(Mark One)
|
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
|
SECURITIES EXCHANGE ACT OF 1934
|
For the quarterly period ended March 30, 2019
|
OR
|
|
/ / TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
|
SECURITIES EXCHANGE ACT OF 1934
|
For the transition period from _______ to _______
|
Delaware
|
|
36-2495346
|
(State or other jurisdiction
|
|
(I.R.S. Employer
|
of incorporation or organization)
|
|
Identification Number)
|
|
|
|
251 O'Connor Ridge Blvd., Suite 300
|
|
|
Irving, Texas
|
|
75038
|
(Address of principal executive offices)
|
|
(Zip Code)
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
Common stock $0.01 par value per share
|
DAR
|
New York Stock Exchange (“NYSE”)
|
|
|
Page No.
|
|
|
|
|
|
|
|
||
|
||
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 30,
2019 |
|
December 29,
2018 |
||||
ASSETS
|
(unaudited)
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
95,716
|
|
|
$
|
107,262
|
|
Restricted cash
|
107
|
|
|
107
|
|
||
Accounts receivable, net
|
371,339
|
|
|
385,737
|
|
||
Inventories
|
339,882
|
|
|
341,028
|
|
||
Prepaid expenses
|
39,070
|
|
|
35,247
|
|
||
Income taxes refundable
|
4,102
|
|
|
6,462
|
|
||
Other current assets
|
20,959
|
|
|
22,099
|
|
||
Total current assets
|
871,175
|
|
|
897,942
|
|
||
Property, plant and equipment, less accumulated depreciation of
$1,281,115 at March 30, 2019 and $1,246,095 at December 29, 2018
|
1,691,558
|
|
|
1,687,858
|
|
||
Intangible assets, less accumulated amortization of
$427,687 at March 30, 2019 and $423,575 at December 29, 2018
|
579,313
|
|
|
595,862
|
|
||
Goodwill
|
1,222,382
|
|
|
1,229,159
|
|
||
Investment in unconsolidated subsidiaries
|
433,381
|
|
|
410,177
|
|
||
Operating lease right-of-use assets
|
129,721
|
|
|
—
|
|
||
Other assets
|
53,487
|
|
|
53,375
|
|
||
Deferred income taxes
|
14,037
|
|
|
14,981
|
|
||
|
$
|
4,995,054
|
|
|
$
|
4,889,354
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
||
Current portion of long-term debt
|
$
|
23,693
|
|
|
$
|
7,492
|
|
Accounts payable, principally trade
|
192,511
|
|
|
219,479
|
|
||
Income taxes payable
|
8,861
|
|
|
4,043
|
|
||
Current operating lease liabilities
|
39,776
|
|
|
—
|
|
||
Accrued expenses
|
281,331
|
|
|
309,484
|
|
||
Total current liabilities
|
546,172
|
|
|
540,498
|
|
||
Long-term debt, net of current portion
|
1,663,763
|
|
|
1,666,940
|
|
||
Long-term operating lease liabilities
|
89,100
|
|
|
—
|
|
||
Other non-current liabilities
|
113,984
|
|
|
115,032
|
|
||
Deferred income taxes
|
225,336
|
|
|
231,063
|
|
||
Total liabilities
|
2,638,355
|
|
|
2,553,533
|
|
||
Commitments and contingencies
|
|
|
|
|
|
||
Stockholders’ equity:
|
|
|
|
|
|
||
Common stock, $0.01 par value; 250,000,000 shares authorized;
168,409,679 and 168,098,177 shares issued at March 30, 2019
and at December 29, 2018, respectively
|
1,684
|
|
|
1,681
|
|
||
Additional paid-in capital
|
1,548,446
|
|
|
1,536,157
|
|
||
Treasury stock, at cost; 3,660,873 and 3,437,579 shares at
March 30, 2019 and at December 29, 2018, respectively
|
(52,845
|
)
|
|
(47,756
|
)
|
||
Accumulated other comprehensive loss
|
(312,263
|
)
|
|
(304,539
|
)
|
||
Retained earnings
|
1,105,517
|
|
|
1,087,505
|
|
||
Total Darling's stockholders’ equity
|
2,290,539
|
|
|
2,273,048
|
|
||
Noncontrolling interests
|
66,160
|
|
|
62,773
|
|
||
Total stockholders' equity
|
$
|
2,356,699
|
|
|
$
|
2,335,821
|
|
|
$
|
4,995,054
|
|
|
$
|
4,889,354
|
|
|
Three Months Ended
|
||||||
|
March 30,
2019 |
|
March 31,
2018 |
||||
Net sales
|
$
|
835,104
|
|
|
