(Mark One)
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/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
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SECURITIES EXCHANGE ACT OF 1934
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For the quarterly period ended April 2, 2016
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OR
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/ / TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
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SECURITIES EXCHANGE ACT OF 1934
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For the transition period from _______ to _______
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Delaware
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36-2495346
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(State or other jurisdiction
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(I.R.S. Employer
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of incorporation or organization)
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Identification Number)
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251 O'Connor Ridge Blvd., Suite 300
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Irving, Texas
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75038
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
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X
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Accelerated filer
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Non-accelerated filer
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Smaller reporting company
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(Do not check if a smaller reporting company)
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Page No.
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April 2,
2016 |
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January 2,
2016 |
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ASSETS
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(unaudited)
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Current assets:
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Cash and cash equivalents
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$
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147,326
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$
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156,884
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Restricted cash
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321
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331
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Accounts receivable, net
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376,346
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371,392
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Inventories
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372,616
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344,583
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Prepaid expenses
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40,279
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36,175
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Income taxes refundable
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11,825
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11,963
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Other current assets
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11,570
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10,460
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Total current assets
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960,283
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931,788
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Property, plant and equipment, less accumulated depreciation of
$713,751 at April 2, 2016 and $652,875 at January 2, 2016
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1,535,521
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1,508,167
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Intangible assets, less accumulated amortization of
$248,354 at April 2, 2016 and $252,719 at January 2, 2016
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792,166
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782,349
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Goodwill
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1,269,296
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1,233,102
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Investment in unconsolidated subsidiaries
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256,604
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247,238
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Other assets
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40,584
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41,623
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Deferred income taxes
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17,362
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16,352
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$
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4,871,816
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$
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4,760,619
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LIABILITIES AND STOCKHOLDERS’ EQUITY
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Current liabilities:
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Current portion of long-term debt
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$
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46,591
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$
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45,166
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Accounts payable, principally trade
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170,895
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149,998
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Income taxes payable
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7,032
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6,679
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Accrued expenses
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227,338
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239,825
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Total current liabilities
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451,856
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441,668
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Long-term debt, net of current portion
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1,924,393
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1,885,851
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Other non-current liabilities
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96,116
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97,809
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Deferred income taxes
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368,640
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360,681
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Total liabilities
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2,841,005
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2,786,009
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Commitments and contingencies
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Stockholders’ equity:
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Common stock, $0.01 par value; 250,000,000 shares authorized;
167,594,055 and 167,070,983 shares issued at April 2, 2016
and at January 2, 2016, respectively
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1,676
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1,671
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Additional paid-in capital
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1,491,317
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1,488,783
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Treasury stock, at cost; 3,026,095 and 2,335,607 shares at
April 2, 2016 and at January 2, 2016, respectively
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(40,868
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)
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(34,316
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)
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Accumulated other comprehensive loss
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(276,363
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)
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(335,918
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)
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Retained earnings
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751,568
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750,489
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Total Darling's stockholders’ equity
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1,927,330
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1,870,709
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Noncontrolling interests
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103,481
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103,901
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Total stockholders' equity
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$
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2,030,811
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$
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1,974,610
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$
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4,871,816
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$
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4,760,619
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Three Months Ended
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April 2,
2016 |
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April 4,
2015 |
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Net sales
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$
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779,641
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$
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874,694
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Costs and expenses:
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Cost of sales and operating expenses
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598,893
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684,521
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Selling, general and administrative expenses
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81,469
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86,631
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Acquisition and integration costs
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331
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5,319
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Depreciation and amortization
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72,256
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66,398
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Total costs and expenses
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752,949
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842,869
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Operating income
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26,692
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31,825
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Other expense:
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Interest expense
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(23,901
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)
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(23,109
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)
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Foreign currency loss
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(2,603
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)
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(2,460
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)
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Other expense, net
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(1,305
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)
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(509
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)
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Total other expense
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(27,809
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)
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(26,078
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)
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Equity in net income/(loss) of unconsolidated subsidiaries
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5,643
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(1,808
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)
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Income before income taxes
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4,526
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3,939
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Income tax expense
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1,863
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2,115
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Net income
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2,663
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1,824
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Net income attributable to noncontrolling interests
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(1,584
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)
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(1,715
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)
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Net income attributable to Darling
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$
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1,079
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$
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109
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Basic income per share
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$
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0.01
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$
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—
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Diluted income per share
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$
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0.01
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$
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—
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Three Months Ended
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April 2, 2016
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April 4, 2015
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Net income
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$
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2,663
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$
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1,824
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Other comprehensive income/(loss), net of tax:
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Foreign currency translation
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57,531
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(93,315
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)
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Pension adjustments
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726
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769
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|
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Corn option derivative adjustments
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(706
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)
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38
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Total other comprehensive income/(loss), net of tax
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57,551
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(92,508
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)
|
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Total comprehensive income/(loss)
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$
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60,214
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$
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(90,684
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)
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Comprehensive income/(loss) attributable to noncontrolling interests
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(420
