Welcome!

News Feed Item

Darling International Inc. Announces Results For Fourth Quarter And Fiscal 2013

IRVING, Texas, Feb. 26, 2014 /PRNewswire/ -- Darling International Inc. (NYSE: DAR) today reported fourth quarter net income of $22.5 million, or $0.18 per share, and net income of $109.0 million , or $0.91 per share, for its fiscal year ended December 28, 2013. Sales and results of operations for the fourth quarter and fiscal year as compared to the same periods of the prior year are as follows:

Fourth Quarter 2013

For the fourth quarter of 2013, the Company reported net sales of $428.7 million as compared to $424.9 million for the fourth quarter of 2012. The $3.8 million increase in net sales is primarily attributable to the inclusion of two months of sales from our new Canadian subsidiary, Rothsay, a full quarter of sales from our recently acquired food residuals business, Terra Renewal Services (TRS), and improved raw material volumes in both the Rendering and Bakery segments, when compared to the fourth quarter of 2012. However, these increases were largely offset by significant reductions in finished product prices for both fats and proteins. In the Bakery segment, we experienced a sharp decline in finished product pricing due to an unprecedented reduction in corn prices, which dropped approximately $1.76 per bushel, or 29% during the quarter on a sequential basis or $3.12 per bushel or 41% relative to the fourth quarter 2012.

Net income for fourth quarter 2013 decreased to $22.5 million, or $0.18 per share, as compared to net income of $28.8 million, or $0.24 per share, for the 2012 comparable period. The $6.3 million decrease in net income for the fourth quarter resulted from lower finished product pricing, primarily in the Bakery segment; transaction costs of $14.4 million related to the Company's acquisition of Rothsay in October 2013 and the VION Ingredients business of VION Foods Inc. on January 7, 2014; the write-off of a $13 million bridge loan fee; and higher depreciation and amortization expenses related to a general increase in capital expenditures and the purchase accounting step-up in basis associated with the Rothsay and TRS acquisitions. These items were offset, in part, by a $27.5 million gain on a foreign exchange contract related to the acquisition of VION Ingredients; earnings resulting from the Rothsay and TRS acquisitions; and a tax benefit associated with the U.S. biofuels tax incentive. The Bakery segment was moderately protected by the Company's corn derivatives positions for the quarter, but the impact of the Company's raw material purchasing formulas in its Bakery segment supply contracts, which are based on the published market price of corn, significantly lagged the rapid decline of our finished product prices through the processing and sales cycles.

Darling International Chairman and Chief Executive Officer, Randall Stuewe, said, "As previously reported, the Diamond Green Diesel refinery we own in a joint venture with Valero Energy Corporation commenced operations earlier in the year. During the fourth quarter, the joint venture encountered issues typically consistent with the shakedown phase for a new facility in the refining industry. However, we proved that the technology is capable of producing a high quality renewable diesel, which has been well received by the fuel market and distribution infrastructure," continued Mr. Stuewe. "Diamond Green Diesel experienced a challenging fourth quarter related to supply chain issues typical of a startup of this magnitude. There were periods in both the third and fourth quarters when Diamond Green Diesel operated below nameplate capacity, resulting in a fourth quarter ownership position in higher priced feedstock relative to the rapidly declining fat prices that occurred during the quarter. Thus, Diamond Green Diesel was unable to benefit from the favorable market conditions that existed for inexpensive fats. Furthermore, as the EPA's 2013 biofuels mandate was met, RIN values started to decline; however, this decline was exacerbated by the uncertainty created by the EPA's initial proposal to hold the 2014 mandate for Advanced Biofuels and Biomass Based Diesel constant at 1.28 billion gallons. Currently, Diamond Green Diesel is operating at nameplate capacity."

In the first quarter of 2014, we anticipate additional transaction-related costs, which are estimated to be as follows:

  • $27.3 million redemption premium associated with the repurchase of our previously outstanding 8.5% Notes;
  • Approximately $14 million to $18 million of other acquisition-related costs; and
  • $12.6 million foreign exchange contract loss related to the acquisition of VION Ingredients

Fiscal 2013

Darling International Chairman and Chief Executive Officer, Randall Stuewe, said, "Fiscal 2013 was a year of tremendous growth for the Company. We focused on strategic, long-term opportunities while managing a massively volatile fourth quarter in 2013. A sharp decline in the fats market during the fourth quarter resulted from large global crop production increases and uncertainty surrounding the U.S. government's RFS2 mandated biofuel volumes for 2014. Our contractual market-based formulas worked, but were hard-pressed to fully protect our spread in a difficult environment of rapidly declining prices. Additionally, as we approached year end, buyers' reluctance to purchase forward further exacerbated inventories, which increased as the market prices fell. Our protein prices followed the decline in soybean meal prices during the quarter, but have since rebounded. As expected, our Bakery segment earnings dropped with the decrease in corn prices during 2013."