$
|
875,374
|
|
Costs and expenses:
|
|
|
|
|
|
||
Cost of sales and operating expenses
|
646,663
|
|
|
678,099
|
|
||
Selling, general and administrative expenses
|
85,003
|
|
|
86,902
|
|
||
Depreciation and amortization
|
79,164
|
|
|
78,619
|
|
||
Total costs and expenses
|
810,830
|
|
|
843,620
|
|
||
Operating income
|
24,274
|
|
|
31,754
|
|
||
|
|
|
|
||||
Other expense:
|
|
|
|
|
|
||
Interest expense
|
(19,876
|
)
|
|
(23,124
|
)
|
||
Foreign currency loss
|
(732
|
)
|
|
(1,481
|
)
|
||
Other expense, net
|
(2,525
|
)
|
|
(2,516
|
)
|
||
Total other expense
|
(23,133
|
)
|
|
(27,121
|
)
|
||
|
|
|
|
||||
Equity in net income of unconsolidated subsidiaries
|
23,773
|
|
|
97,154
|
|
||
Income before income taxes
|
24,914
|
|
|
101,787
|
|
||
|
|
|
|
||||
Income tax expense
|
5,274
|
|
|
3,712
|
|
||
|
|
|
|
||||
Net income
|
19,640
|
|
|
98,075
|
|
||
|
|
|
|
||||
Net income attributable to noncontrolling interests
|
(1,628
|
)
|
|
(770
|
)
|
||
|
|
|
|
||||
Net income attributable to Darling
|
$
|
18,012
|
|
|
$
|
97,305
|
|
|
|
|
|
||||
Basic income per share
|
$
|
0.11
|
|
|
$
|
0.59
|
|
Diluted income per share
|
$
|
0.11
|
|
|
$
|
0.58
|
|
|
Three Months Ended
|
||||||
|
March 30, 2019
|
|
March 31, 2018
|
||||
Net income
|
$
|
19,640
|
|
|
$
|
98,075
|
|
Other comprehensive income/(loss), net of tax:
|
|
|
|
||||
Foreign currency translation
|
(4,886
|
)
|
|
17,295
|
|
||
Pension adjustments
|
858
|
|
|
667
|
|
||
Natural gas swap derivative adjustments
|
—
|
|
|
22
|
|
||
Corn option derivative adjustments
|
—
|
|
|
(1,605
|
)
|
||
Foreign exchange derivative adjustments
|
(1,937
|
)
|
|
—
|
|
||
Total other comprehensive income/(loss), net of tax
|
(5,965
|
)
|
|
16,379
|
|
||
Total comprehensive income
|
$
|
13,675
|
|
|
$
|
114,454
|
|
Comprehensive income attributable to noncontrolling interests
|
3,387
|
|
|
1,287
|
|
||
Comprehensive income attributable to Darling
|
$
|
10,288
|
|
|
$
|
113,167
|
|
|
Common Stock
|
|
|
|
|
|
|
|
||||||||||||||||||
|
Number of Outstanding Shares
|
$.01 par Value
|
Additional Paid-In Capital
|
Treasury Stock
|
Accumulated Other Comprehensive Loss
|
Retained Earnings
|
Stockholders' equity attributable to Darling
|
Non-controlling Interest
|
Total Stockholders' Equity
|
|||||||||||||||||
Balances at December 30, 2017
|
164,653,437
|
|
$
|
1,679
|
|
$
|
1,515,614
|
|
$
|
(44,063
|
)
|
$
|
(209,524
|
)
|
$
|
981,227
|
|
$
|
2,244,933
|
|
$
|
82,764
|
|
$
|
2,327,697
|
|
Adjustment to initially apply FASB ASC No. 2018-02 Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income
|
—
|
|
—
|
|
—
|
|
—
|
|
(4,782
|
)
|
4,782
|
|
—
|
|
—
|
|
—
|
|
||||||||
Net income
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
97,305
|
|
97,305
|
|
770
|
|
98,075
|
|
||||||||
Deductions to noncontrolling interests
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(10,173
|
)
|
(10,173
|
)
|
||||||||
Pension liability adjustments, net of tax
|
—
|
|
—
|
|
—
|
|
—
|
|
667
|
|
—
|
|
667
|
|
—
|
|
667
|
|
||||||||
Natural gas swap derivative adjustment, net of tax
|
—
|
|
—
|
|
—
|
|
—
|
|
22
|
|
—
|
|
22
|
|
—
|
|
22
|
|
||||||||
Corn option derivative adjustment, net of tax
|
—
|
|
—
|
|
—
|
|
—
|
|
(1,605
|
)
|
—
|
|
(1,605
|
)
|
—
|
|
(1,605
|
)
|
||||||||
Foreign currency translation adjustments
|
—
|
|
—
|
|
—
|
|
—
|
|
16,778
|
|
—
|
|
16,778
|
|
517
|
|
17,295
|
|
||||||||
Stock-based compensation
|
—
|
|
—
|
|
8,527
|
|
—
|
|
—
|
|
—
|
|
8,527
|
|
—
|
|
8,527
|
|
||||||||
Treasury stock
|
(159,758
|
)
|
—
|
|
—
|
|
(2,962
|
)
|
—
|
|
—