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)
|
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7,042
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Comprehensive income/(loss) attributable to Darling
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$
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60,634
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$
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(97,726
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)
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April 2,
2016 |
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April 4,
2015 |
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Cash flows from operating activities:
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Net Income
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$
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2,663
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$
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1,824
|
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Adjustments to reconcile net income to net cash provided by operating activities:
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Depreciation and amortization
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72,256
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66,398
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Loss on disposal of property, plant, equipment and other assets
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698
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47
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|
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Gain on insurance proceeds from insurance settlements
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—
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(341
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)
|
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Deferred taxes
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(3,705
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)
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503
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|
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Increase/(decrease) in long-term pension liability
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(1,146
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)
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261
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Stock-based compensation expense
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2,440
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1,282
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Deferred loan cost amortization
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2,794
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2,409
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Equity in net (income)/loss of unconsolidated subsidiaries
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(5,643
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)
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1,808
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Changes in operating assets and liabilities, net of effects from acquisitions:
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|
||||
Accounts receivable
|
7,118
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12,269
|
|
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Income taxes refundable/payable
|
400
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(1,857
|
)
|
||
Inventories and prepaid expenses
|
(21,206
|
)
|
|
(26,511
|
)
|
||
Accounts payable and accrued expenses
|
3,336
|
|
|
(19,985
|
)
|
||
Other
|
(14,962
|
)
|
|
21,133
|
|
||
Net cash provided by operating activities
|
45,043
|
|
|
59,240
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Capital expenditures
|
(53,375
|
)
|
|
(50,838
|
)
|
||
Acquisitions, net of cash acquired
|
(8,511
|
)
|
|
—
|
|
||
Gross proceeds from disposal of property, plant and equipment and other assets
|
1,424
|
|
|
534
|
|
||
Proceeds from insurance settlement
|
1,181
|
|
|
341
|
|
||
Payments related to routes and other intangibles
|
—
|
|
|
(753
|
)
|
||
Net cash used by investing activities
|
(59,281
|
)
|
|
(50,716
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Proceeds from long-term debt
|
8,760
|
|
|
5,943
|
|
||
Payments on long-term debt
|
(16,207
|
)
|
|
(13,602
|
)
|
||
Borrowings from revolving credit facility
|
33,000
|
|
|
27,428
|
|
||
Payments on revolving credit facility
|
(21,000
|
)
|
|
(37,943
|
)
|
||
Net cash overdraft financing
|
—
|
|
|
31,162
|
|
||
Issuance of common stock
|
45
|
|
|
81
|
|
||
Repurchase of treasury stock
|
(5,000
|
)
|
|
—
|
|
||
Minimum withholding taxes paid on stock awards
|
(1,788
|
)
|
|
(4,469
|
)
|
||
Excess tax benefits from stock-based compensation
|
(446
|
)
|
|
(35
|
)
|
||
Distributions to noncontrolling interests
|
—
|
|
|
(38
|
)
|
||
Net cash provided/(used) by financing activities
|
(2,636
|
)
|
|
8,527
|
|
||
Effect of exchange rate changes on cash
|
7,316
|
|
|
(13,704
|
)
|
||
Net increase/(decrease) in cash and cash equivalents
|
(9,558
|
)
|
|
3,347
|
|
||
Cash and cash equivalents at beginning of period
|
156,884
|
|
|
108,784
|
|
||
Cash and cash equivalents at end of period
|
$
|
147,326
|
|
|
$
|
112,131
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
||||
Accrued capital expenditures
|
$
|
(6,595
|
)
|
|
$
|
2,164
|
|
Cash paid during the period for:
|
|
|
|
||||
Interest, net of capitalized interest
|
$
|
20,597
|
|
|
$
|
26,118
|
|
Income taxes, net of refunds
|
$
|
5,114
|
|
|
$
|
5,149
|
|
Non-cash financing activities
|
|
|
|
||||
Debt issued for assets
|
$
|
10
|
|
|
$
|
—
|
|
Contribution of assets to unconsolidated subsidiary
|
$
|
2,674
|
|
|
$
|
—
|
|
(1)
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General
|
(2)
|
Summary of Significant Accounting Policies
|
(a)
|
Basis of Presentation
|
(b)
|
Fiscal Periods
|
(c)
|
Revenue Recognition
|
(d)
|
Foreign Currency Translation and Remeasurement
|
(e)
|
Reclassifications
|
(f)
|
Earnings Per Share
|
|
Net Income per Common Share (in thousands, except per share data)
|
||||||||||||||||||||
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Three Months Ended
|
||||||||||||||||||||
|
|
|
April 2, 2016
|
|
|
|
|
|
April 4, 2015
|
|
|
||||||||||
|
Income
|
|
Shares
|
|
Per Share
|
|
Income
|
|
Shares
|
|
Per Share
|
||||||||||
Basic:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net Income attributable to Darling
|
$
|
1,079
|
|
|
164,434
|
|
|
$
|
0.01
|
|
|
$
|
109
|
|
|
164,882
|
|
|
$
|
—
|
|
Diluted:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Effect of dilutive securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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Add: Option shares in the money and dilutive effect of non-vested stock awards
|
|
|
|
157
|
|
|
|
|
|
|
|
|
419
|
|
|
|
|
||||
Less: Pro forma treasury shares
|
|
|
|
(38
|
)
|
|
|
|
|
|
|
|
(155
|
)
|
|
|
|
||||
Diluted:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income attributable to Darling
|
$
|
1,079
|
|
|
164,553
|
|
|
$
|
0.01
|
|
|
$
|
109
|
|
|
165,146
|
|
|
$
|
—
|
|
|
|
(3)
|
Inventories
|
|
April 2, 2016
|
|
January 2, 2016
|
||||
Finished product
|
$
|
232,105
|
|
|
$
|
212,829
|
|
Work in process
|
91,164
|
|
|
84,474
|
|
||
Supplies and other
|
49,347
|
|
|
47,280
|
|
||
|
$
|
372,616
|
|
|
$
|
344,583
|
|
(4)
|
Intangible Assets
|
|
April 2, 2016
|
|
January 2, 2016
|
||||
Indefinite Lived Intangible Assets
|
|
|
|
||||
Trade names
|
$
|
53,706
|
|
|
$
|
52,466
|
|
|
53,706
|
|
|
52,466
|
|
||
Finite Lived Intangible Assets:
|
|
|
|
|
|
||
Routes
|
388,449
|
|
|
390,888
|
|
||
Permits
|
503,921
|
|
|
494,754
|
|
||
Non-compete agreements
|
3,890
|
|
|
6,996
|
|
||
Trade names
|
76,265
|
|
|
75,825
|
|
||
Royalty, consulting, land use rights and leasehold
|
14,289
|
|
|
14,139
|
|
||
|
986,814
|
|
|
982,602
|
|
||
Accumulated Amortization:
|
|
|
|
||||
Routes
|
(85,650
|
)
|
|
(99,819
|
)
|
||
Permits
|
(145,037
|
)
|
|
(134,752
|
)
|
||
Non-compete agreements
|
(1,391
|
)
|
|
(4,628
|
)
|
||
Trade names
|
(14,455
|
)
|
|
(11,959
|
)
|
||
Royalty, consulting, land use rights and leasehold
|
(1,821
|
)
|
|
(1,561
|
)
|
||
|
(248,354
|
)
|
|
(252,719
|
)
|
||
Total Intangible assets, less accumulated amortization
|
$
|
792,166
|
|
|
$
|
782,349
|
|
(5)
|
Goodwill
|
|
Feed Ingredients
|
Food Ingredients
|
Fuel Ingredients
|
Total
|
||||||||
Balance at January 2, 2016
|
|
|
|
|
||||||||
Goodwill
|
$
|
812,797
|
|
$
|
323,385
|
|
$
|
112,834
|
|
$
|
1,249,016
|
|
Accumulated impairment losses
|
(15,914
|
)
|
—
|
|
—
|
|
(15,914
|
)
|
||||
|
796,883
|
|
323,385
|
|
112,834
|
|
1,233,102
|
|
||||
Goodwill acquired during year
|
827
|
|
—
|
|
2
|
|
829
|
|
||||
Foreign currency translation
|
19,294
|
|
10,149
|
|
5,922
|
|
35,365
|
|
||||
Balance at April 2, 2016
|
|
|
|
|
|
|
|
|||||
Goodwill
|
832,918
|
|
333,534
|
|
118,758
|
|
1,285,210
|
|
||||
Accumulated impairment losses
|
(15,914
|
)
|
—
|
|
—
|
|
(15,914
|
)
|
||||
|
$
|
817,004
|
|
$
|
333,534
|
|
$
|
118,758
|
|
$
|
1,269,296
|
|
(6)
|
Investment in Unconsolidated Subsidiaries
|
(in thousands)
|
|
March 31, 2016
|
December 31, 2015
|
||||
Assets:
|
|
|
|
||||
Total current assets
|
|
$
|
252,137
|
|
$
|
261,444
|
|
Property, plant and equipment, net
|
|
356,746
|
|
356,230
|
|
||
Other assets
|
|
19,782
|
|
3,034
|
|
||
Total assets
|
|
$
|
628,665
|
|
$
|
620,708
|
|
Liabilities and members' equity:
|
|
|
|
||||
Total current portion of long term debt
|
|
$
|
62,023
|
|
$
|
62,023
|
|
Total other current liabilities
|
|
21,056
|
|
19,935
|
|
||
Total long term debt
|
|
82,563
|
|
86,819
|
|
||
Total other long term liabilities
|
|
390
|
|
380
|
|
||
Total members' equity
|
|
462,633
|
|
451,551
|
|
||
Total liabilities and member's equity
|
|
$
|
628,665
|
|
$
|
620,708
|
|
|
|
Three Months Ended
|
|||||
(in thousands)
|
|
March 31, 2016
|
March 31, 2015
|
||||
Revenues:
|
|
|
|
||||
Operating revenues
|
|
$
|
71,768
|
|
$
|
116,728
|
|
Expenses:
|
|
|
|
||||
Total costs and expenses
|
|
57,887
|
|
117,044
|
|
||
Operating income/(loss)
|
|
13,881
|
|
(316
|
)
|
||
Other income
|
|
15
|
|
20
|
|
||
Interest and debt expense, net
|
|
(2,814
|
)
|
(4,156
|
)
|
||
Net income/(loss)
|
|
$
|
11,082
|
|
$
|
(4,452
|
)
|
(7)
|
Debt
|
|
April 2, 2016
|
|
January 2, 2016
|
||||
Amended Credit Agreement:
|
|
|
|
||||
Revolving Credit Facility ($10.0 million and $9.4 million denominated in CAD at April 2, 2016 and January 2, 2016, respectively)
|
$
|
21,968
|
|
|
$
|
9,358
|
|
Term Loan A ($101.4 million and $97.1 million denominated in CAD at April 2, 2016 and January 2, 2016, respectively)
|
277,606
|
|
|
277,181
|
|
||
Less unamortized deferred loan costs
|
(1,433
|
)
|
|
(1,552
|
)
|
||
Carrying value Term Loan A
|
276,173
|
|
|
275,629
|
|
||
|
|
|
|
||||
Term Loan B
|
588,000
|
|
|
589,500
|
|
||
Less unamortized deferred loan costs
|
(7,408
|
)
|
|
(7,774
|
)
|
||
Carrying value Term Loan B
|
580,592
|
|
|
581,726
|
|
||
|
|
|
|
||||
5.375% Senior Notes due 2022 with effective interest of 5.72%
|
500,000
|
|
|
500,000
|
|
||
Less unamortized deferred loan costs
|
(8,636
|
)
|
|
(8,952
|
)
|
||
Carrying value 5.375% Senior Notes due 2022
|
491,364
|
|
|
491,048
|
|
||
|
|
|
|
||||
4.75% Senior Notes due 2022 - Denominated in euro with effective interest of 5.10%
|
588,079
|
|
|
560,912
|
|
||
Less unamortized deferred loan costs - Denominated in euro
|
(10,846
|
)
|
|
(10,705
|
)
|
||
Carrying value 4.75% Senior Notes due 2022
|
577,233
|
|
|
550,207
|
|
||
|
|
|
|
||||
Other Notes and Obligations
|
23,654
|
|
|
23,049
|
|
||
|
1,970,984
|
|
|
1,931,017
|
|
||
Less Current Maturities
|
46,591
|
|
|
45,166
|
|
||
|
$
|
1,924,393
|
|
|
$
|
1,885,851
|
|
(8)
|
Income Taxes
|
(9)
|
Other Comprehensive Income
|
|
Three Months Ended
|
|||||||||||||||||
|
Before-Tax
|
Tax (Expense)
|
Net-of-Tax
|
|||||||||||||||
|
Amount
|
or Benefit
|
Amount
|
|||||||||||||||
|
April 2, 2016
|
April 4, 2015
|
April 2, 2016
|
April 4, 2015
|
April 2, 2016
|
April 4, 2015
|
||||||||||||
Defined benefit pension plans
|
|
|
|
|
|
|
||||||||||||
Amortization of prior service cost/(benefit)
|
$
|
7
|
|
$
|
(20
|
)
|
$
|
(3
|
)
|
$
|
10
|
|
$
|
4
|
|
$
|
(10
|
)
|
Amortization of actuarial loss
|
1,168
|
|
1,285
|
|
(446
|
)
|
(506
|
)
|
722
|
|
779
|
|
||||||
Total defined benefit pension plans
|
1,175
|
|
1,265
|
|
(449
|
)
|
(496
|
)
|
726
|
|
769
|
|
||||||
Corn option derivatives
|
|
|
|
|
|
|
||||||||||||
Loss/(gain) reclassified to net income
|
(1,474
|
)
|
(234
|
)
|
572
|
|
91
|
|
(902
|
)
|
(143
|
)
|
||||||
Gain/(loss) activity recognized in other comprehensive income (loss)
|
320
|
|
296
|
|
(124
|
)
|
(115
|
)
|
196
|
|
181
|
|
||||||
Total corn option derivatives
|
(1,154
|
)
|
62
|
|
448
|
|
(24
|
)
|
(706
|
)
|
38
|
|
||||||
|
|
|
|
|
|
|
||||||||||||
Foreign currency translation
|
57,531
|
|
(93,315
|
)
|
—
|
|
—
|
|
57,531
|
|
(93,315
|
)
|
||||||
|
|
|
|
|
|
|
||||||||||||
Other comprehensive income (loss)
|
$
|
57,552
|
|
$
|
(91,988
|
)
|
$
|
(1
|
)
|
$
|
(520
|
)
|
$
|
57,551
|
|
$
|
(92,508
|
)
|
|
|
|
Three Months Ended
|
|
|||||
|
April 2, 2016
|
April 4, 2015
|
Statement of Operations Classification
|
||||
Derivative instruments
|
|
|
|
||||
Corn option derivatives
|
$
|
1,474
|
|
$
|
234
|
|
Cost of sales and operating expenses
|
|
1,474
|
|
234
|
|
Total before tax
|
||
|
(572
|
)
|
(91
|
)
|
Income taxes
|
||
|
902
|
|
143
|
|
Net of tax
|
||
Defined benefit pension plans
|
|
|
|
||||
Amortization of prior service (cost)/benefit
|
$
|
(7
|
)
|
$
|
20
|
|
(a)
|
Amortization of actuarial loss
|
(1,168
|
)
|
(1,285
|
)
|
(a)
|
||
|
(1,175
|
)
|
(1,265
|
)
|
Total before tax
|
||
|
449
|
|
496
|
|
Income taxes
|
||
|
(726
|
)
|
(769
|
)
|
Net of tax
|
||
Total reclassifications
|
$
|
176
|
|
$
|
(626
|
)
|
Net of tax
|
(a)
|
These items are included in the computation of net periodic pension cost. See Note 11 Employee Benefit Plans for additional information.
|
|
|
Three Months Ended April 2, 2016
|
|||||||||||
|
|
Foreign Currency
|
Derivative
|
Defined Benefit
|
|
||||||||
|
|
Translation
|
Instruments
|
Pension Plans
|
Total
|
||||||||
Accumulated Other Comprehensive Income (loss) January 2, 2016, attributable to Darling, net of tax
|
|
$
|
(305,213
|
)
|
$
|
1,843
|
|
$
|
(32,548
|
)
|
$
|
(335,918
|
)
|
Other comprehensive gain before reclassifications
|
|
57,531
|
|
196
|
|
—
|
|
57,727
|
|
||||
Amounts reclassified from accumulated other comprehensive income (loss)
|
|
—
|
|
(902
|
)
|
726
|
|
(176
|
)
|
||||
Net current-period other comprehensive income
|
|
57,531
|
|
(706
|
)
|
726
|
|
57,551
|
|
||||
Noncontrolling interest
|
|
(2,004
|
)
|
—
|
|
—
|
|
(2,004
|
)
|
||||
Accumulated Other Comprehensive Income (loss) April 2, 2016, attributable to Darling, net of tax
|
|
(245,678
|
)
|
$
|
1,137
|
|
$
|
(31,822
|
)
|
$
|
(276,363
|
)
|
|
Pension Benefits
|
|||||
|
Three Months Ended
|
|||||
|
April 2,
2016 |
April 4,
2015 |
||||
Service cost
|
$
|
637
|
|
$
|
1,678
|
|
Interest cost
|
1,745
|
|
2,647
|
|
||
Expected return on plan assets
|
(1,885
|
)
|
(3,065
|
)
|
||
Amortization of prior service cost
|
7
|
|
(20
|
)
|
||
Amortization of net loss
|
1,168
|
|
1,285
|
|
||
Curtailment gain
|
(1,223
|
)
|
—
|
|
||
Net pension cost
|
$
|
449
|
|
$
|
2,525
|
|
(12)
|
Derivatives
|
Functional Currency
|
|
Contract Currency
|
||||
Type
|
Amount
|
|
Type
|
Amount
|
||
Brazilian real
|
30,288
|
|
|
Euro
|
6,850
|
|
Brazilian real
|
83,417
|
|
|
U.S. dollar
|
20,825
|
|
Euro
|
238,636
|
|
|
U.S. dollar
|
267,822
|
|
Euro
|
8,737
|
|
|
Polish zloty
|
38,000
|
|
Euro
|
3,536
|
|
|
Japanese yen
|
452,478
|
|
Euro
|
30,555
|
|
|
Chinese renminbi
|
225,110
|
|
Euro
|
9,673
|
|
|
Australian dollar
|
14,400
|
|
Polish zloty
|
17,014
|
|
|
Euro
|
3,894
|
|
British pound
|
87
|
|
|
U.S. dollar
|
125
|
|
Japanese yen
|
45,817
|
|
|
U.S. dollar
|
383
|
|
Derivatives
Designated as
Cash Flow Hedges
|
Gain or (Loss)
Recognized in Other Comprehensive Income ("OCI")
on Derivatives
(Effective Portion) (a)
|
Gain or (Loss)
Reclassified from
Accumulated OCI
into Income
(Effective Portion) (b)
|
Gain or (Loss)
Recognized in Income
on Derivatives
(Ineffective Portion and
Amount Excluded from
Effectiveness Testing) (c)
|
|||||||||||||||
|
2016
|
2015
|
2016
|
2015
|
2016
|
2015
|
||||||||||||
Corn options
|
$
|
320
|
|
$
|
296
|
|
$
|
1,474
|
|
$
|
234
|
|
$
|
52
|
|
$
|
55
|
|
|
|
|
|
|
|
|
||||||||||||
Total
|
$
|
320
|
|
$
|
296
|
|
$
|
1,474
|
|
$
|
234
|
|
$
|
52
|
|
$
|
55
|
|
(a)
|
Amount recognized in accumulated OCI (effective portion) is reported as accumulated other comprehensive income/(loss) of approximately $
0.3 million
and $
0.3 million
recorded net of taxes of approximately $
0.1 million
and $
0.1 million
as of
April 2, 2016
and
April 4, 2015
, respectively.
|
(b)
|
Gains and (losses) reclassified from accumulated OCI into income (effective portion) for corn options and natural gas swaps are included in cost of sales, respectively, in the Company’s consolidated statements of operations.
|
(c)
|
Gains and (losses) recognized in income on derivatives (ineffective portion) for corn options and natural gas swaps is included in other income/ (expense), net in the Company’s consolidated statements of operations.
