Financial Data and Key Metrics Changes - For Q2 2024, net income totaled $78.9 million or $0.49 per diluted share, compared to $252.4 million or $1.55 per diluted share for Q2 2023 [39][152] - Net sales were $1.5 billion for Q2 2024, down from $1.8 billion in Q2 2023 [39][152] - Combined EBITDA for the quarter was $273.6 million, slightly lower sequentially, but showed improvement in the core ingredients business [13] - Operating income decreased to $285.7 million for the first six months of 2024, down from $612.5 million for the same period in 2023, primarily due to a decline in equity earnings from Diamond Green Diesel [16][152] Business Segment Data and Key Metrics Changes - The Feed Ingredients segment saw strong global raw material volumes and improved fat pricing, leading to sequential improvement in margins [9] - The Fuel segment, particularly Diamond Green Diesel, faced margin challenges due to regulatory uncertainties, but demand for products remained robust [14] - The Food segment, particularly the Rousselot business, is beginning to see signs of customer destocking slowing, indicating potential for improved demand [37] Market Data and Key Metrics Changes - Global fat pricing is on the rise, indicating increased demand for low carbon intensity feedstocks for renewable diesel [9] - The company anticipates that the implementation of the 45Z tax credit will occur by January 1, 2025, which could impact market dynamics [30][83] Company Strategy and Development Direction - The company is focused on managing capital outflows, paying down debt, and improving operational excellence to widen margins [43] - There is optimism regarding improved pricing in the second half of the year, which is expected to positively impact Q3 and Q4 earnings [43] - The Sustainable Aviation Fuel unit is on track for startup in Q4 2024, with ongoing efforts to build a strong sales book [38] Management's Comments on Operating Environment and Future Outlook - Management noted the challenges posed by a deflationary and volatile global ingredients market, but expressed confidence in the team's ability to adapt [12] - The company remains optimistic about achieving $1.3 billion to $1.4 billion of combined adjusted EBITDA for the year [43] - Management highlighted the importance of customer demand and the evolving regulatory landscape as key factors influencing future performance [90][116] Other Important Information - The company paid down $51 million of debt in Q2 2024, with total debt outstanding at $4.409 billion [18] - Capital expenditures totaled $98 million in Q2 2024, with share repurchases amounting to approximately $29.2 million [42] Q&A Session Summary Question: What is the view on supply and demand dynamics for SAF going into 2025? - Management indicated that the SAF picture is evolving with strong interest in compliance as European regulations come online in 2025 [22] Question: Can you provide insights on margin expectations for the second half? - Management expects improved margins across all segments due to recent price movements and cost management efforts [27] Question: How will the transition from BTC to 45Z impact operations? - Management believes they can manage risks better than the rest of the market, anticipating better renewable diesel margins as the year progresses [81] Question: What is the outlook for dividends from DGD? - Management is optimistic about additional distributions from DGD in the second half of the year, contributing to debt reduction efforts [93] Question: What caused the decline in EBITDA for the Food segment? - Management noted pricing pressure and destocking challenges but remains optimistic about demand recovery in the back half of the year [104]

Shares of Darling have returned +3.1% over the past month versus the Zacks S&P 500 composite's -0.3% change. The stock currently has a Zacks Rank #3 (Hold), indicating that it could perform in line with the broader market in the near term. As these metrics influence top- and bottom-line performance, comparing them to the year-ago numbers and what analysts estimated helps investors project a stock's price performance more accurately. The reported revenue compares to the Zacks Consensus Estimate of $1.46 bill ...

This 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," "potential," "possible," "p ...

This quarterly report represents an earnings surprise of 25.64%. A quarter ago, it was expected that this producer of natural ingredients from edible and inedible bionutrients would post earnings of $0.40 per share when it actually produced earnings of $0.50, delivering a surprise of 25%. Darling, which belongs to the Zacks Food - Miscellaneous industry, posted revenues of $1.46 billion for the quarter ended June 2024, missing the Zacks Consensus Estimate by 0.24%. This compares to year-ago revenues of $1.7 ...