|
|
(2,962
|
)
|
—
|
|
(2,962
|
)
|
||||||||
Issuance of common stock
|
153,983
|
|
1
|
|
1,695
|
|
—
|
|
—
|
|
—
|
|
1,696
|
|
—
|
|
1,696
|
|
||||||||
Balances at March 31, 2018
|
164,647,662
|
|
$
|
1,680
|
|
$
|
1,525,836
|
|
$
|
(47,025
|
)
|
$
|
(198,444
|
)
|
$
|
1,083,314
|
|
$
|
2,365,361
|
|
$
|
73,878
|
|
$
|
2,439,239
|
|
|
Common Stock
|
|
|
|
|
|
|
|
||||||||||||||||||
|
Number of Outstanding Shares
|
$.01 par Value
|
Additional Paid-In Capital
|
Treasury Stock
|
Accumulated Other Comprehensive Loss
|
Retained Earnings
|
Stockholders' equity attributable to Darling
|
Non-controlling Interest
|
Total Stockholders' Equity
|
|||||||||||||||||
Balances at December 29, 2018
|
164,660,598
|
|
$
|
1,681
|
|
$
|
1,536,157
|
|
$
|
(47,756
|
)
|
$
|
(304,539
|
)
|
$
|
1,087,505
|
|
$
|
2,273,048
|
|
$
|
62,773
|
|
$
|
2,335,821
|
|
Net income
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
18,012
|
|
18,012
|
|
1,628
|
|
19,640
|
|
||||||||
Pension liability adjustments, net of tax
|
—
|
|
—
|
|
—
|
|
—
|
|
858
|
|
—
|
|
858
|
|
—
|
|
858
|
|
||||||||
Foreign exchange derivative adjustment, net of tax
|
—
|
|
—
|
|
—
|
|
—
|
|
(1,937
|
)
|
—
|
|
(1,937
|
)
|
—
|
|
(1,937
|
)
|
||||||||
Foreign currency translation adjustments
|
—
|
|
—
|
|
—
|
|
—
|
|
(6,645
|
)
|
—
|
|
(6,645
|
)
|
1,759
|
|
(4,886
|
)
|
||||||||
Stock-based compensation
|
—
|
|
—
|
|
10,403
|
|
—
|
|
—
|
|
—
|
|
10,403
|
|
—
|
|
10,403
|
|
||||||||
Treasury stock
|
(223,294
|
)
|
—
|
|
—
|
|
(5,089
|
)
|
—
|
|
—
|
|
(5,089
|
)
|
—
|
|
(5,089
|
)
|
||||||||
Issuance of common stock
|
311,502
|
|
3
|
|
1,886
|
|
—
|
|
—
|
|
—
|
|
1,889
|
|
—
|
|
1,889
|
|
||||||||
Balances at March 30, 2019
|
164,748,806
|
|
$
|
1,684
|
|
$
|
1,548,446
|
|
$
|
(52,845
|
)
|
$
|
(312,263
|
)
|
$
|
1,105,517
|
|
$
|
2,290,539
|
|
$
|
66,160
|
|
$
|
2,356,699
|
|
|
March 30,
2019 |
|
March 31,
2018 |
||||
Cash flows from operating activities:
|
|
|
|
||||
Net Income
|
$
|
19,640
|
|
|
$
|
98,075
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
79,164
|
|
|
78,619
|
|
||
Gain on disposal of property, plant, equipment and other assets
|
(4,250
|
)
|
|
(462
|
)
|
||
Gain on insurance proceeds from insurance settlements
|
(845
|
)
|
|
(503
|
)
|
||
Deferred taxes
|
(2,901
|
)
|
|
(2,649
|
)
|
||
Increase in long-term pension liability
|
646
|
|
|
159
|
|
||
Stock-based compensation expense
|
10,327
|
|
|
8,992
|
|
||
Write-off deferred loan costs
|
27
|
|
|
—
|
|
||
Deferred loan cost amortization
|
1,574
|
|
|
2,939
|
|
||
Equity in net income of unconsolidated subsidiaries
|
(23,773
|
)
|
|
(97,154
|
)
|
||
Changes in operating assets and liabilities, net of effects from acquisitions:
|
|
|
|
||||
Accounts receivable
|
11,692
|
|
|
(14,590
|
)
|
||
Income taxes refundable/payable
|
7,270
|
|
|
(1,384
|
)
|
||
Inventories and prepaid expenses
|
(5,063
|
)
|
|
(10,182
|
)
|
||
Accounts payable and accrued expenses
|
(43,016
|
)
|
|
(38,422
|
)
|
||
Other
|
(1,891
|
)
|
|
3,486
|
|
||
Net cash provided by operating activities
|
48,601
|
|
|
26,924
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Capital expenditures
|
(84,269
|
)
|
|
(56,587
|
)
|
||
Acquisitions, net of cash acquired
|
(1,431
|
)
|
|
—
|
|
||
Investment in unconsolidated subsidiary
|
—
|
|
|
(3,500
|
)
|
||
Proceeds from sale of investment in subsidiaries
|
—
|
|
|
2,805
|
|
||
Gross proceeds from disposal of property, plant and equipment and other assets
|
7,868
|
|
|
1,479
|
|
||
Proceeds from insurance settlement
|
845
|
|
|
503
|
|
||
