Improved Global Food Segment, Steady Fuel Segment Performance and Substantial Progress on Diamond Green Diesel JV Phase Three Expansion Review
IRVING, Texas, May 9, 2018 /PRNewswire/ -- 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 2018 first quarter ended March 31, 2018.
- Revenue of $875.4 million, includes $12.6 million BTC from 2017 and $46.2 million reduction from ASC 606 adoption
- Net income $97.3 million, or $0.58 per GAAP diluted share
- Adjusted EBITDA $110.4 million
- Strong global raw material volumes, up 2.7 percent
- Lower feed segment EBITDA from lower fat pricing partially offset by robust protein values
- Diamond Green Diesel debt free following $53.7 million debt payment
- Euro Bonds refinanced late April, extending maturity from 2022 to 2026, more favorable terms
First quarter 2018 net sales of $875.4 million, compared to $878.5 million for 1Q 2017. Net income was $97.3 million, or $0.58 per diluted share, compared to $5.8 million, or $0.04 per diluted share in 1Q 2017. The increase is primarily due to the inclusion of the 2017 retroactive BTC passed in February 2018 and not reported in 1Q 2017. First quarter results also reflect a $46.2 million revenue reduction due to adoption of ASC 606 in Q1 2018 whereby freight revenue is now presented net in cost of sales.
"Operating results for the quarter were mixed, with lower Feed segment earnings offset by modestly improved Food and Fuel earnings. Harsh winter weather impacted many of our North American operations while global slaughter remained robust. Excess supply ultimately pressured prices in the Feed segment as raw material price adjustments lagged and inventories built. Steady and improving earnings in our Food and Fuel segments reflect the stability of those markets," said Randall C. Stuewe, Chairman and CEO of Darling Ingredients Inc. "Our DGD JV benefited from lower fat prices and provides a hedge to core Feed segment earnings. DGD operated at capacity post the 12-day turnaround at the predicted EBITDA per gallon run rate, and we remain optimistic we will achieve the predicted $1.25 per gallon EBITDA for the full year. We've made substantial progress on our cost analysis of the facility's Phase III expansion to 550 million gallons per year and expect to finalize our plans later this summer."
Stuewe continued, "Recently, we executed a private offering of €515 million of unsecured senior notes due 2026 at 3.625%. We concurrently conducted a cash tender offer of our outstanding 4.75% senior notes due 2022."
- Feed Ingredients – EBITDA $68.5 million (down 9 percent); Revenue $485.8 million (down 12.1 percent); Margin $116.7 million (down 2.6 percent). Raw material processed up 3.4 percent.
- Food Ingredients – EBITDA $32.4 million (up 1.9 percent); Revenue $305.5 million (up 14.8 percent); Margin $56.3 million (down 0.9 percent). Raw material processed up 3.7 percent.
- Fuel Ingredients – EBITDA $25.6 million (up 146.4 percent); Revenue $84.1 million (up 40.9 percent); Margin $24.2 million (up 76.6 percent). Raw material processed up 3.2 percent.
- Diamond Green Diesel JV – EBITDA $1.19 per gallon on 33.4 million gallons of sales. Retroactive BTC added $0.48 per share; Q1 2018 EBITDA, excluding the 2017 BTC, was $39.8 million, or $19.9 million entity level. Expected 45-day downtime mid-June for 275-million-gallon expansion; operations to commence around August 1.
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