Financial Data and Key Metrics Changes - The company reported $92.5 million of adjusted EBITDA for Q3 2025, marking the strongest quarter in several years [21] - Operating costs were reduced by $24 million compared to the same quarter last year, with a year-to-date reduction of $60 million [5][21] - The company reduced its restricted group debt by over $40 million during the quarter [21] Business Line Data and Key Metrics Changes - The specialty products and solutions segment generated $80.2 million of adjusted EBITDA, with production volume gains of 8% compared to the prior year [23] - The Montana Renewables segment generated adjusted EBITDA with tax attributes of $17.1 million, an increase from $14.6 million in the prior year [26] - The performance brand segment remained flat year-over-year despite the divestment of the Royal Purple Industrial Business [25] Market Data and Key Metrics Changes - The industry saw weakness in renewable diesel margins, with realized margins lower than the normal index margin formula [9] - Biomass-based diesel production remains cut back at roughly 60% utilization, with industry production volumes stabilizing just above 350 million gallons a month [10] - European SAF prices increased approximately 60% over the past six months, indicating a tightening market [19] Company Strategy and Development Direction - The company is on track for its max SAF expansion in the first half of 2026, with approximately 75% of the expanded volume either contracted or in the final review process [12][14] - The focus remains on driving operational improvements and reducing costs per barrel, with a strategic priority on deleveraging [21][24] - The company aims to leverage its integrated model to optimize crude slate and product deals, capturing market opportunities [24] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the recovery in the renewable diesel market, anticipating improved margins once the RVO is finalized [38] - The company is confident in its ability to navigate feedstock volatility and expects to benefit from a strong operational environment in 2026 [41] - Management highlighted the importance of regulatory clarity and the potential for increased demand in the SAF market [28][19] Other Important Information - The company successfully monetized $25 million of PTCs during the quarter, with expectations for further monetization at improving price levels [22][27] - An error in the reported Q1 and Q2 2025 cash flow statements will result in an approximate $80 million increase to cash flows from operations for the first quarter [20] Q&A Session Summary Question: What are the gating items for the max SAF expansion? - Management indicated that there are very few gating items, with some tactical constraint removals planned during the scheduled turnaround [31] Question: Can you discuss the off-take agreements for SAF? - Management stated that they are well above halfway through signing customers for the increased SAF production, with a mix of executed and in-service contracts [32][33] Question: What is the primary feedstock being used for Montana Renewables? - Management explained that they utilize a dynamic approach to feedstock, broadly using one-third vegetable oil, one-third corn oil, and one-third tallow and cooking oils [36] Question: How does the small refinery exemption impact financials? - Management noted that they have reduced their outstanding RIN obligation by over $320 million due to favorable rulings on small refinery exemptions [40] Question: What are the expectations for monetizing PTCs? - Management expects to monetize PTCs closer to 95% over time, with initial monetizations around 90% [46]

Financial Data and Key Metrics Changes - The combined adjusted EBITDA for the third quarter was $245 million, compared to $237 million in Q3 2024 and $250 million in the previous quarter [10] - Total net sales for the quarter were $1.6 billion, up from $1.4 billion year-over-year [10] - Gross margins improved to 24.7% for the quarter, compared to 22.1% last year [10][15] - Overall net income was $19.4 million for the quarter, or $0.12 per diluted share, compared to $16.9 million, or $0.11 per diluted share for Q3 2024 [16] Business Line Data and Key Metrics Changes - In the feed segment, EBITDA improved to $174 million from $132 million a year ago, with total sales of $1 billion versus $928 million [10] - The food segment saw total sales of $381 million, higher than $357 million in Q3 2024, with gross margins at 27.5% compared to 23.9% a year ago [11] - The fuel segment, specifically Diamond Green Diesel (DGD), reported a negative EBITDA of $3 million for the quarter, down from positive $39 million in Q3 2024 [12] Market Data and Key Metrics Changes - Global rendering volumes and margins were up both sequentially and year-over-year, driven by strong demand for fats and proteins [6] - In the U.S., robust demand for domestic fats supported by strong agriculture and energy policy helped boost revenue and margins [8] - Export protein demand is showing signs of recovery, with slightly firmer pricing trends emerging [8] Company Strategy and Development Direction - The company is focused on its core ingredients business, expecting EBITDA for 2025 to be in the range of $875 to $900 million, excluding DGD [17] - The management believes that the integrated model of Darling Ingredients provides a competitive advantage that is unmatched in the industry [5] - The company anticipates a shift in public policy that will strengthen American agriculture and energy leadership, which is expected to enhance DGD's earnings potential [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the core ingredients business despite short-term challenges in the renewables market [5] - There