Darling Ingredients Inc. Reports Fourth Quarter And Fiscal Year 2020 Financial Results

IRVING, Texas, March 5, 2021 /PRNewswire/ -- Darling Ingredients Inc. (NYSE: DAR, "Darling") --

Fourth Quarter 2020

• Net income of $44.7 million, or $0.27 per GAAP diluted share
• Adjusted net income of $75.3 million, or $0.45 per diluted share, excluding the $30.6 million after-tax restructuring and asset impairment charge related to the shutdown of the company's biodiesel plants in Montreal, Quebec and Butler, Kentucky
• Net Sales of $1.0 billion
• Combined adjusted EBITDA of $214.5 million
• Global Ingredients business record Q4 EBITDA of $146.3 million

Fiscal Year 2020

• Net income of $296.8 million, or $1.78 per GAAP diluted share
• Adjusted net income of $327.4 million, or $1.96 per diluted share, excluding the $30.6 million after-tax restructuring and asset impairment charge related to the shutdown of the company's biodiesel plants in Montreal, Quebec and Butler, Kentucky
• Net Sales of $3.6 billion
• Combined adjusted EBITDA of $841.5 million
• Global Ingredients business FY 2020 EBITDA of $504.2 million
• Diamond Green Diesel sold a record 288 million gallons of renewable diesel at an average of $2.34 EBITDA per gallon

Darling reported net sales of $1.0 billion for the fourth quarter of 2020, as compared with net sales of $859.4 million for the same period a year ago.  Net income attributable to Darling for the three months ended January 2, 2021 was $44.7 million, or $0.27 per diluted share, compared to a net income of $242.6 million, or $1.44 per diluted share, for the fourth quarter of 2019. Excluding the restructuring and asset impairment charge related to the shutdown of the company's 2 biodiesel locations, adjusted net income for the three months ended January 2, 2021 was $75.3 million, or $0.45 per diluted share. The results for the three months ending December 28, 2019 included retroactive blenders tax credit (BTC) for 2018 and all of 2019. Adjusted net income for the fourth quarter 2019, excluding the retroactive BTC of 2018 and the first three quarters of 2019, was $50.1 million, or $0.30 per diluted share.   

"Our global ingredients business performed well in the fourth quarter of 2020 generating $146.3 million of EBITDA," said Randall C. Stuewe, Chairman and Chief Executive Officer of Darling Ingredients Inc. "We made the decision to shutdown operations of our two biodiesel plants due to unfavorable biodiesel industry economics and there are no current plans to resume biodiesel production at these facilities in the future. The closure of the facilities will create additional feedstock for growth of renewable diesel in our DGD Joint Venture."

"DGD met our expectation for 2020 selling 288 million gallons of renewable diesel at an average of $2.34 EBITDA per gallon," Stuewe added. "The earnings of DGD have been consistent and steady over the last three years and based on the current environment, we believe that DGD should generate around $2.25 EBITDA per gallon for 2021. Also, we anticipate the startup of the 400 million gallon expansion in Norco, LA to commission in the fourth quarter, potentially adding some capacity to finish out the year," Stuewe added.

The leverage ratio as measured by the company's bank covenant was 1.90x at the end of the year. The company reduced its Term Loan B outstanding balance by  $195 million during 2020. Capital expenditures totaled approximately $280 million for all of 2020, down $79 million from 2019, which was due to the company initiating a temporary reduction in non-essential capital expenditures in 2020.

For the 2020 fiscal year, Darling reported net sales of $3.6 billion, as compared with net sales of $3.4 billion for 2019. Net Income attributable to Darling for 2020 was $296.8 million, or $1.78 per diluted share, as compared to net income of $312.6 million, or $1.86 per diluted share, for 2019. Excluding the restructuring and asset impairment charge related to the shutdown of the company's two biodiesel locations, adjusted net income for 2020 was $327.4 million, or $1.96 per diluted share. Excluding the retroactive BTC related to 2018, adjusted net income for fiscal 2019 was $226.0 million, or $1.34 per diluted share.

As of January 2, 2021, Darling had $81.7 million in cash and cash equivalents, and $893.9 million available under its committed revolving credit agreement. Total debt outstanding at the end of the fiscal year was $1.5 billion.

Combined adjusted EBITDA was $214.5 million for the fourth quarter of 2020, compared to $193.3 million for the same period in 2019, excluding retroactive BTCs recorded in the 2019 fourth quarter. For the 2020 fiscal year, combined adjusted EBITDA totaled $841.5 million, compared to $739.7 million for fiscal year 2019, excluding the 2018 retroactive BTC.

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