|
|
|
|
|
|
|
|
|
Loss or (Gain) Recognized in Income on Derivatives Not Designated as Hedges
|
|||||
|
|
|
|
Three Months Ended
|
|||||
Derivatives not designated as hedging instruments
|
|
Location
|
|
April 2, 2016
|
April 4, 2015
|
||||
|
|
|
|
|
|
||||
Foreign Exchange
|
|
Foreign currency loss/(gain)
|
|
$
|
11,287
|
|
$
|
(23,044
|
)
|
Foreign Exchange
|
|
Selling, general and administrative expense
|
|
(2,911
|
)
|
3,339
|
|
||
Corn options and futures
|
|
Net sales
|
|
1
|
|
(11
|
)
|
||
Corn options and futures
|
|
Cost of sales and operating expenses
|
|
(532
|
)
|
(255
|
)
|
||
Heating Oil swaps and options
|
|
Net sales
|
|
(73
|
)
|
—
|
|
||
Heating Oil swaps and options
|
|
Cost of sales and operating expenses
|
|
—
|
|
95
|
|
||
Total
|
|
|
|
$
|
7,772
|
|
$
|
(19,876
|
)
|
|
|
Fair Value Measurements at April 2, 2016 Using
|
||||||||||
|
|
Quoted Prices in
Active Markets for
Identical Assets
|
Significant Other
Observable
Inputs
|
Significant
Unobservable
Inputs
|
||||||||
(In thousands of dollars)
|
Total
|
(Level 1)
|
(Level 2)
|
(Level 3)
|
||||||||
Assets:
|
|
|
|
|
||||||||
Derivative instruments
|
$
|
5,121
|
|
$
|
—
|
|
$
|
5,121
|
|
$
|
—
|
|
Total Assets
|
$
|
5,121
|
|
$
|
—
|
|
$
|
5,121
|
|
$
|
—
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
||||||||
Derivative instruments
|
$
|
4,895
|
|
$
|
—
|
|
$
|
4,895
|
|
$
|
—
|
|
5.375% Senior notes
|
511,250
|
|
—
|
|
511,250
|
|
—
|
|
||||
4.75% Senior notes
|
588,079
|
|
—
|
|
588,079
|
|
—
|
|
||||
Term loan A
|
278,300
|
|
—
|
|
278,300
|
|
—
|
|
||||
Term loan B
|
587,633
|
|
—
|
|
587,633
|
|
—
|
|
||||
Revolver debt
|
21,638
|
|
—
|
|
21,638
|
|
—
|
|
||||
Total Liabilities
|
$
|
1,991,795
|
|
$
|
—
|
|
$
|
1,991,795
|
|
$
|
—
|
|
|
|
Fair Value Measurements at January 2, 2016 Using
|
||||||||||
|
|
Quoted Prices in
Active Markets for
Identical Assets
|
Significant Other
Observable
Inputs
|
Significant
Unobservable
Inputs
|
||||||||
(In thousands of dollars)
|
Total
|
(Level 1)
|
(Level 2)
|
(Level 3)
|
||||||||
Assets:
|
|
|
|
|
||||||||
Derivative instruments
|
$
|
4,458
|
|
$
|
—
|
|
$
|
4,458
|
|
$
|
—
|
|
Total Assets
|
$
|
4,458
|
|
$
|
—
|
|
$
|
4,458
|
|
$
|
—
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
||||||||
Derivative instruments
|
$
|
4,437
|
|
$
|
—
|
|
$
|
4,437
|
|
$
|
—
|
|
5.375% Senior notes
|
495,000
|
|
—
|
|
495,000
|
|
—
|
|
||||
4.75% Senior notes
|
541,280
|
|
—
|
|
541,280
|
|
—
|
|
||||
Term loan A
|
277,874
|
|
—
|
|
277,874
|
|
—
|
|
||||
Term loan B
|
577,710
|
|
—
|
|
577,710
|
|
—
|
|
||||
Revolver debt
|
9,218
|
|
—
|
|
9,218
|
|
—
|
|
||||
Total Liabilities
|
$
|
1,905,519
|
|
$
|
—
|
|
$
|
1,905,519
|
|
$
|
—
|
|
(14)
|
Contingencies
|
(15)
|
Business Segments
|
|
Feed Ingredients
|
Food Ingredients
|
Fuel Ingredients
|
Corporate
|
Total
|
||||||||||
Three Months Ended April 2, 2016
|
|
|
|
|
|
||||||||||
Net Sales
|
$
|
476,171
|
|
$
|
247,897
|
|
$
|
55,573
|
|
$
|
—
|
|
$
|
779,641
|
|
Cost of sales and operating expenses
|
372,657
|
|
185,554
|
|
40,682
|
|
—
|
|
598,893
|
|
|||||
Gross Margin
|
103,514
|
|
62,343
|
|
14,891
|
|
—
|
|
180,748
|
|
|||||
|
|
|
|
|
|
||||||||||
Selling, general and administrative expense
|
45,251
|
|
23,759
|
|
1,850
|
|
10,609
|
|
81,469
|
|
|||||
Acquisition and integration costs
|
—
|
|
—
|
|
—
|
|
331
|
|
331
|
|
|||||
Depreciation and amortization
|
44,377
|
|
16,704
|
|
6,919
|
|
4,256
|
|
72,256
|
|
|||||
Segment operating income/(loss)
|
13,886
|
|
21,880
|
|
6,122
|
|
(15,196
|
)
|
26,692
|
|
|||||
|
|
|
|
|
|
||||||||||
Equity in net income of unconsolidated subsidiaries
|
102
|
|
—
|
|
5,541
|
|
—
|
|
5,643
|
|
|||||
Segment income/(loss)
|
13,988
|
|
21,880
|
|
11,663
|
|
(15,196
|
)
|
32,335
|
|
|||||
|
|
|
|
|
|
||||||||||
Total other expense
|
|
|
|
|
(27,809
|
)
|
|||||||||
Income before income taxes
|
|
|
|
|
$
|
4,526
|
|
||||||||
|
|
|
|
|
|
||||||||||
Segment assets at April 2, 2016
|
$
|
2,504,494
|
|
$
|
1,489,073
|
|
$
|
656,834
|
|
$
|
221,415
|
|
$
|
4,871,816
|
|
|
Feed Ingredients
|
Food Ingredients
|
Fuel Ingredients
|
Corporate
|
Total
|
||||||||||
Three Months Ended April 4, 2015
|
|
|
|
|
|
||||||||||
Net Sales
|
$
|
547,498
|
|
$
|
270,157
|
|
$
|
57,039
|
|
$
|
—
|
|
$
|
874,694
|
|
Cost of sales and operating expenses
|
424,006
|
|
216,637
|
|
43,874
|
|
4
|
|
684,521
|
|
|||||
Gross Margin
|
123,492
|
|
53,520
|
|
13,165
|
|
(4
|
)
|
190,173
|
|
|||||
|
|
|
|
|
|
||||||||||
Selling, general and administrative expense
|
48,023
|
|
25,476
|
|
4,040
|
|
9,092
|
|
86,631
|
|
|||||
Acquisition and integration costs
|
—
|
|
—
|
|
—
|
|
5,319
|
|
5,319
|
|
|||||
Depreciation and amortization
|
40,055
|
|
17,197
|
|
6,631
|
|
2,515
|
|
66,398
|
|
|||||
Segment operating income/(loss)
|
35,414
|
|
10,847
|
|
2,494
|
|
(16,930
|
)
|
31,825
|
|
|||||
|
|
|
|
|
|
||||||||||
Equity in net income/(loss) of unconsolidated subsidiaries
|
417
|
|
—
|
|
(2,225
|
)
|
—
|
|
(1,808
|
)
|
|||||
Segment income/(loss)
|
35,831
|
|
10,847
|
|
269
|
|
(16,930
|
)
|
30,017
|
|
|||||
|
|
|
|
|
|
||||||||||
Total other expense
|
|
|
|
|
(26,078
|
)
|
|||||||||
Income before income taxes
|
|
|
|
|
$
|
3,939
|
|
||||||||
|
|
|
|
|
|
||||||||||
Segment assets at January 2, 2016
|
$
|
2,438,869
|
|
$
|
1,448,014
|
|
$
|
631,968
|
|
$
|
241,768
|
|
$
|
4,760,619
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(16)
|
Related Party Transactions
|
|
Parent
|
Guarantors
|
Non-guarantors
|
Eliminations
|
Consolidated
|
||||||||||
ASSETS
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
1,233
|
|
$
|
2,080
|
|
$
|
144,013
|
|
$
|
—
|
|
$
|
147,326
|
|
Restricted cash
|
102
|
|
—
|
|
219
|
|
—
|
|
321
|
|
|||||
Accounts receivable
|
179,220
|
|
87,270
|
|
313,465
|
|
(203,609
|
)
|
376,346
|
|
|||||
Inventories
|
14,031
|
|
97,869
|
|
260,716
|
|
—
|
|
372,616
|
|
|||||
Income taxes refundable
|
8,930
|
|
—
|
|
2,895
|
|
—
|
|
11,825
|
|
|||||
Prepaid expenses
|
14,072
|
|
2,441
|
|
23,766
|
|
—
|
|
40,279
|
|
|||||
Other current assets
|
3,304
|
|
6,579
|
|
21,729
|
|
(20,042
|
)
|
11,570
|
|
|||||
Total current assets
|
220,892
|
|
196,239
|
|
766,803
|
|
(223,651
|
)
|
960,283
|
|
|||||
Investment in subsidiaries
|
4,101,825
|
|
1,141,644
|
|
837,604
|
|
(6,081,073
|
)
|
—
|
|
|||||
Property, plant and equipment, net
|
218,516
|
|
479,645
|
|
837,360
|
|
—
|
|
1,535,521
|
|
|||||
Intangible assets, net
|
16,772
|
|
317,561
|
|
457,833
|
|
—
|
|
792,166
|
|
|||||
Goodwill
|
21,860
|
|
549,690
|
|
697,746
|
|
—
|
|
1,269,296
|
|
|||||
Investment in unconsolidated subsidiaries
|
2,577
|
|
—
|
|
254,027
|
|
—
|
|
256,604
|
|
|||||
Other assets
|
34,242
|
|
499,305
|
|
331,596
|
|
(824,559
|
)
|
40,584
|
|
|||||
Deferred taxes
|
—
|
|
—
|
|
17,362
|
|
—
|
|
17,362
|
|
|||||
|
$
|
4,616,684
|
|
$
|
3,184,084
|
|
$
|
4,200,331
|
|
$
|
(7,129,283
|
)
|
$
|
4,871,816
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
|||||||
Current portion of long-term debt
|
$
|
20,309
|
|
$
|
—
|
|
$
|
46,324
|
|
$
|
(20,042
|
)
|
$
|
46,591
|
|
Accounts payable
|
37,233
|
|
204,116
|
|
122,189
|
|
(192,643
|
)
|
170,895
|
|
|||||
Income taxes payable
|
(383
|
)
|
373
|
|
7,042
|
|
—
|
|
7,032
|
|
|||||
Accrued expenses
|
64,955
|
|
25,350
|
|
148,000
|
|
(10,967
|
)
|
227,338
|
|
|||||
Total current liabilities
|
122,114
|
|
229,839
|
|
323,555
|
|
(223,652
|
)
|
451,856
|
|
|||||
Long-term debt, net of current portion
|
1,241,509
|
|
5,963
|
|
1,501,480
|
|
(824,559
|
)
|
1,924,393
|
|
|||||
Other noncurrent liabilities
|
57,358
|
|
—
|
|
38,758
|
|
—
|
|
96,116
|
|
|||||
Deferred income taxes
|
146,385
|
|
—
|
|
222,255
|
|
—
|
|
368,640
|
|
|||||
Total liabilities
|
1,567,366
|
|
235,802
|
|
2,086,048
|
|
(1,048,211
|
)
|
2,841,005
|
|
|||||
Total stockholders’ equity
|
3,049,318
|
|
2,948,282
|
|
2,114,283
|
|
(6,081,072
|
)
|
2,030,811
|
|
|||||
|
$
|
4,616,684
|
|
$
|
3,184,084
|
|
$
|
4,200,331
|
|
$
|
(7,129,283
|
)
|
$
|
4,871,816
|
|
|
Parent
|
Guarantors
|
Non-guarantors
|
Eliminations
|
Consolidated
|
||||||||||
ASSETS
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
3,443
|
|
$
|
3,993
|
|
$
|
149,448
|
|
$
|
—
|
|
$
|
156,884
|
|
Restricted cash
|
102
|
|
—
|
|
229
|
|
—
|
|
331
|
|
|||||
Accounts receivable
|
184,472
|
|
81,644
|
|
310,932
|
|
(205,656
|
)
|
371,392
|
|
|||||
Inventories
|
13,564
|
|
89,078
|
|
241,941
|
|
—
|
|
344,583
|
|
|||||
Income taxes refundable
|
7,695
|
|
—
|
|
4,268
|
|
—
|
|
11,963
|
|
|||||
Prepaid expenses
|
13,322
|
|
2,262
|
|
20,591
|
|
—
|
|
36,175
|
|
|||||
Other current assets
|
5,273
|
|
24
|
|
22,852
|
|