[Second Quarter 2024 Financial Highlights](index=1&type=section&id=Second%20Quarter%202024%20Results) [Overall Performance](index=1&type=section&id=Overall%20Performance) Darling Ingredients reported significant year-over-year declines in Q2 and H1 2024 net income and sales, primarily due to lower fat prices and reduced DGD earnings, yet reaffirmed full-year guidance Q2 & H1 2024 Key Financial Metrics (YoY Comparison) | Metric | Q2 2024 | Q2 2023 | Change | H1 2024 | H1 2023 | Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Net Sales | $1.5B | $1.8B | -16.7% | $2.9B | $3.5B | -17.1% | | Net Income | $78.9M | $252.4M | -68.7% | $160.0M | $438.2M | -63.5% | | Diluted EPS | $0.49 | $1.55 | -68.4% | $0.99 | $2.69 | -63.2% | | Combined Adj. EBITDA | $273.6M | $508.3M | -46.2% | $553.7M | $926.7M | -40.3% | - The primary reasons for the decline in net income were a sharp year-over-year decrease in fat prices and lower earnings from the Diamond Green Diesel (DGD) segment[4](index=4&type=chunk) - Diamond Green Diesel (DGD) sold **311.5 million gallons** of renewable diesel in Q2 2024, generating an average EBITDA of **$0.49 per gallon**[6](index=6&type=chunk) [Management Commentary](index=1&type=section&id=Management%20Commentary) Management noted sequential improvement in specialty ingredients despite deflation, focusing on debt reduction and cost-cutting to widen margins, anticipating improved fat prices to benefit later quarters - The specialty ingredients business demonstrated sequential improvement after making necessary changes to enhance margins and earnings[5](index=5&type=chunk) - The Port Arthur facility completed a major turnaround in preparation for producing sustainable aviation fuel (SAF) later in 2024[5](index=5&type=chunk) - The company's focus for the rest of the year is on paying down debt and widening margins through effective cost-cutting measures[5](index=5&type=chunk) [Financial Position and Capital Allocation](index=1&type=section&id=Financial%20Position%20and%20Capital%20Allocation) As of June 29, 2024, the company held **$121.6 million** in cash and **$4.4 billion** in total debt, actively repurchasing stock and refreshing its **$500 million** share repurchase program until August 2026 Financial Position as of June 29, 2024 | Metric | Value | | :--- | :--- | | Cash and cash equivalents | $121.6 million | | Available Revolving Credit | $814.4 million | | Total Debt Outstanding | $4.4 billion | | Projected Leverage Ratio | 4.24x | - The company repurchased approximately **807,000 shares** for **$29.2 million** during the second quarter of 2024[7](index=7&type=chunk) - On June 21, 2024, the Board of Directors refreshed the share repurchase program back to an aggregate amount of **$500 million** and extended it until August 13, 2026[7](index=7&type=chunk) [Fiscal Year 2024 Guidance](index=1&type=section&id=Fiscal%20Year%202024%20Guidance) Darling Ingredients reaffirmed its full-year 2024 guidance for combined adjusted EBITDA - The company reaffirms its fiscal year 2024 guidance for combined adjusted EBITDA to be between **$1.3 billion** and **$1.4 billion**[9](index=9&type=chunk) [Financial Statements](index=2&type=section&id=Financial%20Statements) [Consolidated Operating Results (Income Statement)](index=4&type=section&id=Consolidated%20Operating%20Results) Consolidated income statement shows significant year-over-year declines in net sales and profitability for Q2 and H1 2024, driven by lower sales and reduced DGD equity income Consolidated Operating Results (in thousands) | Metric | Q2 2024 | Q2 2023 | H1 2024 | H1 2023 | | :--- | :--- | :--- | :--- | :--- | | Net Sales | $1,455,292 | $1,757,621 | $2,875,591 | $3,548,793 | | Operating Income | $148,502 | $356,684 | $285,671 | $612,529 | | Equity in Net Income of DGD | $44,197 | $212,964 | $122,616 | $307,301 | | Net Income Attributable to Darling | $78,866 | $252,383 | $160,023 | $438,184 | | Diluted EPS | $0.49 | $1.55 | $0.99 | $2.69 | [Segment Performance](index=2&type=section&id=Segment%20Performance) All Feed, Food, and Fuel Ingredients segments experienced year-over-year declines in Q2 and H1 2024 net sales and profitability, with Fuel Ingredients most impacted by lower DGD contributions [Feed Ingredients](index=2&type=section&id=Feed%20Ingredients) Feed Ingredients Performance (in thousands) | Metric | Q2 2024 | Q2 2023 | H1 2024 | H1 2023 | | :--- | :--- | :--- | :--- | :--- | | Net Sales | $934,147 | $1,141,661 | $1,823,995 | $2,379,155 | | Segment EBITDA | $122,056 | $187,520 | $228,865 | $400,593 | [Food Ingredients](index=2&type=section&id=Food%20Ingredients) Food Ingredients Performance (in thousands) | Metric | Q2 2024 | Q2 2023 | H1 2024 | H1 2023 | | :--- | :--- | :--- | :--- | :--- | | Net Sales | $378,841 | $476,093 | $770,123 | $872,485 | | Segment EBITDA | $73,200 | $71,312 | $134,887 | $144,488 | [Fuel Ingredients](index=2&type=section&id=Fuel%20Ingredients) Fuel Ingredients Performance (in thousands) | Metric | Q2 2024 | Q2 2023 | H1 2024 | H1 2023 | | :--- | :--- | :--- | :--- | :--- | | Net Sales | $142,304 | $139,867 | $281,473 | $297,153 | | Combined Adjusted EBITDA | $96,767 | $270,165 | $229,911 | $423,760 | [Balance Sheet