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Darling Ingredients Inc. Reports Fourth Quarter And Fiscal 2018 Financial Results: Delivering on World of Growth Strategy

Darling Ingredients Inc.
2019-02-28 05:47 1920

IRVING, Texas, Feb. 28, 2019 /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 fiscal 2018 fourth quarter and year ended December 29, 2018.

Fourth Quarter 2018 Overview

  • Net income of $40.6M, or $0.24 per GAAP diluted share
  • Revenue of $853.1M
  • Adjusted EBITDA of $108.9M
  • DGD delivered record quarter, Entity EBITDA of $110M
  • Strong global raw material volumes up 1.5 % over Q4 2017
  • Feed segment still challenged by trade disruptions and lagging fat prices
  • Food segment showed improved earnings in the collagen business
  • Improved performance in Fuel segment reflects investments in Euro bioenergy
  • DGD partner dividend of $40M

Fiscal 2018 Overview

  • Net income of $101.5M, or $0.60 per GAAP diluted share
  • Consolidated Revenue of $3.4B
  • Adjusted EBITDA of $431.4M
  • DGD partner dividend of $65M; Phase III large scale expansion underway
  • No net borrowings while investing $108M in growth acquisitions
  • Total debt-to-EBITDA ratio improved to 3.13 per bank covenant

Fourth quarter 2018 net sales of $853.1 million, compared with net sales of $952.5 million for Q4 2017. Fourth quarter 2018 net income was $40.6 million, or $0.24 per diluted share, compared to $105.7 million, or $0.63 per diluted share, for Q4 2017.  Net income decline primarily attributable to income tax expense compared to an income tax benefit in the same 2017 period due to the remeasurement of deferred tax liabilities per the U.S. Tax Cuts and Jobs Act and benefits from European tax reform, along with higher depreciation costs from increased capital expenditures offsetting increased income from unconsolidated subsidiaries and lower selling, general and administrative expenses.

Fiscal year 2018 net sales of $3,388 million, compared with net sales of $3,662 million for FY 2017. Net Income attributable to Darling for FY 2018 was $101.5 million, or $0.60 per diluted share, as compared to a net income of $128.5 million, or $0.77 per diluted share, for FY 2017. The decrease in net income for 2018 is primarily attributable to income tax expense compared to an income tax benefit in 2017 due to the remeasurement of deferred tax liabilities per the U.S. Tax Cuts and Jobs Act and benefits from European tax reform. Lower earnings in 2018 compared to 2017 is also attributed to debt extinguishment costs, higher depreciation costs, restructuring and impairment charges and loss on disposal of subsidiaries.

"Our fourth quarter truly showed the diversity and consistency of our global ingredients platform and the potential DGD has to transform Darling," said Randall C. Stuewe, Chairman and Chief Executive Officer of Darling Ingredients Inc. "During the year, we made strong advancements executing our world of growth strategy to create a sustainable portfolio of value-added and specialty ingredients through multiple, completed construction projects, expansions and bolt on acquisitions."

  • Feed Ingredients – EBITDA $277.1M (down 12.4%); Revenue $1,952.6M (down 12.8%); Margin $453.8M (down 8.3%). Raw material processed up 4.4%.
  • Food Ingredients – EBITDA $129.7M (down 1.7%); Revenue $1,139.1M (down 1.5%); Margin $221.3M (down 6.5%). Raw material processed consistent. 
  • Fuel Ingredients – EBITDA $70.3M (up 56%); Revenue $296.0M (up 11.4%); Margin $65.5M (up 18.2%). Raw material processed consistent.
  • Diamond Green Diesel Joint Venture – Total 2018 entity EBITDA of $187.6 million (excluding $160.4 million for 2017 BTC recorded Q1 2018), or $1.19 per gallon. Closed year debt free.

For More Information, contact:
Melissa A. Gaither, VP IR and Global Communications
mgaither@darlingii.com
972-281-4478

Source: Darling Ingredients Inc.
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