(17,689
|
)
|
10,460
|
|
|||||
Total current assets
|
227,871
|
|
177,001
|
|
750,261
|
|
(223,345
|
)
|
931,788
|
|
|||||
Investment in subsidiaries
|
4,072,855
|
|
1,141,644
|
|
837,604
|
|
(6,052,103
|
)
|
—
|
|
|||||
Property, plant and equipment, net
|
224,208
|
|
477,446
|
|
806,513
|
|
—
|
|
1,508,167
|
|
|||||
Intangible assets, net
|
17,794
|
|
326,231
|
|
438,324
|
|
—
|
|
782,349
|
|
|||||
Goodwill
|
21,860
|
|
549,690
|
|
661,552
|
|
—
|
|
1,233,102
|
|
|||||
Investment in unconsolidated subsidiary
|
—
|
|
—
|
|
247,238
|
|
—
|
|
247,238
|
|
|||||
Other assets
|
36,488
|
|
499,764
|
|
314,893
|
|
(809,522
|
)
|
41,623
|
|
|||||
Deferred income taxes
|
—
|
|
—
|
|
16,352
|
|
—
|
|
16,352
|
|
|||||
|
$
|
4,601,076
|
|
$
|
3,171,776
|
|
$
|
4,072,737
|
|
$
|
(7,084,970
|
)
|
$
|
4,760,619
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
|||||||
Current portion of long-term debt
|
$
|
20,328
|
|
$
|
—
|
|
$
|
42,527
|
|
$
|
(17,689
|
)
|
$
|
45,166
|
|
Accounts payable
|
6,981
|
|
210,926
|
|
122,136
|
|
(190,045
|
)
|
149,998
|
|
|||||
Income taxes payable
|
(383
|
)
|
373
|
|
6,689
|
|
—
|
|
6,679
|
|
|||||
Accrued expenses
|
82,854
|
|
29,037
|
|
143,547
|
|
(15,613
|
)
|
239,825
|
|
|||||
Total current liabilities
|
109,780
|
|
240,336
|
|
314,899
|
|
(223,347
|
)
|
441,668
|
|
|||||
Long-term debt, net of current portion
|
1,234,002
|
|
—
|
|
1,461,371
|
|
(809,522
|
)
|
1,885,851
|
|
|||||
Other noncurrent liabilities
|
57,578
|
|
1,999
|
|
38,232
|
|
—
|
|
97,809
|
|
|||||
Deferred income taxes
|
147,416
|
|
—
|
|
213,265
|
|
—
|
|
360,681
|
|
|||||
Total liabilities
|
1,548,776
|
|
242,335
|
|
2,027,767
|
|
(1,032,869
|
)
|
2,786,009
|
|
|||||
Total stockholders’ equity
|
3,052,300
|
|
2,929,441
|
|
2,044,970
|
|
(6,052,101
|
)
|
1,974,610
|
|
|||||
|
$
|
4,601,076
|
|
$
|
3,171,776
|
|
$
|
4,072,737
|
|
$
|
(7,084,970
|
)
|
$
|
4,760,619
|
|
|
Parent
|
Guarantors
|
Non-guarantors
|
Eliminations
|
Consolidated
|
||||||||||
Net sales
|
$
|
108,371
|
|
$
|
303,765
|
|
$
|
411,037
|
|
$
|
(43,532
|
)
|
$
|
779,641
|
|
Cost and expenses:
|
|
|
|
|
|
||||||||||
Cost of sales and operating expenses
|
89,483
|
|
236,336
|
|
316,606
|
|
(43,532
|
)
|
598,893
|
|
|||||
Selling, general and administrative expenses
|
35,893
|
|
13,136
|
|
32,440
|
|
—
|
|
81,469
|
|
|||||
Acquisition and integration costs
|
—
|
|
—
|
|
331
|
|
—
|
|
331
|
|
|||||
Depreciation and amortization
|
11,425
|
|
26,808
|
|
34,023
|
|
—
|
|
72,256
|
|
|||||
Total costs and expenses
|
136,801
|
|
276,280
|
|
383,400
|
|
(43,532
|
)
|
752,949
|
|
|||||
Operating income/(loss)
|
(28,430
|
)
|
27,485
|
|
27,637
|
|
—
|
|
26,692
|
|
|||||
|
|
|
|
|
|
|
|
|
|||||||
Interest expense
|
(15,522
|
)
|
4,377
|
|
(12,756
|
)
|
—
|
|
(23,901
|
)
|
|||||
Foreign currency gains/(losses)
|
(31
|
)
|
165
|
|
(2,737
|
)
|
—
|
|
(2,603
|
)
|
|||||
Other expense, net
|
(3,325
|
)
|
(5
|
)
|
2,025
|
|
—
|
|
(1,305
|
)
|
|||||
Equity in net income/(loss) of unconsolidated subsidiaries
|
(97
|
)
|
—
|
|
5,740
|
|
—
|
|
5,643
|
|
|||||
Earnings in investments in subsidiaries
|
28,971
|
|
—
|
|
—
|
|
(28,971
|
)
|
—
|
|
|||||
Income/(loss) before taxes
|
(18,434
|
)
|
32,022
|
|
19,909
|
|
(28,971
|
)
|
4,526
|
|
|||||
Income taxes (benefit)
|
(19,513
|
)
|
13,181
|
|
8,195
|
|
—
|
|
1,863
|
|
|||||
Net income attributable to noncontrolling interests
|
—
|
|
—
|
|
(1,584
|
)
|
—
|
|
(1,584
|
)
|
|||||
Net income/(loss) attributable to Darling
|
$
|
1,079
|
|
$
|
18,841
|
|
$
|
10,130
|
|
$
|
(28,971
|
)
|
$
|
1,079
|
|
|
|
|
|
|
|
|
Parent
|
Guarantors
|
Non-guarantors
|
Eliminations
|
Consolidated
|
||||||||||
Net sales
|
$
|
125,794
|
|
$
|
358,707
|
|
$
|
448,843
|
|
$
|
(58,650
|
)
|
$
|
874,694
|
|
Cost and expenses:
|
|
|
|
|
|
||||||||||
Cost of sales and operating expenses
|
103,616
|
|
284,503
|
|
355,052
|
|
(58,650
|
)
|
684,521
|
|
|||||
Selling, general and administrative expenses
|
33,130
|
|
14,868
|
|
38,633
|
|
—
|
|
86,631
|
|
|||||
Acquisition and integration costs
|
1,973
|
|
—
|
|
3,346
|
|
—
|
|
5,319
|
|
|||||
Depreciation and amortization
|
8,171
|
|
23,599
|
|
34,628
|
|
—
|
|
66,398
|
|
|||||
Total costs and expenses
|
146,890
|
|
322,970
|
|
431,659
|
|
(58,650
|
)
|
842,869
|
|
|||||
Operating income/(loss)
|
(21,096
|
)
|
35,737
|
|
17,184
|
|
—
|
|
31,825
|
|
|||||
|
|
|
|
|
|
|
|
|
|||||||
Interest expense
|
(15,160
|
)
|
4,848
|
|
(12,797
|
)
|
—
|
|
(23,109
|
)
|
|||||
Foreign currency gains/(losses)
|
(11
|
)
|
(304
|
)
|
(2,145
|
)
|
—
|
|
(2,460
|
)
|
|||||
Other expense, net
|
(1,181
|
)
|
211
|
|
461
|
|
—
|
|
(509
|
)
|
|||||
Equity in net loss of unconsolidated subsidiaries
|
—
|
|
—
|
|
(1,808
|
)
|
—
|
|
(1,808
|
)
|
|||||
Earnings in investments in subsidiaries
|
17,449
|
|
—
|
|
—
|
|
(17,449
|
)
|
—
|
|
|||||
Income/(loss) before taxes
|
(19,999
|
)
|
40,492
|
|
895
|
|
(17,449
|
)
|
3,939
|
|
|||||
Income taxes (benefit)
|
(20,108
|
)
|
21,742
|
|
481
|
|
—
|
|
2,115
|
|
|||||
Net income attributable to noncontrolling interests
|
—
|
|
—
|
|
(1,715
|
)
|
—
|
|
(1,715
|
)
|
|||||
Net income/(loss) attributable to Darling
|
$
|
109
|
|
$
|
18,750
|
|
$
|
(1,301
|
)
|
$
|
(17,449
|
)
|
$
|
109
|
|
|
|
|
|
|
|
|
Parent
|
Guarantors
|
Non-guarantors
|
Eliminations
|
Consolidated
|
||||||||||
Net income/(loss)
|
$
|
2,663
|
|
$
|
18,841
|
|
$
|
10,130
|
|
$
|
(28,971
|
)
|
$
|
2,663
|
|
Other comprehensive income/(loss), net of tax:
|
|
|
|
|
|
||||||||||
Foreign currency translation
|
—
|
|
—
|
|
57,531
|
|
—
|
|
57,531
|
|
|||||
Pension adjustments
|
658
|
|
—
|
|
68
|
|
—
|
|
726
|
|
|||||
Corn option derivative adjustments
|
(706
|
)
|
—
|
|
—
|
|
—
|
|
(706
|
)
|
|||||
Total other comprehensive income/(loss), net of tax
|
(48
|
)
|
—
|
|
57,599
|
|
—
|
|
57,551
|
|
|||||
Total comprehensive income/(loss)
|
2,615
|
|
18,841
|
|
67,729
|
|
(28,971
|
)
|
60,214
|
|
|||||
Total comprehensive loss attributable to noncontrolling interest
|
—
|
|
—
|
|
(420
|
)
|
—
|
|
(420
|
)
|
|||||
Total comprehensive income/(loss) attributable to Darling
|
$
|
2,615
|
|
$
|
18,841
|
|
$
|
68,149
|
|
$
|
(28,971
|
)
|
$
|
60,634
|
|
|
|
|
|
|
|
|
Parent
|
Guarantors
|
Non-guarantors
|
Eliminations
|
Consolidated
|
||||||||||
Net income/(loss)
|
$
|
1,824
|
|
$
|
18,750
|
|
$
|
(1,301
|
)
|
$
|
(17,449
|
)
|
$
|
1,824
|
|
Other comprehensive income/(loss), net of tax:
|
|
|
|
|
|
||||||||||
Foreign currency translation
|
—
|
|
—
|
|
(93,315
|
)
|
—
|
|
(93,315
|
)
|
|||||
Pension adjustments
|
729
|
|
—
|
|
40
|
|
—
|
|
769
|
|
|||||
Corn option derivative adjustments
|
38
|
|
—
|
|
—
|
|
—
|
|
38
|
|
|||||
Total other comprehensive income/(loss), net of tax
|
767
|
|
—
|
|
(93,275
|
)
|
—
|
|
(92,508
|
)
|
|||||
Total comprehensive income/(loss)
|
2,591
|
|
18,750
|
|
(94,576
|
)
|
(17,449
|
)
|
(90,684
|
)
|
|||||
Total comprehensive income attributable to noncontrolling interest
|
—
|
|
—
|
|
7,042
|
|
—
|
|
7,042
|
|
|||||
Total comprehensive income/(loss) attributable to Darling
|
$
|
2,591
|
|
$
|
18,750
|
|
$
|
(101,618
|
)
|
$
|
(17,449
|
)
|
$
|
(97,726
|
)
|
|
|
|
|
|
|
|
Parent
|
Guarantors
|
Non-guarantors
|
Eliminations
|
Consolidated
|
||||||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
||||||||||
Net income/(loss)
|
$
|
2,663
|
|
$
|
18,841
|
|
$
|
10,130
|
|
$
|
(28,971
|
)
|
$
|
2,663
|
|
Earnings in investments in subsidiaries
|
(28,971
|
)
|
—
|
|
—
|
|
28,971
|
|
—
|
|
|||||
Other operating cash flows
|
34,573
|
|
(4,953
|
)
|
12,760
|
|
—
|
|
42,380
|
|
|||||
Net cash provided by operating activities
|
8,265
|
|
13,888
|
|
22,890
|
|
—
|
|
45,043
|
|
|||||
|
|
|
|
|
|
||||||||||
Cash flows from investing activities:
|
|
|
|
|
|
||||||||||
Capital expenditures
|
(11,065
|
)
|
(21,764
|
)
|
(20,546
|
)
|
—
|
|
(53,375
|
)
|
|||||
Acquisitions
|
—
|
|
—
|
|
(8,511
|
)
|
—
|
|
(8,511
|
)
|
|||||
Note receivable from affiliates
|
—
|
|
—
|
|
(5,963
|
)
|
5,963
|
|
—
|
|
|||||
Gross proceeds from sale of property, plant and equipment and other assets
|
945
|
|
—
|
|
479
|
|
—
|
|
1,424
|
|
|||||
Proceeds from insurance settlements
|
—
|
|
—
|
|
1,181
|
|
—
|
|
1,181
|
|
|||||
Payments related to routes and other intangibles
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||
Net cash used in investing activities
|
(10,120
|
)
|
(21,764
|
)
|
(33,360
|
)
|
5,963
|
|
(59,281
|
)
|
|||||
|
|
|
|
|
|
||||||||||
Cash flows from financing activities:
|
|
|
|
|
|
||||||||||
Proceeds for long-term debt
|
—
|
|
—
|
|
8,760
|
|
—
|
|
8,760
|
|
|||||
Payments on long-term debt
|
(5,291
|
)
|
—
|
|
(10,916
|
)
|
—