Payments related to routes and other intangibles
|
(2,778
|
)
|
|
(15
|
)
|
||
Net cash used by investing activities
|
(79,765
|
)
|
|
(55,315
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Proceeds from long-term debt
|
2,138
|
|
|
3,876
|
|
||
Payments on long-term debt
|
(10,974
|
)
|
|
(9,622
|
)
|
||
Borrowings from revolving credit facility
|
156,829
|
|
|
135,184
|
|
||
Payments on revolving credit facility
|
(138,147
|
)
|
|
(80,019
|
)
|
||
Net cash overdraft financing
|
14,525
|
|
|
(331
|
)
|
||
Deferred loan costs
|
—
|
|
|
(1,094
|
)
|
||
Issuance of common stock
|
12
|
|
|
182
|
|
||
Minimum withholding taxes paid on stock awards
|
(3,190
|
)
|
|
(2,018
|
)
|
||
Net cash provided by financing activities
|
21,193
|
|
|
46,158
|
|
||
Effect of exchange rate changes on cash
|
(1,575
|
)
|
|
(1,672
|
)
|
||
Net increase/(decrease) in cash, cash equivalents and restricted cash
|
(11,546
|
)
|
|
16,095
|
|
||
Cash, cash equivalents and restricted cash at beginning of period
|
107,369
|
|
|
106,916
|
|
||
Cash, cash equivalents and restricted cash at end of period
|
$
|
95,823
|
|
|
$
|
123,011
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
||||
Accrued capital expenditures
|
$
|
(8,623
|
)
|
|
$
|
(1,934
|
)
|
Cash paid during the period for:
|
|
|
|
||||
Interest, net of capitalized interest
|
$
|
21,602
|
|
|
$
|
19,142
|
|
Income taxes, net of refunds
|
$
|
2,894
|
|
|
$
|
7,120
|
|
Non-cash operating activities
|
|
|
|
||||
Operating lease right of use asset obtained in exchange for new lease liabilities
|
$
|
4,794
|
|
|
$
|
—
|
|
Non-cash financing activities
|
|
|
|
||||
Debt issued for assets
|
$
|
—
|
|
|
$
|
17
|
|
(1)
|
General
|
(2)
|
Summary of Significant Accounting Policies
|
(a)
|
Basis of Presentation
|
(b)
|
Fiscal Periods
|
(c)
|
Cash, Cash Equivalents and Restricted Cash
|
|
|
March 30, 2019
|
December 29, 2018
|
||||
Cash and cash equivalents
|
|
$
|
95,716
|
|
$
|
107,262
|
|
Restricted cash
|
|
107
|
|
107
|
|
||
Total cash, cash equivalents and restricted cash shown in the consolidated statements of cash flow
|
|
$
|
95,823
|
|
$
|
107,369
|
|
(d)
|
Accounts Receivable and Allowance for Doubtful Accounts
|
(e)
|
Revenue Recognition
|
(f)
|
Foreign Currency Translation and Remeasurement
|
(g)
|
Leases
|
(h)
|
Earnings Per Share
|
|
Net Income per Common Share (in thousands, except per share data)
|
||||||||||||||||||||
|
Three Months Ended
|
||||||||||||||||||||
|
|
|
March 30, 2019
|
|
|
|
|
|
March 31, 2018
|
|
|
||||||||||
|
Income
|
|
Shares
|
|
Per Share
|
|
Income
|
|
Shares
|
|
Per Share
|
||||||||||
Basic:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net Income attributable to Darling
|
$
|
18,012
|
|
|
164,855
|
|
|
$
|
0.11
|
|
|
$
|
97,305
|
|
|
164,772
|
|
|
$
|
0.59
|
|
Diluted:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Effect of dilutive securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Add: Option shares in the money and dilutive effect of non-vested stock awards
|
|
|
|
6,127
|
|
|
|
|
|
|
|
|
5,071
|
|
|
|
|
||||
Less: Pro forma treasury shares
|
|
|
|
(2,322
|
)
|
|
|
|
|
|
|
|
(2,101
|
)
|
|
|
|
||||
Diluted:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income attributable to Darling
|
$
|
18,012
|
|
|
168,660
|
|
|
$
|
0.11
|
|
|
$
|
97,305
|
|
|
167,742
|
|
|
$
|
0.58
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3)
|
Investment in Unconsolidated Subsidiaries
|
(in thousands)
|
|
March 31, 2019
|
December 31, 2018
|
||||
Assets:
|
|
|
|
||||
Total current assets
|
|
$
|
225,948
|
|
$
|
186,258
|
|
