Q3 | November 7, 2023 The presentation includes "forward-looking" statements that are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the statements. Statements that are not statements of historical facts are forward-looking statements and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Words such as "estimate," "guidance," "outlook," "project," "planned," "contemplate," "poten ...

[PART I: FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%3A%20FINANCIAL%20INFORMATION) This section provides the unaudited consolidated financial statements and management's discussion and analysis for the company [Financial Statements](index=3&type=section&id=Item%201.%20FINANCIAL%20STATEMENTS) This section presents the unaudited consolidated financial statements for Darling Ingredients Inc. for the period ended September 30, 2023, including balance sheets, statements of operations, comprehensive income, stockholders' equity, and cash flows, along with detailed notes [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) The company's total assets increased to **$10.81 billion** as of September 30, 2023, from **$9.20 billion** at the end of 2022, primarily driven by increases in goodwill, intangible assets, and investment in unconsolidated subsidiaries, while total liabilities grew to **$6.34 billion** from **$5.31 billion** Consolidated Balance Sheet Highlights (in thousands USD) | Balance Sheet Item | Sep 30, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | **Total current assets** | $1,842,995 | $1,638,097 | | **Total assets** | **$10,810,337** | **$9,202,370** | | **Total current liabilities** | $1,033,703 | $1,068,443 | | **Long-term debt** | $4,338,126 | $3,314,969 | | **Total liabilities** | **$6,343,355** | **$5,305,880** | | **Total stockholders' equity** | **$4,466,982** | **$3,896,490** | [Consolidated Statements of Operations](index=5&type=section&id=Consolidated%20Statements%20of%20Operations) For Q3 2023, Net Sales decreased to **$1.63 billion** from **$1.75 billion** year-over-year, and Net Income attributable to Darling fell to **$125.0 million** from **$191.1 million**, while for the nine-month period, Net Sales increased to **$5.17 billion** from **$4.76 billion**, with Net Income slightly decreasing to **$563.2 million** from **$581.1 million** Key Performance Indicators (in thousands USD, except per share data) | Metric | Q3 2023 | Q3 2022 | Nine Months 2023 | Nine Months 2022 | | :--- | :--- | :--- | :--- | :--- | | **Net sales** | $1,625,204 | $1,747,599 | $5,173,997 | $4,764,121 | | **Operating income** | $178,369 | $268,331 | $790,898 | $779,842 | | **Net income attributable to Darling** | $125,026 | $191,081 | $563,210 | $581,130 | | **Diluted income per share** | $0.77 | $1.17 | $3.47 | $3.54 | [Consolidated Statements of Cash Flows](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For the nine months ended September 30, 2023, net cash provided by operating activities was **$682.3 million**, an increase from **$638.4 million** in the prior year, while net cash used in investing activities decreased to **$1.51 billion** from **$2.22 billion**, and net cash provided by financing activities was **$902.2 million**, down from **$1.68 billion** Cash Flow Summary (Nine Months Ended, in thousands USD) | Cash Flow Activity | Sep 30, 2023 | Oct 1, 2022 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $682,288 | $638,438 | | **Net cash used in investing activities** | $(1,506,634) | $(2,222,758) | | **Net cash provided by financing activities** | $902,150 | $1,682,900 | | **Net increase in cash** | $103,363 | $78,285 | [Notes to Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) This section provides detailed explanations of the company's accounting policies and further breakdowns of the figures presented in the main financial statements, covering investments in unconsolidated subsidiaries, recent acquisitions, debt structure, segment performance, and revenue disaggregation - The company corrected an out-of-period error related to the contingent consideration liability for the FASA Group acquisition, resulting in an **$85.1 million** reduction to goodwill and the contingent consideration liability[33](index=33&type=chunk)[34](index=34&type=chunk)[51](index=51&type=chunk) - The company's investment in the Diamond Green Diesel (DGD) Joint Venture is a significant contributor to earnings, with Darling's share of net income amounting to **$361.7 million** for the first nine months of 2023[42](index=42&type=chunk) - The company completed the acquisition of Gelnex, a global collagen producer, on March 31, 2023, for an initial purchase price of approximately **$1.2 billion**[45](index=45&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=45&type=section&id=Item%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management discusses the company's financial performance, segment results, liquidity, and capital resources, covering the third quarter and first nine months of 2023, with key themes including commodity price fluctuations, contributions from recent acquisitions, DGD joint venture performance, and changes in debt structure and liquidity [Results of Operations](index=47&type=section&id=Results%20of%20Operations) The company's operating income for Q3 2023 **decreased** by 33.5% year-over-year to **$178.4 million**, driven by lower performance in the Feed and Fuel Ingredients segments, while for the nine-month period, operating income increased slightly by 1.4% to **$790.9 million**, supported by strong performance from the Fuel Ingredients segment and growth in the Food Ingredients segment Segment Operating Income (in thousands USD) | Segment | Q3 2023 | Q3 2022 | Nine Months 2023 | Nine Months 2022 | | :--- | :--- | :--- | :--- | :--- | | **Feed Ingredients** | $78,271 | $117,881 | $313,375 | $406,225 | | **Food Ingredients** | $60,538 | $53,837 | $156,779 | $147,040 | | **Fuel Ingredients** | $65,169 | $119,197 | $402,551 | $294,694 | | **Total Segment Operating Income** | **$178,369** | **$268,331** | **$790,898** | **$779,842** | - The Feed Ingredients segment's operating income **decreased** in Q3 2023 primarily due to lower fat finished product prices and lower sales volumes[169](index=169&type=chunk) - The Food Ingredients segment's operating income **increased** due to higher sales volumes from the Gelnex acquisition[173](index=173&type=chunk) - The Fuel Ingredients segment's operating income **decreased** in Q3 due to a catalyst turnaround and an unexpected shutdown at a DGD plant, along with lower RIN and LCFS credit prices[176](index=176&type=chunk) [Non-U.S. GAAP Measures](index=53&type=section&id=Non-U.S.