|
|
(16,207
|
)
|
|||||
Borrowings from revolving facilities
|
33,000
|
|
—
|
|
—
|
|
—
|
|
33,000
|
|
|||||
Payments on revolving facilities
|
(21,000
|
)
|
—
|
|
—
|
|
—
|
|
(21,000
|
)
|
|||||
Borrowings from affiliates
|
—
|
|
5,963
|
|
—
|
|
(5,963
|
)
|
—
|
|
|||||
Issuances of common stock
|
45
|
|
—
|
|
—
|
|
—
|
|
45
|
|
|||||
Repurchase of treasury stock
|
(5,000
|
)
|
—
|
|
—
|
|
—
|
|
(5,000
|
)
|
|||||
Contributions from parent
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||
Minimum withholding taxes paid on stock awards
|
(1,663
|
)
|
—
|
|
(125
|
)
|
—
|
|
(1,788
|
)
|
|||||
Excess tax benefits from stock-based compensation
|
(446
|
)
|
—
|
|
—
|
|
—
|
|
(446
|
)
|
|||||
Net cash used in financing activities
|
(355
|
)
|
5,963
|
|
(2,281
|
)
|
(5,963
|
)
|
(2,636
|
)
|
|||||
|
|
|
|
|
|
||||||||||
Effect of exchange rate changes on cash
|
—
|
|
—
|
|
7,316
|
|
—
|
|
7,316
|
|
|||||
|
|
|
|
|
|
||||||||||
Net decrease in cash and cash equivalents
|
(2,210
|
)
|
(1,913
|
)
|
(5,435
|
)
|
—
|
|
(9,558
|
)
|
|||||
Cash and cash equivalents at beginning of year
|
3,443
|
|
3,993
|
|
149,448
|
|
—
|
|
156,884
|
|
|||||
Cash and cash equivalents at end of year
|
$
|
1,233
|
|
$
|
2,080
|
|
$
|
144,013
|
|
$
|
—
|
|
$
|
147,326
|
|
|
Parent
|
Guarantors
|
Non-guarantors
|
Eliminations
|
Consolidated
|
||||||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||||||
Net income/(loss)
|
$
|
1,824
|
|
$
|
18,750
|
|
$
|
(1,301
|
)
|
$
|
(17,449
|
)
|
$
|
1,824
|
|
Earnings in investments in subsidiaries
|
(17,449
|
)
|
—
|
|
—
|
|
17,449
|
|
—
|
|
|||||
Other operating cash flows
|
48,023
|
|
(30,966
|
)
|
40,359
|
|
—
|
|
57,416
|
|
|||||
Net cash provided by operating activities
|
32,398
|
|
(12,216
|
)
|
39,058
|
|
—
|
|
59,240
|
|
|||||
|
|
|
|
|
|
||||||||||
Cash flows from investing activities:
|
|
|
|
|
|
||||||||||
Capital expenditures
|
(12,243
|
)
|
(19,393
|
)
|
(19,202
|
)
|
—
|
|
(50,838
|
)
|
|||||
Investment in subsidiaries and affiliates
|
(20
|
)
|
(29,541
|
)
|
29,541
|
|
20
|
|
—
|
|
|||||
Note receivable from affiliates
|
—
|
|
51,019
|
|
(51,019
|
)
|
—
|
|
—
|
|
|||||
Gross proceeds from sale of property, plant and equipment and other assets
|
142
|
|
259
|
|
133
|
|
—
|
|
534
|
|
|||||
Proceeds from insurance settlements
|
71
|
|
270
|
|
—
|
|
—
|
|
341
|
|
|||||
Payments related to routes and other intangibles
|
—
|
|
—
|
|
(753
|
)
|
—
|
|
(753
|
)
|
|||||
Net cash used in investing activities
|
(12,050
|
)
|
2,614
|
|
(41,300
|
)
|
20
|
|
(50,716
|
)
|
|||||
|
|
|
|
|
|
||||||||||
Cash flows from financing activities:
|
|
|
|
|
|
||||||||||
Proceeds for long-term debt
|
—
|
|
—
|
|
5,943
|
|
—
|
|
5,943
|
|
|||||
Payments on long-term debt
|
(4,000
|
)
|
(20
|
)
|
(9,582
|
)
|
—
|
|
(13,602
|
)
|
|||||
Borrowings from revolving credit facility
|
5,000
|
|
—
|
|
22,428
|
|
—
|
|
27,428
|
|
|||||
Payments on revolving credit facility
|
(25,000
|
)
|
—
|
|
(12,943
|
)
|
—
|
|
(37,943
|
)
|
|||||
Net cash overdraft financing
|
—
|
|
—
|
|
31,162
|
|
—
|
|
31,162
|
|
|||||
Issuances of common stock
|
81
|
|
—
|
|
—
|
|
—
|
|
81
|
|
|||||
Contributions from parent
|
—
|
|
—
|
|
20
|
|
(20
|
)
|
—
|
|
|||||
Minimum withholding taxes paid on stock awards
|
(4,469
|
)
|
—
|
|
—
|
|
—
|
|
(4,469
|
)
|
|||||
Excess tax benefits from stock-based compensation
|
(35
|
)
|
—
|
|
—
|
|
—
|
|
(35
|
)
|
|||||
Distributions to noncontolling interests
|
—
|
|
—
|
|
(38
|
)
|
—
|
|
(38
|
)
|
|||||
Net cash used in financing activities
|
(28,423
|
)
|
(20
|
)
|
36,990
|
|
(20
|
)
|
8,527
|
|
|||||
|
|
|
|
|
|
||||||||||
Effect of exchange rate changes on cash
|
—
|
|
—
|
|
(13,704
|
)
|
—
|
|
(13,704
|
)
|
|||||
|
|
|
|
|
|
||||||||||
Net increase/(decrease) in cash and cash equivalents
|
(8,075
|
)
|
(9,622
|
)
|
21,044
|
|
—
|
|
3,347
|
|
|||||
Cash and cash equivalents at beginning of year
|
10,447
|
|
14,460
|
|
83,877
|
|
—
|
|
108,784
|
|
|||||
Cash and cash equivalents at end of year
|
$
|
2,372
|
|
$
|
4,838
|
|
$
|
104,921
|
|
$
|
—
|
|
$
|
112,131
|
|
•
|
$0.2 million ($0.00 per diluted share) associated with enterprise resource planning (“ERP”) integration at the Company's Canadian subsidiary.
|
•
|
$2.9 million ($0.02 per diluted share) associated with the integration of VION Ingredients and Rothsay related to a staff reduction in Angoulême, France and the implementation of internal controls over financial reporting per the Sarbanes-Oxley Act of 2002 during the first three months of fiscal 2015.
|
|
Three Months Ended
|
|||||
(dollars in thousands)
|
April 2,
2016 |
April 4,
2015 |
||||
Net income/(loss) attributable to Darling
|
$
|
1,079
|
|
$
|
109
|
|
Depreciation and amortization
|
72,256
|
|
66,398
|
|
||
Interest expense
|
23,901
|
|
23,109
|
|
||
Income tax expense/(benefit)
|
1,863
|
|
2,115
|
|
||
Foreign currency loss/(gain)
|
2,603
|
|
2,460
|
|
||
Other expense/(income), net
|
1,305
|
|
509
|
|
||
Equity in net (income)/loss of unconsolidated subsidiaries
|
(5,643
|
)
|
1,808
|
|
||
Net (loss)/income attributable to non-controlling interests
|
1,584
|
|
1,715
|
|
||
Adjusted EBITDA
|
$
|
98,948
|
|
$
|
98,223
|
|
|
|
|
||||
Acquisition and integration-related expenses
|
331
|
|
5,319
|
|
||
Pro forma Adjusted EBITDA (Non-GAAP)
|
$
|
99,279
|
|
$
|
103,542
|
|
|
|
|
||||
Foreign currency exchange impact
|
2,260
|
|
—
|
|
||
Pro forma Adjusted EBITDA to Foreign Currency (Non-GAAP)
|
$
|
101,539
|
|
$
|
103,542
|
|
|
|
|
||||
DGD Joint Venture Adjusted EBITDA (Darling's Share) (1)
|
$
|
9,629
|
|
$
|
2,346
|
|
|
Three Months Ended
|
|||||
(dollars in thousands)
|
April 2,
2016 |
January 2,
2016 |
||||
Net income/(loss) attributable to Darling
|
$
|
1,079
|
|
$
|
84,429
|
|
Depreciation and amortization
|
72,256
|
|
69,934
|
|
||
Interest expense
|
23,901
|
|
23,308
|
|
||
Income tax expense/(benefit)
|
1,863
|
|
(1,138
|
)
|
||
Foreign currency loss/(gain)
|
2,603
|
|
1,612
|
|
||
Other expense/(income), net
|
1,305
|
|
6,135
|
|
||
Equity in net (income)/loss of unconsolidated subsidiaries
|
(5,643
|
)
|
(83,073
|
)
|
||
Net (loss)/income attributable to non-controlling interests
|
1,584
|
|
1,446
|
|
||
Adjusted EBITDA
|
$
|
98,948
|
|
$
|
102,653
|
|
|
|
|
||||
Acquisition and integration-related expenses
|
331
|
|
492
|
|
||
Pro forma Adjusted EBITDA (Non-GAAP)
|
$
|
99,279
|
|
$
|
103,145
|
|
|
|
|
||||
Foreign currency exchange impact
|
(435
|
)
|
—
|
|
||
Pro forma Adjusted EBITDA to Foreign Currency (Non-GAAP)
|
$
|
98,844
|
|
$
|
103,145
|
|
|
|
|
||||
DGD Joint Venture Adjusted EBITDA (Darling's Share) (1)
|
$
|
9,629
|
|
$
|
86,548
|
|
|
Avg. Price
1st Quarter
2016
|
Avg. Price
1st Quarter
2015
|
Increase/(Decrease)
|
%
Increase/(Decrease)
|
|
Jacobsen Index:
|
|
|
|
|
|
MBM (Illinois)
|
$ 220.98/ton
|
$ 385.12/ton
|
$ (164.14)/ton
|
(42.6
|
)%
|
Feed Grade PM (Mid-South)
|
$ 249.10/ton
|
$ 465.00/ton
|
$ (215.90)/ton
|
(46.4
|
)%
|
Pet Food PM (Mid-South)
|
$ 506.31/ton
|
$ 655.12/ton
|
$ (148.81)/ton
|
(22.7
|
)%
|
Feathermeal (Mid-South)
|
$ 277.21/ton
|
$ 523.77/ton
|
$ (246.56)/ton
|
(47.1
|
)%
|
BFT (Chicago)
|
$ 27.07/cwt
|
$ 29.66/cwt
|
$ (2.59)/cwt
|
(8.7
|
)%
|
YG (Illinois)
|
$ 21.25/cwt
|
$ 24.58/cwt
|
$ (3.33)/cwt
|
(13.5
|
)%
|
Corn (Illinois)
|
$ 3.81/bushel
|
$ 3.90/bushel
|
$ (0.09)/bushel
|
(2.3
|
)%
|
Thomson Reuters:
|
|
|
|
|
|
Palm Oil (CIF Rotterdam)
|
$ 632.00/MT
|
$ 656.00/MT
|
$ (24.00)/MT
|
(3.7
|
)%
|
Soy meal (CIF Rotterdam)
|
$ 328.00/MT
|
$ 436.00/MT
|
$ (108.00)/MT
|
(24.8
|
)%
|
|
Avg. Price
1st Quarter
2016
|
Avg. Price
4th Quarter
2015
|
Increase/(Decrease)
|
%
Increase/(Decrease)
|
|
Jacobsen Index:
|
|
|
|
|
|
MBM (Illinois)
|
$ 220.98/ton
|
$ 249.29/ton
|
$ (28.31)/ton
|
(11.4
|
)%
|
Feed Grade PM (Mid-South)
|
$ 249.10/ton
|
$ 334.67/ton
|
$ (85.57)/ton
|
(25.6
|
)%
|
Pet Food PM (Mid-South)
|
$ 506.31/ton
|
$ 469.49/ton
|
$ 36.82/ton
|
7.8
|
%
|
Feathermeal (Mid-South)
|
$ 277.21/ton
|
$ 367.06/ton
|
$ (89.85)/ton
|
(24.5
|
)%
|
BFT (Chicago)
|
$ 27.07/cwt
|
$ 21.18/cwt
|
$ 5.89/cwt
|
27.8
|
%
|
YG (Illinois)
|
$ 21.25/cwt
|
$ 17.86/cwt
|
$ 3.39/cwt
|
19.0
|
%
|
Corn (Illinois)
|
$ 3.81/bushel
|
$ 3.95/bushel
|
$ ( 0.14)/bushel
|
(3.5
|
)%
|
Thomson Reuters:
|
|
|
|
|
|
Palm Oil (CIF Rotterdam)
|
$ 632.00/MT
|
$ 563.00/MT
|
$ 69.00/MT
|
12.3
|
%
|
Soy meal (CIF Rotterdam)
|
$ 328.00/MT
|
$ 352.00/MT
|
$ (24.00)/MT
|
(6.8
|
)%
|
|
Fats
|
Proteins
|
Other Rendering
|
Total Rendering
|
Used Cooking Oil
|
Bakery
|
Other
|
Total
|
||||||||||||||||
Net sales three months ended April 4, 2015
|
$
|
146.7
|
|
$
|
220.0
|
|
$
|
67.7
|
|