Property, plant and equipment, net
|
|
591,927
|
|
576,384
|
|
||
Other assets
|
|
26,427
|
|
24,601
|
|
||
Total assets
|
|
$
|
844,302
|
|
$
|
787,243
|
|
Liabilities and members' equity:
|
|
|
|
||||
Total current portion of long term debt
|
|
$
|
276
|
|
$
|
189
|
|
Total other current liabilities
|
|
44,440
|
|
40,619
|
|
||
Total long term debt
|
|
9,010
|
|
8,485
|
|
||
Total other long term liabilities
|
|
4,612
|
|
539
|
|
||
Total members' equity
|
|
785,964
|
|
737,411
|
|
||
Total liabilities and members' equity
|
|
$
|
844,302
|
|
$
|
787,243
|
|
|
|
Three Months Ended
|
|||||
(in thousands)
|
|
March 31, 2019
|
March 31, 2018
|
||||
Revenues:
|
|
|
|
||||
Operating revenues
|
|
$
|
302,718
|
|
$
|
150,321
|
|
Expenses:
|
|
|
|
||||
Total costs and expenses less depreciation, amortization and accretion expense
|
|
243,063
|
|
(49,821
|
)
|
||
Depreciation, amortization and accretion expense
|
|
11,418
|
|
6,120
|
|
||
Total costs and expenses
|
|
254,481
|
|
(43,701
|
)
|
||
Operating income
|
|
48,237
|
|
194,022
|
|
||
Other income
|
|
641
|
|
377
|
|
||
Interest and debt expense, net
|
|
(324
|
)
|
—
|
|
||
Net income
|
|
$
|
48,554
|
|
$
|
194,399
|
|
(4)
|
Acquisitions and Dispositions
|
(5)
|
Inventories
|
|
March 30, 2019
|
|
December 29, 2018
|
||||
Finished product
|
$
|
176,451
|
|
|
$
|
176,184
|
|
Work in process
|
81,242
|
|
|
78,501
|
|
||
Raw material
|
27,723
|
|
|
32,502
|
|
||
Supplies and other
|
54,466
|
|
|
53,841
|
|
||
|
$
|
339,882
|
|
|
$
|
341,028
|
|
(6)
|
Intangible Assets
|
|
March 30, 2019
|
|
December 29, 2018
|
||||
Indefinite Lived Intangible Assets
|
|
|
|
||||
Trade names
|
$
|
52,926
|
|
|
$
|
53,472
|
|
|
52,926
|
|
|
53,472
|
|
||
Finite Lived Intangible Assets:
|
|
|
|
|
|
||
Routes
|
380,442
|
|
|
386,724
|
|
||
Permits
|
485,119
|
|
|
486,359
|
|
||
Non-compete agreements
|
3,778
|
|
|
3,784
|
|
||
Trade names
|
65,670
|
|
|
72,570
|
|
||
Royalty, consulting, land use rights and leasehold
|
19,065
|
|
|
16,528
|
|
||
|
954,074
|
|
|
965,965
|
|
||
Accumulated Amortization:
|
|
|
|
||||
Routes
|
(146,415
|
)
|
|
(145,702
|
)
|
||
Permits
|
(246,460
|
)
|
|
(238,123
|
)
|
||
Non-compete agreements
|
(2,635
|
)
|
|
(2,501
|
)
|
||
Trade names
|
(27,979
|
)
|
|
(33,242
|
)
|
||
Royalty, consulting, land use rights and leasehold
|
(4,198
|
)
|
|
(4,007
|
)
|
||
|
(427,687
|
)
|
|
(423,575
|
)
|
||
Total Intangible assets, less accumulated amortization
|
$
|
579,313
|
|
|
$
|
595,862
|
|
(7)
|
Goodwill
|
|
Feed Ingredients
|
Food Ingredients
|
Fuel Ingredients
|
Total
|
||||||||
Balance at December 29, 2018
|
|
|
|
|
||||||||
Goodwill
|
$
|
791,966
|
|
$
|
335,701
|
|
$
|
117,867
|
|
$
|
1,245,534
|
|
Accumulated impairment losses
|
(15,914
|
)
|
(461
|
)
|
—
|
|
(16,375
|
)
|
||||
|
776,052
|
|
335,240
|
|
117,867
|
|
1,229,159
|
|
||||
Goodwill acquired during year
|
396
|
|
91
|
|
—
|
|
487
|
|
||||
Foreign currency translation
|
(1,306
|
)
|
(4,548
|
)
|
(1,410
|
)
|
(7,264
|
)
|
||||
Balance at March 30, 2019
|
|
|
|
|
|
|
|
|||||
Goodwill
|
791,056
|
|
331,244
|
|
116,457
|
|
1,238,757
|
|
||||
Accumulated impairment losses
|
(15,914
|
)
|
(461
|
)
|
—
|
|
(16,375
|
)
|
||||
|
$
|
775,142
|
|
$
|
330,783
|
|
$
|
116,457
|
|
$
|
1,222,382
|
|
(8)
|
Accrued Expenses
|
|
March 30, 2019
|
|
December 29, 2018
|
||||
Compensation and benefits
|
$
|
75,568
|
|
|
$
|
91,851
|
|
Accrued income, ad valorem, and franchise taxes
|
24,463
|
|
|
31,366
|
|
||
Accrued operating expenses
|
59,763
|
|
|
62,247
|
|
||
Customer deposits
|
31,563
|
