Darling Ingredients(DAR) - 2025 Q2 - Quarterly Results

Darling Ingredients Inc. Second Quarter 2025 Results Financial and Operational Highlights Darling Ingredients reported a significant drop in Q2 2025 net income to $12.7 million, primarily due to lower DGD earnings, with net sales flat at $1.5 billion Q2 & H1 2025 Key Financial Metrics | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Sales | $1.5 billion | $1.5 billion | $2.9 billion | $2.9 billion | | Net Income/(Loss) | $12.7 million | $78.9 million | ($13.5 million) | $160.0 million | | Diluted EPS | $0.08 | $0.49 | ($0.09) | $0.99 | | Combined Adj. EBITDA | $249.5 million | $273.6 million | $445.3 million | $553.7 million | - The company's 2025 outlook for Combined Adjusted EBITDA has been revised to $1.05-$1.10 billion, citing uncertainty around small refinery exemptions and its impact on RIN pricing[7] - Strategic initiatives in Q2 included a successful debt refinancing to lock in borrowing costs and the launch of Nextida, a new joint venture aimed at accelerating growth in the global collagen business for health and wellness markets[4] Financial Position as of June 28, 2025 | Metric | Value | | :--- | :--- | | Cash and cash equivalents | $95.0 million | | Total debt outstanding | $3.98 billion | | Revolver availability | $1.27 billion | | Preliminary Leverage Ratio | 3.34x | Consolidated Financial Statements Consolidated financial statements reveal a significant decline in Q2 and H1 2025 profitability, primarily due to reduced DGD equity income Consolidated Statements of Operations Q2 2025 operating income fell to $75.9 million, driven by a sharp decrease in DGD equity income to $6.0 million Consolidated Statement of Operations Highlights (in thousands) | Account | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | Total net sales | $1,481,518 | $1,455,292 | $2,862,112 | $2,875,591 | | Operating income | $75,868 | $148,502 | $104,268 | $285,671 | | Equity in net income of DGD | $6,000 | $44,197 | ($24,523) | $122,616 | | Net income/(loss) attributable to Darling | $12,661 | $78,866 | ($13,499) | $160,023 | Balance Sheet Disclosures As of June 28, 2025, the company held $94.6 million in cash, with total debt at $3.98 billion and $1.27 billion revolver availability Key Balance Sheet Data (in thousands) | Account | June 28, 2025 | December 28, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $94,577 | $75,973 | | Property, plant and equipment, net | $2,786,827 | $2,713,669 | | Current portion of long-term debt | $51,637 | $133,020 | | Long-term debt, net of current portion | $3,928,689 | $3,908,978 | Segment Performance Q2 2025 saw improved Feed Ingredients profitability, stable Food Ingredients, and a significant decline in Fuel Ingredients due to lower DGD contribution Feed Ingredients Feed Ingredients segment reported a Q2 2025 Adjusted EBITDA increase to $135.9 million, despite relatively flat net sales Feed Ingredients Performance (in thousands) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | Total net sales | $936,532 | $934,147 | $1,832,815 | $1,823,995 | | Segment operating income | $39,900 | $68,734 | $60,911 | $113,223 | | Segment Adjusted EBITDA | $135,902 | $122,056 | $246,484 | $228,865 | Food Ingredients Food Ingredients segment's Q2 2025 Adjusted EBITDA slightly decreased to $69.9 million, with modest net sales increase Food Ingredients Performance (in thousands) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | Total net sales | $386,142 | $378,841 | $735,382 | $770,123 | | Segment operating income | $42,555 | $45,828 | $83,925 | $78,647 | | Segment Adjusted EBITDA | $69,946 | $73,200 | $140,878 | $134,887 | Fuel Ingredients Fuel Ingredients' Q2 2025 Combined Adjusted EBITDA dropped significantly to $61.3 million due to lower DGD contribution Fuel Ingredients Performance (in thousands) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | Total net sales | $158,844 | $142,304 | $293,915 | $281,473 | | Segment operating income/(loss) | $15,876 | $55,599 | ($5,045) | $143,435 | | DGD Adj. EBITDA (Darling's Share) | $42,648 | $76,642 | $48,683 | $191,702 | | Combined Adjusted EBITDA | $61,287 | $96,767 | $85,513 | $229,911 | Diamond Green Diesel (DGD) Joint Venture Performance DGD joint venture experienced a sharp decline in Q2 2025 net income to $16.3 million, driving Darling's overall earnings decrease DGD Operational Metrics | Metric | Q2 2025 | YTD 2025 | | :--- | :--- | :--- | | Renewable Fuel Sold (million gallons) | 248.6 | 467.8 | | Average EBITDA per gallon | $0.36 | $0.22 | DGD Statement of Operations DGD's Q2 2025 operating revenues decreased to $1.10 billion, with Adjusted EBITDA falling to $89.6 million DGD Statement of Operations Highlights (in thousands) | Account | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | Operating revenues | $1,097,831 | $1,184,076 | $1,997,740 | $2,595,191 | | Operating income/(loss) | $28,102 | $91,373 | ($25,563) | $256,204 | | Net income/(loss) | $16,334 | $88,394 | ($42,974) | $245,232 | | DGD Adjusted EBITDA | $89,631 | $153,283 | $103,438 | $383,404 | DGD Balance Sheet As of June 30, 2025, DGD had total assets of $5.38 billion, total debt of $822 million, and cash decreased to $163.8 million DGD Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash | $163,846 | $353,446 | | Total assets | $5,384,440 | $5,460,517 | | Total long term debt (incl. current) | $722,232 | $736,967 | | Total members' equity | $4,279,107 | $4,386,667 | Non-GAAP Reconciliations and Disclosures This section details non-GAAP financial measures and cautionary statements regarding forward-looking information and significant risk factors - The company uses non-GAAP measures like Segment Adjusted EBITDA and Combined Adjusted EBITDA to evaluate operating performance by excluding items like depreciation, interest, taxes, and other non-recurring or non-cash charges[28][32] - The report includes forward-looking statements that are not guarantees of future performance and are subject to numerous risks and uncertainties[37] - Key risk factors identified include: volatility in biofuel and commodity prices, changes in government regulations (e.g., renewable fuel standards), raw material availability, risks associated with the DGD joint venture, and international trade barriers[38][39]