Highlights](index=5&type=section&id=Balance%20Sheet%20Highlights) As of June 29, 2024, the balance sheet shows slight decreases in cash and total debt compared to year-end 2023, with H1 capital expenditures totaling **$191.7 million** Balance Sheet Data (in thousands) | Account | June 29, 2024 | December 30, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $121,587 | $126,502 | | Property, plant and equipment, net | $2,840,682 | $2,935,185 | | Total Debt (Current + Long-term) | $4,409,387 | $4,427,073 | - Year-to-date capital expenditures as of June 29, 2024, were **$191.7 million**[18](index=18&type=chunk) [Diamond Green Diesel (DGD) Joint Venture Performance](index=6&type=section&id=Diamond%20Green%20Diesel%20Joint%20Venture%20Performance) [DGD Operating Results](index=6&type=section&id=DGD%20Operating%20Results) DGD joint venture experienced substantial declines in Q2 and H1 2024 operating results, with significantly lower revenues and net income reflecting challenging commodity prices DGD Operating Results (in thousands) | Metric | Q2 2024 | Q2 2023 | H1 2024 | H1 2023 | | :--- | :--- | :--- | :--- | :--- | | Operating Revenues | $1,184,076 | $2,246,111 | $2,595,191 | $3,926,161 | | Operating Income | $91,373 | $436,481 | $256,204 | $636,520 | | Net Income | $88,394 | $425,928 | $245,232 | $614,602 | - Darling's 50% share of DGD's adjusted EBITDA for Q2 2024 was **$76.6 million**, down from **$247.4 million** in Q2 2023[11](index=11&type=chunk) [DGD Balance Sheet](index=8&type=section&id=DGD%20Balance%20Sheet) DGD joint venture's balance sheet shows slight increases in total assets and members' equity, alongside a decrease in total debt from year-end 2023 to June 30, 2024 DGD Balance Sheet Data (in thousands) | Account | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Total Assets | $5,860,533 | $5,805,927 | | Total Debt (Current + Long-term) | $751,597 | $1,015,736 | | Total Members' Equity | $4,687,657 | $4,355,277 | [Non-GAAP Financial Measures](index=10&type=section&id=Non-GAAP%20Financial%20Measures) [Reconciliation of Net Income to Adjusted EBITDA](index=10&type=section&id=Reconciliation%20of%20Net%20Income%20to%20Adjusted%20EBITDA) The company reconciles GAAP Net Income to non-GAAP Adjusted EBITDA, with Q2 2024 Adjusted EBITDA at **$196.9 million** and Combined Adjusted EBITDA at **$273.6 million**, both significantly lower year-over-year Reconciliation to Combined Adjusted EBITDA (in thousands) | Metric | Q2 2024 | Q2 2023 | H1 2024 | H1 2023 | | :--- | :--- | :--- | :--- | :--- | | Net income attributable to Darling | $78,866 | $252,383 | $160,023 | $438,184 | | Adjusted EBITDA (Non-GAAP) | $196,918 | $260,909 | $361,982 | $549,969 | | DGD Joint Venture Adjusted EBITDA (Darling's share) | $76,642 | $247,398 | $191,702 | $376,721 | | **Combined Adjusted EBITDA** | **$273,560** | **$508,307** | **$553,684** | **$926,690** | [Definitions of Non-GAAP Measures](index=10&type=section&id=Definitions%20of%20Non-GAAP%20Measures) The company defines non-GAAP measures like Adjusted EBITDA and DGD Adjusted EBITDA to evaluate operating performance, noting that forward-looking reconciliation to net income is not feasible due to unpredictability - Adjusted EBITDA is presented as a measure of operating performance and is calculated by adjusting net income for items like depreciation, interest, taxes, and other specified charges[30](index=30&type=chunk) - DGD Joint Venture Adjusted EBITDA (Darling's share) is calculated by taking DGD's operating income plus its depreciation, amortization, and accretion expense, and then multiplying by 50%[40](index=40&type=chunk) - The company cannot provide a reconciliation of its forward-looking combined adjusted EBITDA guidance to net income without unreasonable effort due to the unpredictability of certain items[41](index=41&type=chunk) [Other Information](index=10&type=section&id=Other%20Information) [About Darling Ingredients & Conference Call](index=10&type=section&id=About%20Darling%20Ingredients%20%26%20Conference%20Call) Darling Ingredients transforms by-products into valuable ingredients for feed, food, and renewable energy, and held a conference call on July 25, 2024, to discuss Q2 results - Darling Ingredients operates over **260 facilities** in more than **15 countries**, processing about **15%** of the world's animal agricultural by-products[27](index=27&type=chunk) - A conference call to discuss Q2 2024 financial results was scheduled for Thursday, July 25, 2024, at 9 a.m. Eastern Time[34](index=34&type=chunk) [Forward-Looking Statements](index=12&type=section&id=Forward-Looking%20Statements) This report contains forward-looking statements, with actual results potentially differing due to risks like commodity price volatility, renewable fuel regulations, raw material availability, and DGD joint venture risks - Forward-looking statements are based on current expectations and are not guarantees of future performance[45](index=45&type=chunk) - Key risk factors include reduced demand or prices for biofuels, volatility in grain and oilseed commodities, changes in government policies like the renewable fuel standard (RFS), and operational risks at the DGD Joint Venture[46](index=46&type=chunk)