|
|
30,741
|
|
||
Other accrued expense
|
89,974
|
|
|
93,279
|
|
||
|
$
|
281,331
|
|
|
$
|
309,484
|
|
(9)
|
Leases
|
|
Three months Ended
|
||
|
March 30, 2019
|
||
Operating lease expense
|
$
|
12,317
|
|
Short-term lease costs
|
3,053
|
|
|
Total lease cost
|
$
|
15,370
|
|
Cash paid for amounts included in the measurement lease liabilities
|
|
||
Operating cash flows from operating leases
|
$
|
12,029
|
|
|
|
||
|
As of March 30, 2019
|
||
Operating right-of-use assets, net
|
$
|
129,721
|
|
|
|
||
Operating lease liability, current
|
$
|
39,776
|
|
Operating lease liability, non-current
|
89,100
|
|
|
Total operating lease liabilities
|
$
|
128,876
|
|
|
|
||
Weighted average remaining lease term - operating leases
|
6.3 years
|
|
|
Weighted average discount rate - operating leases
|
5.26
|
%
|
Period Ending Fiscal
|
Operating Leases
|
Capital Leases
|
||||
2019 (excluding the three months ended March 30, 2019)
|
$
|
34,356
|
|
$
|
217
|
|
2020
|
35,776
|
|
153
|
|
||
2021
|
23,580
|
|
6
|
|
||
2022
|
14,338
|
|
6
|
|
||
2023
|
9,734
|
|
—
|
|
||
Thereafter
|
36,564
|
|
—
|
|
||
|
$
|
154,348
|
|
$
|
382
|
|
Less amounts representing interest
|
$
|
(25,472
|
)
|
(16
|
)
|
|
Lease obligations included in current and long-term liabilities
|
$
|
128,876
|
|
$
|
366
|
|
Period Ending Fiscal
|
Operating Leases
|
Capital Leases
|
||||
2019
|
$
|
46,316
|
|
$
|
271
|
|
2020
|
34,403
|
|
152
|
|
||
2021
|
22,252
|
|
6
|
|
||
2022
|
13,091
|
|
6
|
|
||
2023
|
8,478
|
|
—
|
|
||
Thereafter
|
28,219
|
|
—
|
|
||
|
$
|
152,759
|
|
$
|
435
|
|
Less amounts representing interest
|
|
(20
|
)
|
|||
Capital lease obligation included in current and long-term debt
|
|
$
|
415
|
|
(10)
|
Debt
|
|
March 30,
2019 |
|
December 29,
2018 |
||||
Amended Credit Agreement:
|
|
|
|
||||
Revolving Credit Facility ($37.1 million and $32.1 million denominated in euro at March 30, 2019 and December 29, 2018, respectively)
|
$
|
50,061
|
|
|
$
|
32,105
|
|
Term Loan A ($22.8 million and $29.8 million denominated in CAD at March 30, 2019 and December 29, 2018, respectively)
|
61,030
|
|
|
68,080
|
|
||
Less unamortized deferred loan costs
|
(316
|
)
|
|
(381
|
)
|
||
Carrying value Term Loan A
|
60,714
|
|
|
67,699
|
|
||
|
|
|
|
||||
Term Loan B
|
495,000
|
|
|
495,000
|
|
||
Less unamortized deferred loan costs
|
(8,741
|
)
|
|
(9,024
|
)
|
||
Carrying value Term Loan B
|
486,259
|
|
|
485,976
|
|
||
|
|
|
|
||||
5.375% Senior Notes due 2022 with effective interest of 5.72%
|
500,000
|
|
|
500,000
|
|
||
Less unamortized deferred loan costs
|
(4,503
|
)
|
|
(4,876
|
)
|
||
Carrying value 5.375% Senior Notes due 2022
|
495,497
|
|
|
495,124
|
|
||
|
|
|
|
||||
3.625% Senior Notes due 2026 - Denominated in euro with effective interest of 3.83%
|
578,371
|
|
|
590,499
|
|
||
Less unamortized deferred loan costs - Denominated in euro
|
(7,753
|
)
|
|
(8,160
|
)
|
||
Carrying value 3.625% Senior Notes due 2026
|
570,618
|
|
|
582,339
|
|
||
|
|
|
|
||||
Other Notes and Obligations
|
24,307
|
|
|
11,189
|
|
||
|
1,687,456
|
|
|
1,674,432
|
|
||
Less Current Maturities
|
23,693
|
|
|
7,492
|
|
||
|
$
|
1,663,763
|
|
|
$
|
1,666,940
|
|
(11)
|
Income Taxes
|
(12)
|
Other Comprehensive Income/(Loss)
|
|
Three Months Ended
|
|||||||||||||||||
|
Before-Tax
|
Tax (Expense)
|
Net-of-Tax
|
|||||||||||||||
|
Amount
|
or Benefit
|
Amount
|
|||||||||||||||
|
March 30, 2019
|
March 31, 2018
|
March 30, 2019
|
March 31, 2018
|
March 30, 2019
|
March 31, 2018
|
||||||||||||
Defined benefit pension plans
|
|
|
|
|
|
|
||||||||||||