%20GAAP%20Measures) The company provides a reconciliation of Net Income to Adjusted EBITDA, a non-GAAP measure used by management to evaluate operating performance, with Darling's Adjusted EBITDA at **$247.8 million** for Q3 2023 and **$797.8 million** for the nine-month period, and Darling's share of the DGD Joint Venture's Adjusted EBITDA being a significant contributor Reconciliation of Net Income to Adjusted EBITDA (in thousands USD) | Metric | Q3 2023 | Q3 2022 | Nine Months 2023 | Nine Months 2022 | | :--- | :--- | :--- | :--- | :--- | | **Net income attributable to Darling** | $125,026 | $191,081 | $563,210 | $581,130 | | **Darling's Adjusted EBITDA** | **$247,845** | **$274,398** | **$797,814** | **$830,472** | | **DGD Joint Venture Adjusted EBITDA (Darling's Share)** | $86,450 | $120,333 | $463,171 | $297,503 | [Financing, Liquidity and Capital Resources](index=59&type=section&id=Financing%2C%20Liquidity%20and%20Capital%20Resources) As of September 30, 2023, the company had working capital of **$809.3 million** and availability of **$1.04 billion** under its revolving credit facility, with net cash from operations at **$682.3 million** for the first nine months, and capital expenditures of **$380.6 million** with an additional **$184 million** planned for the remainder of fiscal 2023 - The company had **$809.3 million** in working capital and **$1.04 billion** available under its revolving credit facility as of September 30, 2023[232](index=232&type=chunk) - Capital expenditures for the first nine months of 2023 were **$380.6 million**, with an additional **$184 million** planned for the rest of the year[234](index=234&type=chunk) - The DGD Joint Venture partners approved a capital project to upgrade the Port Arthur plant to produce Sustainable Aviation Fuel (SAF), with completion expected in 2025 at an estimated cost of **$315 million**[239](index=239&type=chunk) - The company repurchased approximately **$52.9 million** of its common stock in the first nine months of 2023, with **$321.6 million** remaining under its share repurchase program[247](index=247&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=69&type=section&id=Item%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) The company is exposed to market risks from changes in commodity prices, interest rates, and foreign currency exchange rates, which it manages using derivative instruments, including interest rate swaps, cross-currency swaps, and commodity options and forwards - The company uses **derivative instruments** to manage cash flow risks related to interest rates, commodity prices (natural gas, diesel fuel, soybean meal, corn), and foreign currency exchange rates[259](index=259&type=chunk) - In Q1 and Q2 2023, the company entered into interest rate swaps with a total notional amount of **$900.0 million** to hedge a portion of its variable rate debt into Q1 2026[261](index=261&type=chunk) - In Q1 2023, the company entered into cross-currency swaps with a notional amount of **€519.2 million** to hedge its intercompany notes receivable into Q1 2025[262](index=262&type=chunk) [Controls and Procedures](index=71&type=section&id=Item%204.%20CONTROLS%20AND%20PROCEDURES) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were **effective** as of September 30, 2023, with no material changes to internal control over financial reporting during the quarter, other than the ongoing integration of controls for recently acquired companies - The CEO and CFO concluded that the company's disclosure controls and procedures were **effective** as of the end of the reporting period[272](index=272&type=chunk) - The company is in the process of **integrating the Gelnex acquisition**, which was completed in Q1 2023, and is evaluating changes to internal controls as part of this process[274](index=274&type=chunk) [PART II: OTHER INFORMATION](index=73&type=section&id=PART%20II%3A%20OTHER%20INFORMATION) This section provides information on legal proceedings and risk factors relevant to the company's operations [Legal Proceedings](index=73&type=section&id=Item%201.%20LEGAL%20PROCEEDINGS) This section refers to Note 18 of the financial statements for information on legal proceedings, detailing that the company is party to various lawsuits and claims arising in the ordinary course of business and has established loss reserves it believes are reasonable and sufficient - Information regarding legal proceedings is **incorporated by reference** from Note 18 (Contingencies) of the financial statements[277](index=277&type=chunk) [Risk Factors](index=73&type=section&id=Item%201A.%20RISK%20FACTORS) The company states that there have been no material changes to the risk factors previously disclosed in its Annual Report on Form 10-K for the fiscal year ended December 31, 2022, and investors are advised to consider those factors - The company refers to its **Annual Report on Form 10-K** for the fiscal year ended December 31, 2022, for a detailed description of risk factors affecting the business[278](index=278&type=chunk)

