Darling Ingredients Inc. Reports Second Quarter 2017 Financial Results
Strong Global Feed Segment and Diamond Green Diesel Performance
Continued Aggressive Debt Reduction
IRVING, Texas, Aug. 9, 2017 /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 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 Green 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 2016 second quarter. 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 2016 second quarter. The decrease in net income 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.
Second Quarter 2017 Commentary
"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 executed 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: Second Quarter 2017 Compared to Second Quarter 2016
- Feed Ingredients – EBITDA $83.4 million (flat); Revenue $549.1 million (up 1.1 percent); Gross margin $126.9 million (flat); Raw material processed up 2.2 percent.
- Food Ingredients – EBITDA $29.2 million (up 2.5 percent); Revenue $279.8 million (up 2.8 percent); Gross margin $56.0 million (down 3.2 percent); Raw material processed up 0.6 percent.
- Fuel Ingredients – EBITDA $9.8 million (down 29 percent); Revenue $67.4 million (up 8.2 percent); Gross margin $12.7 million (down 18.4 percent); Raw material processed down 3.5 percent.
- Diamond Green Diesel Joint Venture – Solid performance with $0.61 EBITDA per gallon without the blenders tax credit in 2017 versus 2016. Capacity expansion expected in Q2 2018.
For More Information, contact:
Melissa A. Gaither, VP IR and Global Communications
Email : mgaither@darlingii.com
Phone : 972-717-0300
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