Amortization of prior service cost/(benefit)
|
$
|
9
|
|
$
|
9
|
|
$
|
(3
|
)
|
$
|
(3
|
)
|
$
|
6
|
|
$
|
6
|
|
Amortization of actuarial loss
|
1,146
|
|
888
|
|
(294
|
)
|
(227
|
)
|
852
|
|
661
|
|
||||||
Total defined benefit pension plans
|
1,155
|
|
897
|
|
(297
|
)
|
(230
|
)
|
858
|
|
667
|
|
||||||
Natural gas swap derivatives
|
|
|
|
|
|
|
||||||||||||
Loss/(gain) reclassified to net income
|
—
|
|
14
|
|
—
|
|
(4
|
)
|
—
|
|
10
|
|
||||||
Gain/(loss) activity recognized in other comprehensive income/(loss)
|
—
|
|
16
|
|
—
|
|
(4
|
)
|
—
|
|
12
|
|
||||||
Total natural gas swap derivatives
|
—
|
|
30
|
|
—
|
|
(8
|
)
|
—
|
|
22
|
|
||||||
Corn option derivatives
|
|
|
|
|
|
|
||||||||||||
Loss/(gain) reclassified to net income
|
—
|
|
(668
|
)
|
—
|
|
173
|
|
—
|
|
(495
|
)
|
||||||
Gain/(loss) activity recognized in other comprehensive income/(loss)
|
—
|
|
(1,497
|
)
|
—
|
|
387
|
|
—
|
|
(1,110
|
)
|
||||||
Total corn option derivatives
|
—
|
|
(2,165
|
)
|
—
|
|
560
|
|
—
|
|
(1,605
|
)
|
||||||
Foreign exchange derivatives
|
|
|
|
|
|
|
||||||||||||
Gain/(loss) activity recognized in other comprehensive income/(loss)
|
(2,934
|
)
|
—
|
|
997
|
|
—
|
|
(1,937
|
)
|
—
|
|
||||||
Total foreign exchange derivatives
|
(2,934
|
)
|
—
|
|
997
|
|
—
|
|
(1,937
|
)
|
—
|
|
||||||
|
|
|
|
|
|
|
||||||||||||
Foreign currency translation
|
(5,393
|
)
|
17,295
|
|
507
|
|
—
|
|
(4,886
|
)
|
17,295
|
|
||||||
|
|
|
|
|
|
|
||||||||||||
Other comprehensive income/(loss)
|
$
|
(7,172
|
)
|
$
|
16,057
|
|
$
|
1,207
|
|
$
|
322
|
|
$
|
(5,965
|
)
|
$
|
16,379
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|||||
|
March 30, 2019
|
March 31, 2018
|
Statement of Operations Classification
|
||||
Derivative instruments
|
|
|
|
||||
Natural gas swap derivatives
|
$
|
—
|
|
$
|
(14
|
)
|
Cost of sales and operating expenses
|
Corn option derivatives
|
—
|
|
668
|
|
Cost of sales and operating expenses
|
||
|
—
|
|
654
|
|
Total before tax
|
||
|
—
|
|
(169
|
)
|
Income taxes
|
||
|
—
|
|
485
|
|
Net of tax
|
||
Defined benefit pension plans
|
|
|
|
||||
Amortization of prior service cost
|
$
|
(9
|
)
|
$
|
(9
|
)
|
(a)
|
Amortization of actuarial loss
|
(1,146
|
)
|
(888
|
)
|
(a)
|
||
|
(1,155
|
)
|
(897
|
)
|
Total before tax
|
||
|
297
|
|
230
|
|
Income taxes
|
||
|
(858
|
)
|
(667
|
)
|
Net of tax
|
||
Total reclassifications
|
$
|
(858
|
)
|
$
|
(182
|
)
|
Net of tax
|
(a)
|
These items are included in the computation of net periodic pension cost. See Note 14 Employee Benefit Plans for additional information.
|
|
|
Three Months Ended March 30, 2019
|
|||||||||||
|
|
Foreign Currency
|
Derivative
|
Defined Benefit
|
|
||||||||
|
|
Translation
|
Instruments
|
Pension Plans
|
Total
|
||||||||
Accumulated Other Comprehensive Income/(loss) December 29, 2018, attributable to Darling, net of tax
|
|
$
|
(270,081
|
)
|
$
|
1,081
|
|
$
|
(35,539
|
)
|
$
|
(304,539
|
)
|
Other comprehensive gain/(loss) before reclassifications
|
|
(4,886
|
)
|
(1,937
|
)
|
—
|
|
(6,823
|
)
|
||||
Amounts reclassified from accumulated other comprehensive income/(loss)
|
|
—
|
|
—
|
|
858
|
|
858
|
|
||||
Net current-period other comprehensive income/(loss)
|
|
(4,886
|
)
|
(1,937
|
)
|
858
|
|
(5,965
|
)
|
||||
Noncontrolling interest
|
|
1,759
|
|
—
|
|
—
|
|
1,759
|
|
||||
Accumulated Other Comprehensive Income/(loss) March 30, 2019, attributable to Darling, net of tax
|
|
(276,726
|
)
|
$
|
(856
|
)
|
$
|
(34,681
|
)
|
$
|
(312,263
|
)
|
|
Pension Benefits
|
|||||
|
Three Months Ended
|
|||||
|
March 30,