Mr. Stuewe further commented, "We closed the Rothsay transaction on October 28, 2013. Integration is going well with raw material volumes as expected. Additionally, we closed on VION Ingredients, now Darling Ingredients International, in early January, with integration going nicely and synergies being identified. Overall, in fiscal 2013 operating costs were effectively managed and a strong capital improvement program was deployed. We are excited about the Company's global positioning and the opportunities that lie ahead with our expanded global platform."

For fiscal 2013, the Company reported net sales of $1,723.6 million as compared to $1,701.4 million for fiscal 2012. Similar to the fiscal 2013 fourth quarter, the $22.1 million increase in sales resulted primarily from the acquisition of Rothsay and TRS and increased raw material volumes compared to fiscal year 2012. These increases were offset by declines in the finished product prices of Cookie Meal®, fats, and pet food grade poultry meal.

For fiscal 2013, the Company reported net income of $109.0 million, or $0.91 per share, as compared to $130.8 million, or $1.11 per share, for the 2012 comparable period. Similar to the fiscal 2013 fourth quarter, the $21.8 million decrease in net income for fiscal 2013 resulted from acquisition-related costs, increased SG&A costs, lower finished product pricing in the Bakery segment, the write-off of bridge loan fees, and higher depreciation and amortization costs associated with increased capital expenditures and the accounting basis step-up related to the acquisitions. These decreases were partially offset by the foreign exchange contract gain, earnings from Rothsay and TRS, higher raw material volumes, earnings from the DGD joint venture, and the tax benefit associated with the U.S. biofuels tax incentive.

Darling International Inc. is the world's largest publicly-traded producer of sustainable natural ingredients from edible and inedible bio-nutrients creating a wide range of products and customized specialty solutions for clients in the food, pharmaceutical, pet food, feed, fuel, bioenergy, technical and fertilizer industries. With operations on five continents, the Company transforms all aspects of animal by-product streams into useable and specialty ingredients, such as gelatin, tallow, feed-grade fats, meat and bone meal, poultry meal, yellow grease, fuel feed stocks, green energy, natural casings and hides. Value-added products include food grade fats, bone products, organic fertilizers and plasma meals. The Company also recovers and converts used cooking oil and commercial bakery residuals into valuable feed and fuel ingredients. In addition, the Company provides grease trap collection services and sells used cooking oil collection equipment to restaurants and collects and land applies industrial residuals. For additional information, visit the Company's website at http://ir.darlingii.com.

Darling International will host a conference call to discuss the Company's fourth quarter and fiscal year 2013 financial results at 8:30 am Eastern Time (7:30 am Central Time) on Thursday, February 27, 2014.

To listen to the conference call, participants calling from within North America should dial 877-270-2148; international participants should dial 412-902-6510. Please refer to access code 10040827. Please call approximately ten minutes before the start of the call to ensure that you are connected.

The call will also be available as a live audio webcast that can be accessed on the Company website at http://ir.darlingii.com . Beginning one hour after its completion, a replay of the call can be accessed through March 6, 2014, by dialing 877-344-7529 domestically, or 412-317-0088 if outside North America. The access code for the replay is 10040827. The conference call will also be archived on the Company's website.