Well, no, I think at the end of the day, what you see is this, there is not always a one-to-one correlation as fat goes up and fat goes down to Darling's core business profitability and Diamond's core business profitability. But what you have seen when we're producing 1.2 billion to 1.3 billion gallons out of Diamond Green Diesel, we've seen significant adjustments down in the feedstock price. And when you look at the combined vertical, what you see is extremely strong earnings, we anticipate that's going t ...

I don't know that we've ever -- weÂ've never put a synergy number out there. That business is spread out all over the United States in four or five different regions, so there was no expectations there. At the end of the day, we're running at where we thought we would be and we still believe we have some more upside there, as I said. So ultimately, we've done a lot of different things in that business from rightsizing people, rightsizing raw material procurement contracts or improving them, lowering energy ...

Darling Ingredients, Inc. (NYSE:DAR) Q4 2022 Earnings Conference Call February 28, 2023 9:00 AM ET Company Participants Suann Guthrie - SVP, IR & Sustainability and Global Communications Randall Stuewe - Chairman & CEO Brad Phillips - EVP & CFO Sandra Dudley - EVP, Renewables & U.S. Specialty Operations John Bullock - EVP & Chief Strategy Officer Conference Call Participants Derrick Whitfield - Stifel, Nicolaus & Company Adam Samuelson - Goldman Sachs Group Dushyant Ailani - Jefferies Thomas Palmer - JPMorg ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______ to _______ Commission File Number 001-13323 DARLING INGREDIENTS INC. (Exact name of registrant as specified in its charter) Delaware 36-2495346 (State or oth ...

Darling Ingredients Inc. (NYSE:DAR) Q3 2022 Earnings Conference Call November 9, 2022 9:00 AM ET Company Participants Suann Guthrie - Vice President, IR, Sustainability & Global Communications Randall Stuewe - Chairman & Chief Executive Officer Brad Phillips - Chief Financial Officer John Bullock - Chief Strategy Officer Sandra Dudley - Executive Vice President, Renewables & US Specialty Operations Conference Call Participants Adam Samuelson - Goldman Sachs Derrick Whitfield - Stifel Tom Palmer - JPMorgan K ...