$
|
434.4
|
|
$
|
36.1
|
|
$
|
53.8
|
|
$
|
23.2
|
|
$
|
547.5
|
|
Increase/(decrease) in sales volumes
|
4.3
|
|
10.0
|
|
—
|
|
14.3
|
|
1.5
|
|
1.7
|
|
—
|
|
17.5
|
|
||||||||
Increase/(decrease) in finished good prices
|
(24.2
|
)
|
(55.4
|
)
|
—
|
|
(79.6
|
)
|
(3.1
|
)
|
(1.0
|
)
|
—
|
|
(83.7
|
)
|
||||||||
Increase/(decrease) due to currency exchange rates
|
(1.5
|
)
|
(2.6
|
)
|
(1.1
|
)
|
(5.2
|
)
|
(0.1
|
)
|
—
|
|
—
|
|
(5.3
|
)
|
||||||||
Other change
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
0.2
|
|
0.2
|
|
||||||||
Total change
|
(21.4
|
)
|
(48.0
|
)
|
(1.1
|
)
|
(70.5
|
)
|
(1.7
|
)
|
0.7
|
|
0.2
|
|
(71.3
|
)
|
||||||||
Net sales three months ended April 2, 2016
|
$
|
125.3
|
|
$
|
172.0
|
|
$
|
66.6
|
|
$
|
363.9
|
|
$
|
34.4
|
|
$
|
54.5
|
|
$
|
23.4
|
|
$
|
476.2
|
|
•
|
Segment operating income
|
•
|
Raw material processed
|
•
|
Gross margin percentage
|
•
|
Foreign currency
|
(in thousands, except percentages)
|
Feed Ingredients
|
Food Ingredients
|
Fuel Ingredients
|
Corporate
|
Total
|
||||||||||
Three Months Ended April 2, 2016
|
|
|
|
|
|
||||||||||
Net Sales
|
$
|
476,171
|
|
$
|
247,897
|
|
$
|
55,573
|
|
$
|
—
|
|
$
|
779,641
|
|
Cost of sales and operating expenses
|
372,657
|
|
185,554
|
|
40,682
|
|
—
|
|
598,893
|
|
|||||
Gross Margin
|
103,514
|
|
62,343
|
|
14,891
|
|
—
|
|
180,748
|
|
|||||
|
|
|
|
|
|
||||||||||
Gross Margin %
|
21.7
|
%
|
25.1
|
%
|
26.8
|
%
|
—
|
%
|
23.2
|
%
|
|||||
|
|
|
|
|
|
||||||||||
Selling, general and administrative expense
|
45,251
|
|
23,759
|
|
1,850
|
|
10,609
|
|
81,469
|
|
|||||
Acquisition and integration costs
|
—
|
|
—
|
|
—
|
|
331
|
|
331
|
|
|||||
Depreciation and amortization
|
44,377
|
|
16,704
|
|
6,919
|
|
4,256
|
|
72,256
|
|
|||||
Segment operating income/(loss)
|
13,886
|
|
21,880
|
|
6,122
|
|
(15,196
|
)
|
26,692
|
|
|||||
|
|
|
|
|
|
||||||||||
Equity in net income of unconsolidated subsidiaries
|
102
|
|
—
|
|
5,541
|
|
—
|
|
5,643
|
|
|||||
Segment income/(loss)
|
13,988
|
|
21,880
|
|
11,663
|
|
(15,196
|
)
|
32,335
|
|
(in thousands, except percentages)
|
Feed Ingredients
|
Food Ingredients
|
Fuel Ingredients
|
Corporate
|
Total
|
||||||||||
Three Months Ended April 4, 2015
|
|
|
|
|
|
||||||||||
Net Sales
|
$
|
547,498
|
|
$
|
270,157
|
|
$
|
57,039
|
|
$
|
—
|
|
$
|
874,694
|
|
Cost of sales and operating expenses
|
424,006
|
|
216,637
|
|
43,874
|
|
4
|
|
684,521
|
|
|||||
Gross Margin
|
123,492
|
|
53,520
|
|
13,165
|
|
(4
|
)
|
190,173
|
|
|||||
|
|
|
|
|
|
||||||||||
Gross Margin %
|
22.6
|
%
|
19.8
|
%
|
23.1
|
%
|
—
|
%
|
21.7
|
%
|
|||||
|
|
|
|
|
|
||||||||||
Selling, general and administrative expense
|
48,023
|
|
25,476
|
|
4,040
|
|
9,092
|
|
86,631
|
|
|||||
Acquisition and integration costs
|
—
|
|
—
|
|
—
|
|
5,319
|
|
5,319
|
|
|||||
Depreciation and amortization
|
40,055
|
|
17,197
|
|
6,631
|
|
2,515
|
|
66,398
|
|
|||||
Segment operating income/(loss)
|
35,414
|
|
10,847
|
|
2,494
|
|
(16,930
|
)
|
31,825
|
|
|||||
|
|
|
|
|
|
||||||||||
Equity in net income/(loss) of unconsolidated subsidiaries
|
417
|
|
—
|
|
(2,225
|
)
|
—
|
|
(1,808
|
)
|
|||||
Segment income/(loss)
|
35,831
|
|
10,847
|
|
269
|
|
(16,930
|
)
|
30,017
|
|
(percentages)
|
Feed Ingredients
|
Food Ingredients
|
Fuel Ingredients
|
Corporate
|
Total
|
|||||
Three Months Ended April 2, 2016
|
|
|
|
|
|
|||||
Gross Margin %
|
21.7
|
%
|
25.1
|
%
|
26.8
|
%
|
—
|
%
|
23.2
|
%
|
(percentages)
|
Feed Ingredients
|
Food Ingredients
|
Fuel Ingredients
|
Corporate
|
Total
|
|||||
Three Months Ended April 4, 2015
|
|
|
|
|
|
|||||
Gross Margin %
|
22.6
|
%
|
19.8
|
%
|
23.1
|
%
|
—
|
%
|
21.7
|
%
|
Senior Notes:
|
|
||
5.375 % Notes due 2022
|
$
|
500,000
|
|
Less unamortized deferred loan costs
|
(8,636
|
)
|
|
Carrying value of 5.375% Notes due 2022
|
$
|
491,364
|
|
|
|
||
4.75 % Notes due 2022 - Denominated in euros
|
$
|
588,079
|
|
Less unamortized deferred loan costs
|
(10,846
|
)
|
|
Carrying value of 4.75% Notes due 2022
|
$
|
577,233
|
|
|
|
||
Amended Credit Agreement:
|
|
||
Term Loan A
|
$
|
277,606
|
|
Less unamortized deferred loan costs
|
(1,433
|
)
|
|
Carrying value of Term Loan A
|
276,173
|
|
|
|
|
||
Term Loan B
|
$
|
588,000
|
|
Less unamortized deferred loan costs
|
(7,408
|
)
|
|
Carrying value of Term Loan B
|
$
|
580,592
|
|
|
|
||
Revolving Credit Facility:
|
|
||
Maximum availability
|
$
|
1,000,000
|
|
Borrowings outstanding
|
21,968
|
|
|
Letters of credit issued
|
33,841
|
|
|
Availability
|
$
|
944,191
|
|
•
|
As of
April 2, 2016
, the Company had availability of $
944.2 million
under the revolving loan facility, taking into account an aggregate of $
22.0 million
of outstanding borrowings and letters of credit issued of $
33.8 million
. The revolving loan facility will mature on September 27, 2018.
|
•
|
As of
April 2, 2016
, the Company has borrowed all $
350.0 million
under the term loan A facility and repaid approximately CAD$
17.8 million
and $
23.8 million
, which when repaid, cannot be reborrowed. The term loan A facility is repayable in quarterly installments as follows: for the first eight quarters following January 6, 2014,
1.25%
of the original principal amount of the term loan A facility, for the ninth through sixteenth quarters following January 6, 2014,
1.875%
of the original principal amount of the term loan A facility, and for each quarterly installment after such sixteenth installment until September 27, 2018,
3.75%
of the original principal amount of the term loan A facility. The term loan A facility will mature on September 27, 2018.
|
•
|
As of
April 2, 2016
, the Company has borrowed all $
1.3 billion
under the terms of the term loan B facility and repaid approximately €
510.0 million
and $
12.0 million
, which when repaid, cannot be reborrowed. The term loan B facility is repayable in quarterly installments of
0.25%
of the aggregate principal amount of the relevant term loan B facility on the last day of each March, June, September and December of each year commencing on the last day of each month falling on or after the last day of the first full quarter following January 6, 2014, and continuing until the last day of each quarter period ending immediately prior to January 7, 2021; and one final installment in the amount of the relevant term loan B facility then outstanding, due on January 7, 2021. The term loan B facility will mature on January 7, 2021.
|
•
|
The interest rate applicable to any borrowings under the term loan A facility and the revolving loan facility will equal either LIBOR/euro interbank offered rate/CDOR plus
2.75%
per annum or base rate/Canadian prime rate plus
1.75%
per annum, subject to certain step-downs based on the Company's total leverage ratio. The interest rate applicable to any borrowings under the term loan B facility will equal (a) for U.S. dollar term loans, either the base rate plus
1.50%
or LIBOR plus
2.50%
, and (b) for euro term loans, the euro interbank offered rate plus
2.75%
, in each case subject to a step-down based on Darling’s total leverage ratio. For term loan B loans, the LIBOR rate shall not be less than
0.75%
.
|
Other commercial commitments:
|
|
||
Standby letters of credit
|
$
|
33,841
|
|
Foreign bank guarantees
|
9,539
|
|
|
Total other commercial commitments:
|
$
|
43,380
|
|
Functional Currency
|
|
Contract Currency
|
|
Range of
|
U.S.
|
||||||
Type
|
Amount
|
|
Type
|
Amount
|
|
Hedge rates
|
Equivalent
|
||||
Brazilian real
|
30,288
|
|
|
Euro
|
6,850
|
|
|
4.09 - 4.83
|
$
|
8,375
|
|
Brazilian real
|
83,417
|
|
|
U.S. dollar
|
20,825
|
|
|
3.66 - 4.38
|
20,825
|
|
|
Euro
|
238,636
|
|
|
U.S. dollar
|
267,822
|
|
|
1.09 - 1.13
|
267,822
|
|
|
Euro
|
8,737
|
|
|
Polish zloty
|
38,000
|
|
|
4.34 - 4.38
|
9,977
|
|
|
Euro
|
3,536
|
|
|
Japanese yen
|
452,478
|
|
|
124.03 - 131.75
|
4,038
|
|
|
Euro
|
30,555
|
|
|
Chinese renminbi
|
225,110
|
|
|
7.37
|
34,890
|
|
|
Euro
|
9,673
|
|
|
Australian dollar
|
14,400
|
|
|
1.49
|
11,045
|
|
|
Polish zloty
|
17,014
|
|
|
Euro
|
3,894
|
|
|
4.26 - 4.49
|
4,584
|
|
|
British pound
|
87
|
|
|
U.S. dollar
|
125
|
|
|
1.43
|
125
|
|
|
Japanese yen
|
45,817
|
|
|
U.S. dollar
|
383
|
|
|
116.51 - 122.56
|
383
|
|
|
|
|
|
|
|
|
|
$
|
362,064
|
|
ISSUER PURCHASES OF EQUITY SECURITIES
|
||||||||||||||
Period
|
|
Total Number of Shares Purchased (1)
|
|
Average Price Paid per Share
(2)
|
|
Total Number of Shares Purchased as part of Publicly Announced Plans or Programs (4)
|
|
Maximum Number (or Appropriate Dollar Value) of Shares that may yet be Purchased Under the Plans or Programs at End of Period.