is optimism regarding the resolution of regulatory uncertainties, particularly around the Renewable Volume Obligation (RVO) [22] - The management highlighted that the current uncertainty around public policy impacts the fuel segment, leading to a cautious outlook [17][64] Other Important Information - The company recorded an income tax benefit of $1.2 million for the quarter, yielding an effective tax rate of -6.3% [16] - Total debt net of cash was $4.01 billion, with expectations for a decrease by year-end as cash is generated from the core business [15] Q&A Session Summary Question: Timeline for clarity on regulatory items like RVO - Management expects clarity on RVO and related regulatory items by December, despite the government shutdown [22] Question: Outlook for feed segment in Q4 - Management indicated that while waste fat prices have dipped, they expect the food segment to be stronger in Q4, potentially meeting guidance [24] Question: Benefits of REMS policy protectionism on feed side - Management noted that the treatment of foreign feedstocks is still unclear, and the overall supply and demand for fats and oils will influence the feed business [28] Question: Factors driving improvement in feed segment margins - Management highlighted improved feedstock prices and strong demand for protein products as key drivers for margin improvement [42] Question: RIN pricing scenarios and industry outlook - Management indicated that RIN prices may need to increase by approximately $0.40 to incentivize production to meet mandates for 2026 [50] Question: Restarting DGD1 - Management stated that DGD1 will only restart when soybean oil margins are profitable enough to justify the costs [79] Question: Outlook for food segment - Management expects a stronger Q4 for the food segment, driven by a rebound in hydrolyzed collagen business and new product launches [82]

Financial Data and Key Metrics Changes - The company reported adjusted EBITDA of $76.5 million for Q2 2025, with $8.3 million generated from Montana Renewables, indicating strong performance despite a full month turnaround at the Shreveport facility [5][10][28] - Operating costs were reduced by $42 million in the first half of 2025 compared to the same period in 2024, despite a $7 million increase in natural gas and electricity costs [8][24] - Specialty product margins increased to over $66 per barrel, reflecting improved operational efficiency [24][30] Business Line Data and Key Metrics Changes - The Specialty Products and Solutions segment generated $66.8 million of adjusted EBITDA, with sales volume exceeding 20,000 barrels per day for the third consecutive quarter [24][26] - The Performance Brands segment reported $13.5 million in adjusted EBITDA, driven by strong volume growth, particularly in the TruFuel brand [27] - Montana Renewables segment adjusted EBITDA with tax attributes was $16.3 million, up from $8.7 million in the prior year, showcasing resilience in a challenging market [28][29] Market Data and Key Metrics Changes - The renewable diesel industry is currently facing low quarterly index margins, but Montana Renewables managed to generate positive adjusted EBITDA due to its competitive advantages [10][14] - The proposed Renewable Volume Obligation (RVO) for 2026 is expected to increase demand for biomass-based diesel, potentially leading to improved margins [19][20][76] Company Strategy and Development Direction - The company is focused on deleveraging and managing its debt, with a target of reaching $800 million in restricted group debt [22][40] - The MAX SAF 150 project is on track to start in 2026, aiming to produce 120 million to 150 million annual gallons of sustainable aviation fuel (SAF) [12][31] - The company is actively pursuing monetization of production tax credits, with expectations of completing these transactions in the near future [66][91] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term outlook for the renewable diesel market, anticipating margin recovery as regulatory clarity improves [73][76] - The company is optimistic about the potential for increased production and improved margins in 2026, contingent on the finalization of the RVO [19][76] Other Important Information - The company has successfully reduced operational costs and improved efficiency, with a focus on water treatment and operational learning [46][48] - The company does not expect tariffs to significantly impact its specialties business due to its U.S.-based manufacturing and supply chain [27] Q&A Session Summary Question: What are the updated thoughts on mid-cycle earnings for renewable diesel? - Management indicated that mid-cycle earnings could return to historical levels of $1.50 to $2.00 per gallon index margin, with potential adjusted EBITDA of $140 million to $150 million at $1.50 margins [35][36] Question: Can you discuss the path to further debt pay down and potential future divestitures? - Management highlighted that they have made significant progress on debt reduction and are considering strategic asset sales as part of their deleveraging strategy [39][40] Question: What types of improvements have driven cost reductions in operations? - Management noted that significant improvements in water treatment and operational efficiency have contributed to reduced costs [46][48] Question: How does the company view the attractiveness of different regions for SAF? - Management emphasized the flexibility to serve various markets, including the Midwest and California, and highlighted the potential for partnerships in Canada [50][54] Question: What is the status of PTC monetization? - Management confirmed that they are in the process of finalizing term sheets for PTCs and expect to complete these transactions soon [66][91]