{This media release contains forward-looking statements regarding the business operations and prospects of Darling International and industry factors affecting it. These statements are identified by words such as "may," "will," "begin," "look forward," "expect," "believe," "intend," "anticipate," "should," "potential," "estimate," "continue," "momentum" and other words referring to events that may occur in the future. These statements reflect Darling International's current view of future events and are based on its assessment of, and are subject to, a variety of risks and uncertainties beyond its control, including the Company's ability to successfully integrate and operate Rothsay and Darling Ingredients International, disturbances in world financial, credit, commodities, stock markets and climatic conditions; unanticipated changes in national and international regulations affecting the Company's products; a decline in consumer confidence and discretionary spending; the general performance of the U.S. and global economies; global demands for biofuels and grain and oilseed commodities, which have exhibited volatility, and can impact the cost of feed for cattle, hogs and poultry, thus affecting available rendering feedstock and selling prices for the Company's products; risks related to diseases of animal origin affecting markets for the Company's products; risks associated with the renewable diesel plant in Norco, Louisiana owned and operated by a joint venture between Darling International and Valero Energy Corporation, including possible operating disruptions and marketing challenges; risks relating to possible third party claims of intellectual property infringement; economic disruptions resulting from the European debt crisis; continued or escalated conflict in the Middle East; and the Company's relatively high level of indebtedness, each of which could cause actual results to differ materially from those indicated in the forward-looking statements. Other risks and uncertainties regarding Darling International, its business and the industry in which it operates are referenced from time to time in the Company's filings with the Securities and Exchange Commission. Darling International is under no obligation to (and expressly disclaims any such obligation to) update or alter its forward-looking statements whether as a result of new information, future events or otherwise.}


Darling International Inc.

Consolidated Operating Results

For the Periods Ended December 28, 2013 and December 29, 2012

(Dollars in thousands, except per share amounts)



(Fourth Quarter Unaudited)





Three Months Ended



Twelve Months Ended







$ Change







$ Change



Dec. 28,


Dec. 29,


Favorable



Dec. 28,


Dec. 29,


Favorable


2013


2012


(Unfavorable)



2013


2012

(Unfavorable)

Net sales

$428,749


$424,915


$     3,834



$1,723,550


$1,701,429


$    22,121

Costs and expenses:














Cost of sales and operating expenses

$318,404


$314,088


$    (4,316)



$1,261,101


$1,232,604


$   (24,497)


Selling, general and administrative expenses

45,982


38,927


(7,055)



170,825


151,713


(19,112)


Depreciation and amortization

31,713


22,413


(9,300)



98,787


85,371


(13,416)


Acquisition costs

14,114



(14,114)



23,271



(23,271)

Total costs and expenses

410,213


375,428


(34,785)



1,553,984


1,469,688


(84,296)

Operating income 

18,536


49,487


(30,951)



169,566


231,741


(62,175)















Other income/(expense):














Interest expense

(21,501)


(5,508)


(15,993)



(38,108)


(24,054)


(14,054)


Foreign currency gain

28,107



28,107



28,107



28,107


Other, net

(928)


1,866


(2,794)



(3,547)


1,760


(5,307)

Total other income/(expense)

5,678


(3,642)


9,320



(13,548)


(22,294)


8,746















Equity in net income/loss of unconsolidated subsidiary

(1,136)


(937)


(199)



7,660


(2,662)


10,322















Income from operations before income taxes

23,078


44,908


(21,830)



163,678


206,785


(43,107)

Income taxes 

(585)


(16,106)


15,521



(54,711)


(76,015)


21,304

Net income 

$ 22,493


$ 28,802


$    (6,309)



$  108,967


$  130,770


$   (21,803)















Basic income per share:

$   0.18


$   0.24


$     (0.06)



$     0.91


$     1.11


$     (0.20)

Diluted income per share:

$   0.18


$   0.24


$     (0.06)



$     0.91


$     1.11


$     (0.20)







For More Information, contact:




Melissa Gaither, Director of Investor Relations

251 O'Connor Ridge Blvd., Suite 300
Irving, Texas 75038
Phone: +1-972-717-0300




More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
This is not a small hotel event. It is also not a big vendor party where politicians and entertainers are more important than real content. This is Cloud Expo, the world's longest-running conference and exhibition focused on Cloud Computing and all that it entails. If you want serious presentations and valuable insight about Cloud Computing for three straight days, then register now for Cloud Expo.
IoT device adoption is growing at staggering rates, and with it comes opportunity for developers to meet consumer demand for an ever more connected world. Wireless communication is the key part of the encompassing components of any IoT device. Wireless connectivity enhances the device utility at the expense of ease of use and deployment challenges. Since connectivity is fundamental for IoT device development, engineers must understand how to overcome the hurdles inherent in incorporating multipl...
Redis is not only the fastest database, but it has become the most popular among the new wave of applications running in containers. Redis speeds up just about every data interaction between your users or operational systems. In his session at 18th Cloud Expo, Dave Nielsen, Developer Relations at Redis Labs, will shares the functions and data structures used to solve everyday use cases that are driving Redis' popularity.
SYS-CON Events announced today that Stratoscale, the software company developing the next generation data center operating system, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. Stratoscale is revolutionizing the data center with a zero-to-cloud-in-minutes solution. With Stratoscale’s hardware-agnostic, Software Defined Data Center (SDDC) solution to store everything, run anything and scale everywhere...
The increasing popularity of the Internet of Things necessitates that our physical and cognitive relationship with wearable technology will change rapidly in the near future. This advent means logging has become a thing of the past. Before, it was on us to track our own data, but now that data is automatically available. What does this mean for mHealth and the "connected" body? In her session at @ThingsExpo, Lisa Calkins, CEO and co-founder of Amadeus Consulting, will discuss the impact of wea...
Many private cloud projects were built to deliver self-service access to development and test resources. While those clouds delivered faster access to resources, they lacked visibility, control and security needed for production deployments. In their session at 18th Cloud Expo, Steve Anderson, Product Manager at BMC Software, and Rick Lefort, Principal Technical Marketing Consultant at BMC Software, will discuss how a cloud designed for production operations not only helps accelerate developer...
So, you bought into the current machine learning craze and went on to collect millions/billions of records from this promising new data source. Now, what do you do with them? Too often, the abundance of data quickly turns into an abundance of problems. How do you extract that "magic essence" from your data without falling into the common pitfalls? In her session at @ThingsExpo, Natalia Ponomareva, Software Engineer at Google, will provide tips on how to be successful in large scale machine lear...
Angular 2 is a complete re-write of the popular framework AngularJS. Programming in Angular 2 is greatly simplified – now it's a component-based well-performing framework. This immersive one-day workshop at 18th Cloud Expo, led by Yakov Fain, a Java Champion and a co-founder of the IT consultancy Farata Systems and the product company SuranceBay, will provide you with everything you wanted to know about Angular 2.
SYS-CON Events announced today that Peak 10, Inc., a national IT infrastructure and cloud services provider, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. Peak 10 provides reliable, tailored data center and network services, cloud and managed services. Its solutions are designed to scale and adapt to customers’ changing business needs, enabling them to lower costs, improve performance and focus inter...
You think you know what’s in your data. But do you? Most organizations are now aware of the business intelligence represented by their data. Data science stands to take this to a level you never thought of – literally. The techniques of data science, when used with the capabilities of Big Data technologies, can make connections you had not yet imagined, helping you discover new insights and ask new questions of your data. In his session at @ThingsExpo, Sarbjit Sarkaria, data science team lead ...
As the rapid adoption of containers continues, companies are finding that they lack the operational tools to understand the behavior of applications deployed in these containers, and how to identify issues in their application infrastructure. For example, how are multiple containers within an application impacting each other’s performance? If an application’s service is degraded, which container is to blame? In the case of an application outage, what was the root cause of the outage?
SYS-CON Events announced today that Enzu, a leading provider of cloud hosting solutions, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. Enzu’s mission is to be the leading provider of enterprise cloud solutions worldwide. Enzu enables online businesses to use its IT infrastructure to their competitive advantage. By offering a suite of proven hosting and management services, Enzu wants companies to foc...
Peak 10, Inc., has announced the implementation of IT service management, a business process alignment initiative based on the widely adopted Information Technology Infrastructure Library (ITIL) framework. The implementation of IT service management enhances Peak 10’s current service-minded approach to IT delivery by propelling the company to deliver higher levels of personalized and prompt service. The majority of Peak 10’s operations employees have been trained and certified in the ITIL frame...
SYS-CON Events announced today that Men & Mice, the leading global provider of DNS, DHCP and IP address management overlay solutions, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. The Men & Mice Suite overlay solution is already known for its powerful application in heterogeneous operating environments, enabling enterprises to scale without fuss. Building on a solid range of diverse platform support,...
You deployed your app with the Bluemix PaaS and it's gaining some serious traction, so it's time to make some tweaks. Did you design your application in a way that it can scale in the cloud? Were you even thinking about the cloud when you built the app? If not, chances are your app is going to break. Check out this webcast to learn various techniques for designing applications that will scale successfully in Bluemix, for the confidence you need to take your apps to the next level and beyond.