Second Quarter 2024 Net income of $78.9 million, or $0.49 per GAAP diluted share Net sales of $1.5 billion Combined adjusted EBITDA of $273.6 million Repurchased $29.2 million of common stock Received $77.1 million in cash dividends from Diamond Green Diesel on July 18, 2024 IRVING, Texas, July 25, 2024 /PRNewswire/ -- Darling Ingredients Inc. (NYSE: DAR) today reported net income of $78.9 million, or $0.49 per diluted share for the second quarter of 2024, compared to net income of $252.4 million, or $1.55 ...

Wall Street expects a year-over-year decline in earnings on lower revenues when Darling Ingredients (DAR) reports results for the quarter ended June 2024. While this widely-known consensus outlook is important in gauging the company's earnings picture, a powerful factor that could impact its near-term stock price is how the actual results compare to these estimates. While management's discussion of business conditions on the earnings call will mostly determine the sustainability of the immediate price chang ...

To join the call as a participant to ask a question, please register in advance to receive a confirmation email with the dial-in number and PIN for immediate access on July 25, 2024, or call 844-868-8847 (United States) or 412- 317-6593 (International) and ask for "The Darling Ingredients Call" that day. A pioneer in circularity, Darling Ingredients Inc. (NYSE: DAR) takes material from the animal agriculture and food industries, and transforms them into valuable ingredients that nourish people, feed animals ...

Volatility has increased on Wall Street while tech stocks are taking a breather. As a result, many investors are eyeing value stocks to buy, which may hold considerable potential for future returns. Research indicates that value stocks often outperform both the market average and growth stocks during downturns, offering stability amid market volatility. Although they may not promise rapid growth as some tech stocks, value stocks typically provide consistent returns over time. Furthermore, Goldman Sachs sugg ...

IRVING, Texas, June 5, 2024 /PRNewswire/ -- Darling Ingredients Inc. (NYSE: DAR), the world's leading company turning food waste into sustainable products and producer of renewable energy, today announced that it plans to reduce emissions from its wastewater treatment plants at some of its rendering facilities by capturing biogas and converting it to renewable natural gas (RNG) in partnership with GreenGasUSA. The initial plan is to start with five Darling Ingredients plants in the United States with the op ...