SYS-CON MEDIA Authors: Pat Romanski, Elizabeth White, Yeshim Deniz, Glenn Rossman, Cynthia Dunlop

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.

@CloudExpo Stories
SYS-CON Events announced today that SOA Software, an API management leader, will exhibit at SYS-CON's 15th International Cloud Expo®, which will take place on November 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA. SOA Software is a leading provider of API Management and SOA Governance products that equip business to deliver APIs and SOA together to drive their company to meet its business strategy quickly and effectively. SOA Software’s technology helps businesses to accel...
How do APIs and IoT relate? The answer is not as simple as merely adding an API on top of a dumb device, but rather about understanding the architectural patterns for implementing an IoT fabric. There are typically two or three trends: Exposing the device to a management framework Exposing that management framework to a business centric logic • Exposing that business layer and data to end users. This last trend is the IoT stack, which involves a new shift in the separation of what stuff hap...
SYS-CON Events announced today that Utimaco will exhibit at SYS-CON's 15th International Cloud Expo®, which will take place on November 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA. Utimaco is a leading manufacturer of hardware based security solutions that provide the root of trust to keep cryptographic keys safe, secure critical digital infrastructures and protect high value data assets. Only Utimaco delivers a general-purpose hardware security module (HSM) as a customiz...
Samsung VP Jacopo Lenzi, who headed the company's recent SmartThings acquisition under the auspices of Samsung's Open Innovaction Center (OIC), answered a few questions we had about the deal. This interview was in conjunction with our interview with SmartThings CEO Alex Hawkinson. IoT Journal: SmartThings was developed in an open, standards-agnostic platform, and will now be part of Samsung's Open Innovation Center. Can you elaborate on your commitment to keep the platform open? Jacopo Lenzi: S...
Almost everyone sees the potential of Internet of Things but how can businesses truly unlock that potential. The key will be in the ability to discover business insight in the midst of an ocean of Big Data generated from billions of embedded devices via Systems of Discover. Businesses will also need to ensure that they can sustain that insight by leveraging the cloud for global reach, scale and elasticity.
SYS-CON Events announced today that ElasticBox is holding a Hackathon at DevOps Summit, November 6 from 12 pm -4 pm at the Santa Clara Convention Center in Santa Clara, CA. You can enter as an individual or team of up to 10 developers. A New Star Is Born Every Month! All completed ElasticBoxes will then be sent to a judging panel - 12 winners will be featured on the ElasticBox website in 2015. All entrants will receive five full enterprise licenses for one year + ElasticBox headphones + Elasti...
Once the decision has been made to move part or all of a workload to the cloud, a methodology for selecting that workload needs to be established. How do you move to the cloud? What does the discovery, assessment and planning look like? What workloads make sense? Which cloud model makes sense for each workload? What are the considerations for how to select the right cloud model? And how does that fit in with the overall IT tranformation? In his session at 15th Cloud Expo, John Hatem, head of V...
Cloud services are the newest tool in the arsenal of IT products in the market today. These cloud services integrate process and tools. In order to use these products effectively, organizations must have a good understanding of themselves and their business requirements. In his session at 15th Cloud Expo, Brian Lewis, Principal Architect at Verizon Cloud, will outline key areas of organizational focus, and how to formalize an actionable plan when migrating applications and internal services to...
SAP is delivering break-through innovation combined with fantastic user experience powered by the market-leading in-memory technology, SAP HANA. In his General Session at 15th Cloud Expo, Thorsten Leiduck, VP ISVs & Digital Commerce, SAP, will discuss how SAP and partners provide cloud and hybrid cloud solutions as well as real-time Big Data offerings that help companies of all sizes and industries run better. SAP launched an application challenge to award the most innovative SAP HANA and SAP ...
Ixia develops amazing products so its customers can connect the world. Ixia helps its customers provide an always-on user experience through fast, secure delivery of dynamic connected technologies and services. Through actionable insights that accelerate and secure application and service delivery, Ixia's customers benefit from faster time to market, optimized application performance and higher-quality deployments.
