "could," "may," "will," "should," "planned," "potential," "continue," "momentum," and other words referring to events that may occur in the future.  These statements reflect Darling Ingredient's current view of future events and are based on its assessment of, and are subject to, a variety of risks and uncertainties beyond its control, each of which could cause actual results to differ materially from those indicated in the forward-looking statements.  These factors include, among others, existing and unknown future limitations on the ability of the Company's direct and indirect subsidiaries to make their cash flow available to the Company for payments on the Company's indebtedness or other purposes; global demands for bio-fuels and grain and oilseed commodities, which have exhibited volatility, and can impact the cost of feed for cattle, hogs and poultry, thus affecting available rendering feedstock and selling prices for the Company's products; reductions in raw material volumes available to the Company due to weak margins in the meat production industry as a result of higher feed costs, reduced consumer demand or other factors, reduced volume from food service establishments, or otherwise; reduced demand for animal feed; reduced finished product prices, including a decline in fat and used cooking oil finished product prices; changes to worldwide government policies relating to renewable fuels and greenhouse gas("GHG") emissions that adversely affect programs like the U.S. government's renewable fuel standard, low carbon fuel standards ("LCFS") and tax credits for biofuels both in the Unites States and abroad; possible product recall resulting from developments relating to the discovery of unauthorized adulterations to food or food additives; the occurrence of 2009 H1N1 flu (initially known as "Swine Flu"), Highly pathogenic strains of avian influenza (collectively known as "Bird Flu"), bovine spongiform encephalopathy (or "BSE"), porcine epidemic diarrhea ("PED") or other diseases associated with animal origin in the United States or elsewhere, such as the outbreak of African Swine Fever ("ASF") in China and elsewhere; escalation in the outbreak of the coronavirus; unanticipated costs and/or reductions in raw material volumes related to the Company's compliance with the existing or unforeseen new U.S. or foreign (including, without limitation, China) regulations (including new or modified animal feed, Bird Flu, PED, BSE, ASF or similar or unanticipated regulations) affecting the industries in which the Company operates or its value added products; risks associated with the DGD Joint Venture, including possible unanticipated operating disruptions and issues relating to the announced expansion project; risks and uncertainties relating to international sales and operations, including imposition of tariffs, quotas, trade barriers and other trade protections imposed by foreign countries; difficulties or a significant disruption in our information systems or failure to implement new systems and software successfully, including our ongoing enterprise resource  planning project; risks relating to possible third party claims of intellectual property infringement; increased contributions to the Company's pension and benefit plans, including multiemployer and employer-sponsored defined benefit pension plans as required by legislation, regulation or other applicable U.S. or foreign law or resulting from a U.S. mass withdrawal event; bad debt write-offs; loss of or failure to obtain necessary permits and registrations; continued or escalated conflict in the Middle East, North Korea, Ukraine or elsewhere; uncertainty regarding the likely exit of the U.K. from the European Union; and/or unfavorable export or import markets. These factors, coupled with volatile prices for natural gas and diesel fuel, climate conditions, currency exchange fluctuations, general performance of the U.S. and global economies, disturbances in world financial, credit, commodities and stock markets, and any decline in consumer confidence and discretionary spending, including the inability of consumers and companies to obtain credit due to lack of liquidity in the financial markets, among others, could negatively impact the Company's results of operations. Among other things, future profitability may be affected by the Company's ability to grow its business, which faces competition from companies that may have substantially greater resources than the Company. The Company's announced share repurchase program may be suspended or discontinued at any time and purchases of shares under the program are subject to market conditions and other factors, which are likely to change from time to time. Other risks and uncertainties regarding Darling Ingredients Inc., its business and the industries in which it operates are referenced from time to time in the Company's filings with the Securities and Exchange Commission.  Darling Ingredients Inc. is under no obligation to (and expressly disclaims any such obligation to) update or alter its forward-looking statements whether as a result of new information, future events or otherwise.}

For More Information, contact:

Jim Stark, Vice President, Investor Relations

Email : [email protected]

5601 MacArthur Blvd., Irving, Texas 75038

Phone : 972-281-4823

SOURCE Darling Ingredients Inc.