|
||||||
January 2016:
|
|
|
|
|
|
|
|
|
||||||
January 3, 2016 through January 30, 2016
|
|
561,262
|
|
|
8.89
|
|
|
561,262
|
|
|
$
|
89,109,112
|
|
|
February 2016:
|
|
|
|
|
|
|
|
|
||||||
January 31, 2016 through February 27, 2016
|
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
89,109,112
|
|
|
March 2016:
|
|
|
|
|
|
|
|
|
||||||
February 28, 2016 through April 2, 2016
|
|
129,226
|
|
(3
|
)
|
12.02
|
|
|
—
|
|
|
$
|
89,109,112
|
|
Total
|
|
690,488
|
|
|
9.47
|
|
|
561,262
|
|
|
$
|
89,109,112
|
|
|
10.1
|
Form of Performance Unit Award Agreement for use in connection with awards under the 2012 Omnibus Incentive Plan.
|
||
|
10.2
|
Form of Stock Option Notice and Agreement for use in connection with awards under the 2012 Omnibus Incentive Plan.
|
||
|
31.1
|
Certification pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, of Randall C. Stuewe, the Chief Executive Officer of the Company.
|
||
|
31.2
|
Certification pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, of John O. Muse, the Chief Financial Officer of the Company.
|
||
|
32
|
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, of Randall C. Stuewe, the Chief Executive Officer of the Company, and of John O. Muse, the Chief Financial Officer of the Company.
|
||
|
101
|
Interactive Data Files Pursuant to Rule 405 of Regulation S-T: (i) Consolidated Balance Sheets as of April 2, 2016 and January 2, 2016; (ii) Consolidated Statements of Operations for the three months ended April 2, 2016 and April 4, 2015; (iii) Consolidated Statements of Comprehensive Income for the three months ended April 2, 2016 and April 4, 2015; (iv) Consolidated Statements of Cash Flows for the three months ended April 2, 2016 and April 4, 2015; (v) Notes to the Consolidated Financial Statements.
|
|
|
DARLING INGREDIENTS INC.
|
|
|
|
|
|
|
|
|
|
Date:
|
May 12, 2016
|
By:
|
/s/ Randall C. Stuewe
|
|
|
|
Randall C. Stuewe
|
|
|
|
Chairman and
|
|
|
|
Chief Executive Officer
|
Date:
|
May 12, 2016
|
By:
|
/s/ John O. Muse
|
|
|
|
John O. Muse
|
|
|
|
Executive Vice President
|
|
|
|
Chief Financial Officer
|
|
|
|
(Principal Financial Officer)
|
(a)
|
General.
Subject to the requirements of Sections 2(b) and 2(c), the Grantee shall vest in his or her Performance Units based on the achievement of the performance-based conditions, as determined pursuant to
Appendix A
of this Agreement.
|
(b)
|
Written Certification of Performance Results
.
Within 60 days following the end of the Performance Period, the Committee shall determine the vesting percentage in accordance with the terms of this Agreement. The vesting and settlement of the Performance Units is conditioned on the Committee first certifying in writing the performance results for the applicable Performance Period.
|
(c)
|
Employment Requirement.
No Performance Units shall become earned and vested following the Grantee’s separation from Service during the Performance Period, except as expressly provided in Section 2(d) below.
|
(d)
|
Termination of Service.
Except as otherwise provided in this Section, if the Grantee’s Service terminates prior to the end of the Performance Period for any reason, then the Performance Units shall be immediately forfeited.
|
(i)
|
Termination Due to Death or Disability.
If
the Grantee’s Service terminates as a result of the Grantee’s death or Disability prior to the end of the Performance Period, then the Grantee shall vest in a prorated portion of the Target Award, with such proration determined by multiplying the Target Award by the Pro-Rata Fraction. Subject to Section 4(n), within 90 days following the date of the Grantee’s termination of Service due to death or Disability, the Company shall issue or deliver Shares for the number of Performance Units that vest pursuant to this Section 2(d)(i) to the Grantee or Grantee’s beneficiary, as applicable.
|
(ii)
|
Termination without Cause or for Good Reason.
If the Company terminates the Grantee’s Service without Cause or the Grantee terminates his or her Service for Good
|
|
|
(e)
|
Change of Control.
If a Change of Control occurs prior to the end of the Performance Period, then the number of Performance Units that are eligible for vesting shall be based on the greater of (i) the projected level of performance through the end of the Performance Period, as determined by the Committee prior to the date of the Change of Control based on performance through the date of such determination, and (ii) the Target Award, and the Performance Units shall be settled as follows: (A) if the Grantee remains in continuous Service through the end of the Performance Period, then the vested Performance Units shall be settled in accordance with Section 3(a), and (B) if, prior to the end of the Performance Period and following such Change of Control, the Grantee’s continuous Service is terminated by the Company without Cause, due to death or Disability or by the Grantee for Good Reason, then the vested Performance Units shall be settled within 90 days following such termination of Service, subject to Section 4(n). Notwithstanding the foregoing, if the Performance Units are not effectively assumed or continued by the surviving or acquiring corporation in such Change of Control (as determined by the Committee prior to the date of the Change of Control), then the vested Performance Units shall be distributed within thirty (30) days of such Change of Control;
provided
,
however
, if the Change of Control was not a “change in control event” within the meaning of Section 409A of the Code or to the extent distribution would be impermissible under Section 409A of the Code, then the vested Performance Units shall be settled upon the earlier to occur of (A) the date specified in Section 3(a) and (B) the Grantee’s termination of Service, subject to Section 4(n).
|
(f)
|
Fractional Shares.
Only a whole number of Shares will be issued in respect of vested Performance Units. If the number of Performance Units that are scheduled to vest pursuant to
Appendix A
is with respect to a fractional number of Shares, such number of Shares shall be rounded down to the nearest whole number, with any fractional portion forfeited.
|
(g)
|
Forfeiture.
To the extent any of the Performance Units fail to vest under this Section 2, then such Performance Units shall be immediately forfeited and all of the Grantee’s rights to receive Shares pursuant to such Performance Units shall immediately terminate without any payment of consideration by the Company.
|
|
|
(a)
|
Settlement in Shares; Post-Vesting Holding Period.
Subject to Sections 2 and 4(n) of this Agreement, settlement of the vested Performance Units, if any, shall be effected in the form of issuance of whole Shares to the Grantee, within 90 days following the earlier to occur of (i) ____________, 20__
and (ii) the Grantee’s termination of Service. Such issuance or delivery shall be evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company. The Company shall pay all original issue or transfer taxes and all fees and expenses incident to such issuance or delivery, except as otherwise provided in Section 3(b). Prior to the issuance to the Grantee of Shares with respect to the vested Performance Units, the Grantee shall have no direct or secured claim in any specific assets of the Company or in such Shares, and will have the status of a general unsecured creditor of the Company.
|
(b)
|
Withholding Requirements.
|
(i)
|
Regardless of any action the Company takes with respect to any or all income tax, payroll tax or other tax-related withholding (“
Tax-Related Items
”), the Grantee acknowledges that the ultimate liability for all Tax-Related Items owed by the Grantee is and remains the Grantee’s responsibility and that the Company (A) makes no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the award made under this Agreement, including the grant or vesting of the Performance Units, or the subsequent sale of Shares; and (B) does not commit to structure the terms of the grant or any aspect of this award to reduce or eliminate the Grantee’s liability for Tax-Related Items.
|
(ii)
|
Prior to the settlement of any vested Performance Units, the Grantee shall pay or make adequate arrangements satisfactory to the Company to satisfy all withholding obligations of the Company. In this regard, the Grantee authorizes the Company to withhold all applicable Tax-Related Items legally payable by the Grantee from the Grantee’s wages or other cash compensation paid to the Grantee by the Company. Alternatively, or in addition, to the extent permissible under applicable law, the Grantee may elect to satisfy his or her tax obligations by one of the following methods: (A) a check or cash payment to the Company, (B) delivery to the Company (either actual delivery or by attestation procedures established by the Company) of previously owned whole Shares having an aggregate Fair Market Value, determined as of the date on which such withholding obligation arises (the “
Tax Date
”), equal to the Tax-Related Items, (C) authorizing the Company to withhold whole Shares which would otherwise be issued or transferred to the Grantee having an aggregate Fair Market Value, determined as of the Tax Date, equal to the Tax-Related Items or (D) any combination of (A), (B) and (C). Shares to be delivered to the Company or withheld may not have a Fair Market Value in excess of the minimum amount of the Tax-Related Items (or such greater withholding amount to the extent permitted by applicable accounting rules without resulting in variable accounting treatment). The Company may refuse to issue and deliver Shares in payment of any vested Performance Units if the Grantee fails to comply with the Grantee’s obligations in connection with the Tax-Related Items as described in this Section 3(b).
|
(iii)
|
Notwithstanding anything herein to the contrary and subject to Section 409A of the Code, Shares to be delivered under this Agreement shall be accelerated as required to pay employment taxes incurred by the Grantee related to the Shares subject to this Agreement prior to the settlement of the Shares under Section 3(a), in accordance with
|
|
|
(a)
|
Data Privacy and Other Acknowledgments.
By accepting the award provided for in this Agreement, the Grantee acknowledges and agrees that such award is subject to the provisions regarding data privacy and additional acknowledgments set forth in
Appendix B
. The Grantee shall review the provisions of
Appendix B
carefully, as this award shall be null and void absent the Grantee’s acceptance of such provisions. The Company reserves the right to impose other requirements on the award to the extent the Company determines it is necessary or advisable in order to comply with local law or facilitate the administration of the award and to require the Grantee to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing.
|
(b)
|
Grantee Representations.
The Grantee hereby represents to the Company that the Grantee has read and fully understands the provisions of the Agreement and the Plan and the Grantee’s decision to participate in the Plan is completely voluntary. Further, the Grantee acknowledges that the Grantee is relying solely on his or her own advisors with respect to the tax consequences of this award.
|
(c)
|
Regulatory Restrictions on the Performance Units.
Notwithstanding any provision of this Agreement or the Plan, the obligation of the Company to issue Shares in connection with the grant of Performance Units shall be subject to all applicable laws, rules and regulations and such approval by any regulatory body as may be required. The Company reserves the right to restrict, in whole or in part, the delivery of Shares pursuant to this Agreement prior to the satisfaction of all legal requirements relating to the issuance of such Shares, to their registration, qualification or listing or to an exemption from registration, qualification or listing.
|
(d)
|
No Right to Continued Service.
Nothing in this Agreement or the Plan shall confer upon the Grantee any right to continue in Service for any period of specific duration or interfere with or otherwise restrict in any way the rights of the Company (or any affiliated entity employing or retaining the Grantee) or of the Grantee, which rights are hereby expressly reserved by each, to terminate his or her Service at any time and for any reason, with or without cause.
|
(e)
|
No Right as a Shareholder.
|
(i)
|
The Performance Units constitute an unfunded and unsecured obligation of the Company. The Grantee shall not have any rights of a stockholder of the Company with respect to any Shares underlying the Performance Units unless and until Shares are issued in settlement of the Performance Units. Upon such issuance of Shares, the Grantee shall be the record owner of the Shares unless and until such Shares are sold or otherwise disposed of, and as record owner shall be entitled to all rights of a stockholder of the Company (including voting rights).
|
|
|
(ii)
|
If a cash dividend is paid with respect to the Shares underlying the Performance Units, then the Target Award or, for dividends paid prior to settlement of the vested Performance Units in accordance with Section 3(a), the vested Performance Units shall increase by (A) the product of the total number of Shares subject to the Target Award or vested Performance Units, as applicable, immediately prior to the dividend payment date multiplied by the dollar amount of the cash dividend immediately prior to such dividend payment date, divided by (B) the Fair Market Value of a Share as of the applicable dividend payment date, such amount rounded down to the nearest whole number. Any such additional Shares shall be subject to the same vesting conditions and payment terms as applicable to the underlying Performance Units as provided in this Agreement.
|
(f)
|
Beneficiary.
The Grantee may designate a beneficiary to receive settlement in connection with the Performance Units in the event of the Grantee’s death in accordance with the Company’s beneficiary designation procedures, as in effect from time to time. If the Grantee does not designate a beneficiary, or if the Grantee’s designated beneficiary does not survive the Grantee, then the Grantee’s beneficiary will be the Grantee’s estate.
|
(g)
|
Notification.
Any notification required by the terms of this Agreement shall be given in writing and shall be deemed effective (i) upon personal delivery; (ii) upon deposit with the United States Postal Service, by registered or certified mail, with postage and fees prepaid; or (iii) upon the Company’s sending of an email to the Grantee. A notice shall be addressed to the Company at its principal executive office and to the Grantee at the postal address that he or she most recently provided to the Company or at his or her Service email address, if any.
|
(h)
|
Entire Agreement.
This Agreement and the Plan constitute the entire contract between the parties hereto with regard to the subject matter hereof. They supersede any other agreements, representations or understandings (whether oral or written and whether express or implied) relating to the subject matter hereof. In the event of a conflict between any provision of the Plan and this Agreement, the Plan shall control.
|
(i)
|
Waiver.