SYS-CON Events announced today that Calm.io has been named “Bronze Sponsor” of DevOps Summit Silicon Valley, which will take place on November 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA. Calm.io is a cloud orchestration platform for AWS, vCenter, OpenStack, or bare metal, that runs your CL tools puppet, Chef, shell, git, Jenkins, nagios, and will soon support New Relic and Docker. It can run hosted, or on premise and provides VM automation / expiry, self-service portals,...
In her General Session at 15th Cloud Expo, Anne Plese, Senior Consultant, Cloud Product Marketing, at Verizon Enterprise, will focus on finding the right mix of renting vs. buying Oracle capacity to scale to meet business demands, and offer validated Oracle database TCO models for Oracle development and testing environments. Anne Plese is a marketing and technology enthusiast/realist with over 19+ years in high tech. At Verizon Enterprise, she focuses on driving growth for the Verizon Cloud pla...
SYS-CON Events announced today that Aria Systems, the recurring revenue expert, has been named "Bronze Sponsor" of SYS-CON's 15th International Cloud Expo®, which will take place on November 4-6, 2014, at the Santa Clara Convention Center in Santa Clara, CA. Aria Systems helps leading businesses connect their customers with the products and services they love. Industry leaders like Pitney Bowes, Experian, AAA NCNU, VMware, HootSuite and many others choose Aria to power their recurring revenue bu...
The Internet of Things (IoT) is going to require a new way of thinking and of developing software for speed, security and innovation. This requires IT leaders to balance business as usual while anticipating for the next market and technology trends. Cloud provides the right IT asset portfolio to help today’s IT leaders manage the old and prepare for the new. Today the cloud conversation is evolving from private and public to hybrid. This session will provide use cases and insights to reinforce t...
As Platform as a Service (PaaS) matures as a category, developers should have the ability to use the programming language of their choice to build applications and have access to a wide array of services. Bluemix is IBM's open cloud development platform that enables users to easily build cloud-based, creative mobile and web applications without having to spend large amounts of time and resources on configuring infrastructure and multiple software licenses. In this track, you will learn about the...
Blue Box has closed a $10 million Series B financing. The round was led by a strategic investor and included participation from prior investors including Voyager Capital and Founders Collective, as well as the Blue Box executive team. This round follows a $4.3 million Series A closed in December of 2012 and led by Voyager Capital. In May of this year, the company announced general availability of its private cloud as a service offering, Blue Box Cloud. Since that release, the company has dem...
SYS-CON Events announced today that Verizon has been named "Gold Sponsor" of SYS-CON's 15th International Cloud Expo®, which will take place on November 4-6, 2014, at the Santa Clara Convention Center in Santa Clara, CA. Verizon Enterprise Solutions creates global connections that generate growth, drive business innovation and move society forward. With industry-specific solutions and a full range of global wholesale offerings provided over the company's secure mobility, cloud, strategic network...
SimpleECM is the only platform to offer a powerful combination of enterprise content management (ECM) services, capture solutions, and third-party business services providing simplified integrations and workflow development for solution providers. SimpleECM is opening the market to businesses of all sizes by reinventing the delivery of ECM services. Our APIs make the development of ECM services simple with the use of familiar technologies for a frictionless integration directly into web applicat...
The only place to be June 9-11 is Cloud Expo & @ThingsExpo 2015 East at the Javits Center in New York City. Join us there as delegates from all over the world come to listen to and engage with speakers & sponsors from the leading Cloud Computing, IoT & Big Data companies. Cloud Expo & @ThingsExpo are the leading events covering the booming market of Cloud Computing, IoT & Big Data for the enterprise. Speakers from all over the world will be hand-picked for their ability to explore the economic...
Cloudwick, the leading big data DevOps service and solution provider to the Fortune 1000, announced Big Loop, its multi-vendor operations platform. Cloudwick Big Loop creates greater collaboration between Fortune 1000 IT staff, developers and their database management systems as well as big data vendors. This allows customers to comprehensively manage and oversee their entire infrastructure, which leads to more successful production cluster operations, and scale-out. Cloudwick Big Loop supports ...