Darling Ingredients Inc. (NYSE:DAR) Q2 2022 Earnings Conference Call August 10, 2022 9:00 AM ET Company Participants Suann Guthrie - VP, IR, Sustainability and Global Communications Randall Stuewe - Chairman and Chief Executive Officer Brad Phillips - CFO Sandra Dudley - EVP, Renewables and U.S. Specialty Operations John Bullock - CSO Conference Call Participants Adam Samuelson - Goldman Sachs Manav Gupta - Credit Suisse Ben Bienvenue - Stephens Tom Palmer - JPMorgan Ben Kallo - Baird Ken Zaslow - Bank of M ...

Financial Data and Key Metrics Changes - The company reported strong first-quarter earnings of $330.7 million and combined adjusted EBITDA [5] - Net income for Q1 2022 was $188.1 million or $1.14 per diluted share, compared to $151.8 million or $0.90 per diluted share in Q1 2021 [12] - Net sales increased by 30.5% to $1.37 billion in Q1 2022 from $1 billion in Q1 2021 [12] - Operating income rose by 16.7% to $232.9 million in Q1 2022, driven by a gross margin increase of $71.9 million or 26.2% [12][14] Business Line Data and Key Metrics Changes - The Global Ingredients business achieved a record EBITDA of $244.1 million [5] - The food segment earned $57.7 million in EBITDA, driven by the peptide business and a shift to hydrolyzed specialty collagens [6] - The fuel segment reported $110 million in EBITDA, with $86.6 million coming from Diamond Green Diesel [5] Market Data and Key Metrics Changes - Raw material volumes in the feed segment increased year-over-year, with fat prices continuing to escalate [6] - Protein prices improved sequentially during the quarter, although logistical disruptions kept prices lower year-over-year [6] - European energy prices rose by 250% year-over-year, impacting operational costs [15] Company Strategy and Development Direction - The company is focused on expanding its Green Energy business in Europe and diversifying feedstock supply for Diamond Green Diesel [15][16] - Strategic acquisitions, including Valley Proteins and FASA Group, are expected to enhance operational synergies and increase EBITDA contributions [9][10] - The company aims to process over 15 million metric tons of animal by-products globally, representing about 15% of the world's supply [9] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the business environment, citing robust rendering volumes and improved raw material availability [15] - The company is addressing rising energy costs and supply chain challenges while maintaining margin structures [6][15] - The forecast for combined adjusted EBITDA for 2022 is projected to be between $1.55 billion and $1.60 billion, excluding additional gallons from Diamond Green Diesel 3 [17] Other Important Information - Total debt at the end of Q1 2022 was $1.7 billion, up from $1.5 billion at year-end 2021, primarily due to acquisitions [14] - The company repurchased $17.2 million of common stock in Q1 2022 [14] - The effective tax rate for Q1 2022 was 12%, with projections for an 18% effective tax rate for the remainder of the year [13] Q&A Session Summary Question: Future growth prospects for Darling Ingredients - Management highlighted a four-legged growth strategy focusing on Green Electricity, Diamond Green Diesel, food segment expansion, and core ingredients business [20][24] Question: R&D efforts and innovation pipeline - The company emphasized its expertise in transforming by-products into valuable products and has a robust innovation pipeline [28][29] Question: Leverage and cash flow management - Management discussed plans to maintain sub-three leverage while balancing growth investments, share buybacks, and potential dividends [30][50] Question: DGD's economics and feedstock sourcing - Management noted that DGD is pulling feedstocks from Brazil and expects to continue sourcing globally to support renewable diesel growth [66]

Darling Ingredients Inc. (NYSE:DAR) Q4 2021 Earnings Conference Call March 1, 2022 9:00 AM ET Company Representatives Randall Stuewe - Chairman, Chief Executive Officer Brad Phillips - Chief Financial Officer John Bullock - Chief Strategy Officer Sandra Dudley - Executive Vice President of Renewables and U.S. Specialty Operations Suann Guthrie - VP, Investor Relations, Sustainability & Communications Conference Call Participants Manav Gupta - Credit Suisse Ben Bienvenue - Stephens Adam Samuelson - Goldman S ...