No waiver of any breach or condition of this Agreement shall be deemed to be a waiver of any other or subsequent breach or condition, whether of like or different nature.
|
(j)
|
Nontransferability of Award
. The Performance Units may not be sold, transferred, assigned, pledged or otherwise encumbered or disposed of prior to the date such Performance Units are settled under Section 3 above, except as may be permitted by the Plan or as otherwise permitted by the Committee in its sole discretion or pursuant to rules adopted by the Committee in accordance with the Plan. Any attempt to dispose of the Performance Units or any interest in the Performance Units in a manner contrary to the restrictions set forth in this Agreement shall be void and of no effect.
|
(k)
|
Successors and Assigns.
The provisions of this Agreement shall inure to the benefit of, and be binding upon, the Company and its successors and assigns and upon the Grantee, the Grantee’s assigns and the legal representatives, heirs and legatees of the Grantee’s estate, whether or not any such person shall have become a party to this Agreement and have agreed in writing to be joined herein and be bound by the terms hereof.
|
|
|
(l)
|
Choice of Law.
This Agreement shall be governed by, and construed in accordance with, the laws of the State of Texas, as such laws are applied to contracts entered into and performed in such state, without regard to principles of conflict of law.
|
(m)
|
Award Subject to Clawback.
This award and any Shares acquired pursuant to this award are subject to forfeiture, recovery by the Company or other action pursuant to any clawback or recoupment policy which the Company may adopt from time to time, including without limitation any such policy which the Company may be required to adopt under the Dodd-Frank Wall Street Reform and Consumer Protection Act and implementing rules and regulations thereunder, or as otherwise required by law.
|
(n)
|
Compliance With Section 409A of the Code
. This Agreement and the Performance Units granted hereunder are intended to comply with Section 409A of the Code, and shall be interpreted and construed accordingly. To the extent this Agreement provides for the Performance Units to become vested and be settled upon the Grantee’s termination of employment, the applicable Shares shall be transferred to the Grantee or his or her beneficiary upon the Grantee’s “separation from service,” within the meaning of Section 409A of the Code; provided that if the Holder is a “specified employee,” within the meaning of Section 409A of the Code, then such Shares shall be transferred to the Grantee or his or her beneficiary upon the earlier to occur of (i) the six-month anniversary of such separation from service and (ii) the date of the Grantee’s death.
|
(a)
|
“
Cause
” shall mean, with respect to the Grantee,
|
(i)
|
any conviction or plea of
nolo contendere
to a felony;
|
(ii)
|
any willful misconduct by the Grantee in connection with the performance of the Grantee’s Service for the Company, including, without limitation, (A) misappropriation of funds of the Company, (B) harassment of or discrimination against individuals on account of gender, race, religion, national origin or disability or retaliation against an individual for making any claim that the Grantee has so harassed or discriminated against such individual or (C) breach of a written policy of the Company; or
|
(iii)
|
any disclosure of confidential or proprietary information of the Company or breach of any confidentiality, non-competition or non-solicitation covenant made by the Grantee for the benefit of the Company.
|
(b)
|
“
Disability
” shall mean that the Grantee is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment as determined by the Board of Directors in its sole discretion.
|
(c)
|
“
Good Reason
” shall be defined as that term is defined in the Grantee’s offer letter or other applicable employment agreement with the Company, if any; or, if there is no such definition, “Good Reason” shall mean the occurrence of any of the following events without the Grantee’s consent, provided that the Grantee has complied with the Good Reason Process: (i) a material diminution in the Grantee’s responsibility, authority or duty; (ii) a material diminution in the Grantee’s base salary except for across-the-board salary reductions based on the Company and its Subsidiaries’ financial performance similarly affecting all or substantially all management employees of the Company and its Subsidiaries; or (iii) the relocation of the
|
|
|
(d)
|
“
Good Reason Process
” shall mean that (i) the Grantee reasonably determines in good faith that a Good Reason condition has occurred; (ii) the Grantee notifies the Company in writing of the occurrence of the Good Reason condition within sixty (60) days of such occurrence; (iii) the Grantee cooperates in good faith with the Company’s efforts, for a period of not less than thirty (30) days following such notice (the “
Cure Period
”), to remedy the condition; (iv) notwithstanding such efforts, the Good Reason condition continues to exist following the Cure Period; and (v) the Grantee has a termination of Service within sixty (60) days after the end of the Cure Period. If the Company cures the Good Reason condition during the Cure Period, and the Grantee has a termination of Service due to such condition (notwithstanding its cure), then the Grantee will not be deemed to have had a termination of Service for Good Reason.
|
(e)
|
“
Pro-Rata Fraction
” shall mean a fraction with the numerator equal to the Grantee’s days of Service starting from the beginning of the Performance Period and ending on the date of termination of Service, and the denominator equal to the total number of calendar days in the Performance Period.
|
(f)
|
“
Service
” shall mean service as an employee of the Company or any of its Subsidiaries or Affiliates or as a member of the Board of Directors.
|
|
|
Grantee
:
|
[Name]
|
|
Shares Subject to Option
:
|
[#] Shares
|
|
Type of Option
:
|
Nonqualified Stock Option
|
|
Exercise Price
:
|
$[Closing Price on Grant Date] per Share
|
|
Grant Date
:
|
________, 20___
|
|
Vesting Commencement Date
:
|
________, 20___
|
|
Vesting
:
|
This option shall vest and become exercisable in accordance with the following schedule, subject to the Grantee’s continued Service with the Company as of the applicable vesting date:
|
|
|
Vesting Date
|
Percentage That Vests
|
[Vesting Schedule]
|
[Vesting Percentage]
|
|
|
The option shall become fully vested and exercisable upon termination of the Grantee’s Service by the Company without Cause or due to the Grantee’s death or Disability.
Upon a Change of Control, notwithsanding anything in Article XIII of the Company’s 2012 Omnibus Incentive Plan (the “
Plan
”) to the contrary, the following shall apply:
1.
If the option is not assumed, converted or replaced by the resulting entity in the Change of Control, then the option shall become fully vested and exercisable immediately prior to the consummation of a Change of Control, subject to the Grantee’s continued Service as of such date.
2.
If the option is assumed, converted or replaced by the resulting entity in the Change of Control, then (a) the option shall continue to vest and become exercsiable in acordance with the schedule above conditioned on the Grantee’s continued Service with the resulting entity in the Change of Control, and (b) in addition to the vesting provisions in case of termination of Service by the Company without Cause or due to the Grantee’s death or Disability as provided above, the Award shall become fully vested and exercsiable immediately upon the Grantee’s termination of Service for Good Reason within two years following the Change of Control.
|
|
Exercise Period
:
Expiration Date
:
|
The vested portion of this option may be exercised until the Expiration Date below.
Upon the earliest to occur of (a) [10th anniversary of Grant Date], (b) the first anniversary of the Grantee’s death or Disability, (c) the date of termination of Grantee’s Service by the Company for Cause, or (d) the 90th day after any other termination of the Grantee’s Service. In addition, in case of a Change of Control in which the option is not assumed, converted or replaced by the resulting entity in the Change of Control, the Committee may cause the option, to the extent not exercised, to expire upon consummation of the Change of Control.
|
SECTION 1.
|
GRANT OF OPTION.
|
SECTION 2.
|
TRANSFER OR ASSIGNMENT OF OPTION.
|
SECTION 3.
|
EXERCISE PROCEDURES.
|
SECTION 4.
|
PAYMENT FOR SHARES.
|
SECTION 5.
|
TERM AND EXPIRATION.
|
SECTION 6.
|
INCENTIVE STOCK OPTIONS.
|
SECTION 7.
|
MISCELLANEOUS PROVISIONS.
|
SECTION 8.
|
DEFINITIONS.
|
Type of Option:
|
Nonqualified Stock Option
|
Incentive Stock Option
|
Number of Shares to be Acquired:
|
[###]
|
[###]
|
Exercise Price (per Share):
|
$[###]
|
$[###]
|
Purchase Price (all Shares):
|
$[###]
|
$[###]
|
Estimated Withholding Tax:
|
$[###]
|
[not applicable]
|
Subtotal:
|
$[###]
|
$[###]
|
Amount Paid:
$[####]
|
Signature:
|
|
Name:
|
|
Address:
|
|
|
|
SSN:
|
|
(a)
|
the Option Award is granted voluntarily by the Company, is discretionary in nature and may be modified, suspended or terminated by the Company at any time;
|
(b)
|
the grant of the Option Award is voluntary and occasional and does not create any contractual or other right to receive future awards of Option Awards or benefits in lieu of the Option Award, even if such awards have been awarded in the past;
|
(c)
|
all decisions with respect to future awards, if any, will be at the sole discretion of the Company;
|
(d)
|
the grant of the Option Award shall not create a right to further employment with your employer and shall not interfere with the ability of your employer to terminate your employment relationship at any time, with or without Cause;
|
(e)
|
you are voluntarily accepting the grant of the Option Award;
|
(f)
|
the Option Award and any payment made pursuant to the Option Award are not part of normal or expected compensation or salary for any purposes, including, but not limited to, calculating any severance, resignation, termination, redundancy, dismissal, end-of-service payments, bonuses, long-service awards, pension or retirement benefits or welfare benefits or similar payments, and in no event should be considered as compensation for, or in any way relating to, past services for the Company or any of its Subsidiaries;
|
(g)
|
in accepting the grant of the Option Award, you expressly recognize that the Option Award is an award made solely by the Company, with principal offices at 251 O'Connor Ridge Blvd., #300, Irving, TX 75038, U.S.A., the Company is solely responsible for the administration of the Plan and the Agreement (collectively, the “
Plan Documents
”) and your participation in the Plan Documents; in the event that you are an employee of a Subsidiary, the Option Award and your participation in the Plan Documents will not be interpreted to form an employment contract or relationship with the Company; furthermore, the Option Award will not be interpreted to form an employment contract with any Subsidiary;
|
(h)
|
the future value of the Company shares which may be delivered upon exercise of the Option Award is unknown and cannot be predicted with certainty;
|
(i)
|
no claim or entitlement to compensation or damages shall arise from forfeiture of the Option Award resulting from termination of your employment by the Company or your employer (for any reason whatsoever and regardless of whether or not such termination is later found to be invalid or in breach of the employment laws in the jurisdiction where you are employed or the terms of your employment agreement, if any) or recoupment of all or any portion of any payment made pursuant to the Option Award as provided by any applicable Company policy on recoupment of incentive compensation and, in consideration of the grant of the Option Award to which you are not otherwise entitled, you irrevocably agree never to institute any claim against the Company or your employer, waive your ability, if any, to bring any such claim, and release the Company and your employer from any such claim; if, notwithstanding the foregoing, any such claim is allowed by a court of competent jurisdiction, then, by participating in the Plan Documents, you shall be deemed irrevocably to have agreed not to pursue such claim, and you agree to execute any and all documents necessary to request dismissal or withdrawal of such claim;
|
(j)
|
for purposes of the Option Award, your employment will be considered terminated as of the date you are no longer actively employed and providing services to the Company or one of its Subsidiaries, and your right, if any, to earn and be paid any portion of the Option Award (and any related dividend equivalents) pursuant to this Agreement after such termination of employment (for any reason whatsoever and regardless of whether or not such termination is later found to be invalid or in breach of the employment laws in the jurisdiction where you are employed or the terms of your employment agreement, if any) will be measured by the date you cease to be actively employed and will not be extended by any notice period mandated under local law (e.g., active employment would not include a period of “garden leave” or similar period mandated under the employment laws in the jurisdiction where you are employed or the terms of your employment agreement, if any); the Company, in its
|
(k)
|
you are solely responsible for investigating and complying with any exchange control laws applicable to you in connection with any payment made pursuant to Option Award;
|
(l)
|
unless otherwise provided in the Plan Documents or by the Company in its discretion, the Option Award and the benefits evidenced by this award agreement do not create any entitlement to have the Option Award or any such benefits transferred to, or assumed by, another company nor to be exchanged, cashed out or substituted for, in connection with any corporate transaction affecting the Company’s common stock;
|
(m)
|
neither your employer, the Company nor any of its Subsidiaries shall be liable for any foreign exchange rate fluctuation between your local currency and the United States Dollar that may affect the value of the Option Award or any payment made pursuant to the Option Award; and
|
(n)
|
the Company is not providing any tax, legal, or financial advice, nor is the Company making any recommendations regarding the Option Award. You are hereby advised to consult with your personal tax, legal and financial advisors regarding the Option Award before taking any action in relation thereto.
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Darling Ingredients Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstance under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date:
|
May 12, 2016
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Darling Ingredients Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstance under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date:
|
May 12, 2016
|
|
/s/ Randall C. Stuewe
|
|
/s/ John O. Muse
|
|
Randall C. Stuewe
|
|
John O. Muse
|
|
Chief Executive Officer
|
|
Chief Financial Officer
|
|
Date: May 12, 2016
|
|
Date: May 12, 2016
|