2019 |
March 31,
2018 |
||||
Service cost
|
$
|
678
|
|
$
|
799
|
|
Interest cost
|
1,710
|
|
1,625
|
|
||
Expected return on plan assets
|
(1,819
|
)
|
(2,064
|
)
|
||
Amortization of prior service cost
|
9
|
|
9
|
|
||
Amortization of net loss
|
1,146
|
|
888
|
|
||
Net pension cost
|
$
|
1,724
|
|
$
|
1,257
|
|
(15)
|
Derivatives
|
Functional Currency
|
|
Contract Currency
|
||||
Type
|
Amount
|
|
Type
|
Amount
|
||
Brazilian real
|
49,321
|
|
|
Euro
|
10,988
|
|
Brazilian real
|
1,171,313
|
|
|
U.S. dollar
|
330,455
|
|
Euro
|
44,675
|
|
|
U.S. dollar
|
51,207
|
|
Euro
|
22,121
|
|
|
Polish zloty
|
95,280
|
|
Euro
|
6,098
|
|
|
Japanese yen
|
768,000
|
|
Euro
|
38,245
|
|
|
Chinese renminbi
|
294,273
|
|
Euro
|
13,632
|
|
|
Australian dollar
|
21,850
|
|
Euro
|
4,573
|
|
|
British pound
|
3,961
|
|
Polish zloty
|
22,168
|
|
|
Euro
|
5,156
|
|
British pound
|
276
|
|
|
Euro
|
322
|
|
Japanese yen
|
296,912
|
|
|
U.S. dollar
|
2,710
|
|
U.S. dollar
|
821
|
|
|
Japanese yen
|
90,000
|
|
|
|
|
|
Loss or (Gain) Recognized in Income on Derivatives Not Designated as Hedges
|
|||||
|
|
|
|
Three Months Ended
|
|||||
Derivatives not designated as hedging instruments
|
|
Location
|
|
March 30, 2019
|
March 31, 2018
|
||||
|
|
|
|
|
|
||||
Foreign exchange
|
|
Foreign currency loss
|
|
$
|
1,871
|
|
$
|
1,654
|
|
Foreign exchange
|
|
Net sales
|
|
296
|
|
—
|
|
||
Foreign exchange
|
|
Cost of sales and operating expenses
|
|
(245
|
)
|
—
|
|
||
Foreign exchange
|
|
Selling, general and administrative expense
|
|
873
|
|
489
|
|
||
Corn options and futures
|
|
Net sales
|
|
350
|
|
(309
|
)
|
||
Corn options and futures
|
|
Cost of sales and operating expenses
|
|
(873
|
)
|
512
|
|
||
Heating Oil swaps and options
|
|
Cost of sales and operating expenses
|
|
(506
|
)
|
—
|
|
||
Total
|
|
|
|
$
|
1,766
|
|
$
|
2,346
|
|
|
|
Fair Value Measurements at March 30, 2019 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
|
$
|
5,922
|
|
$
|
—
|
|
$
|
5,922
|
|
$
|
—
|
|
Total Assets
|
$
|
5,922
|
|
$
|
—
|
|
$
|
5,922
|
|
$
|
—
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
||||||||
Derivative instruments
|
$
|
2,987
|
|
$
|
—
|
|
$
|
2,987
|
|
$
|
—
|
|
5.375% Senior notes
|
507,500
|
|
—
|
|
507,500
|
|
—
|
|
||||
3.625% Senior notes
|
599,886
|
|
—
|
|
599,886
|
|
—
|
|
||||
Term loan A
|
60,725
|
|
—
|
|
60,725
|
|
—
|
|
||||
Term loan B
|
494,381
|
|
—
|
|
494,381
|
|
—
|
|
||||
Revolver debt
|
49,310
|
|
—
|
|
49,310
|
|
—
|
|
||||
Total Liabilities
|
$
|
1,714,789
|
|
$
|
—
|
|
$
|
1,714,789
|
|
$
|
—
|
|
|
|
Fair Value Measurements at December 29, 2018 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
|
$
|
4,307
|
|
$
|
—
|
|
$
|
4,307
|
|
$
|
—
|
|
Total Assets
|
$
|
4,307
|
|
$
|
—
|
|
$
|
4,307
|
|
$
|
—
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
||||||||
Derivative instruments
|
$
|
3,235
|
|
$
|
—
|
|
$
|
3,235
|
|
$
|
—
|
|
5.375% Senior notes
|
495,000
|
|
—
|
|
495,000
|
|
—
|
|
||||
3.625% Senior notes
|
585,303
|
|
—
|
|
585,303
|
|
—
|
|
||||
Term loan A
|
67,739
|
|
—
|
|
67,739
|
|
—
|
|
||||
Term loan B
|
492,525
|
|
—
|
|
492,525
|
|
—
|
|
||||
Revolver debt
|
31,623
|
|
—
|
|
31,623
|
|
—
|
|
||||
Total Liabilities
|
$
|
1,675,425
|
|
$
|
—
|
|
$
|
1,675,425
|
|
$
|
—
|
|
(17)
|
Contingencies
|
(18)
|
Business Segments
|
|
Feed Ingredients
|
Food Ingredients
|
Fuel Ingredients
|
Corporate
|
Total
|
||||||||||
Three Months Ended March 30, 2019
|
|
|
|
|
|
||||||||||
Net Sales
|
$
|
495,819
|
|
$
|
279,164
|
|
$
|
60,121
|
|
$
|
—
|
|
$
|
835,104
|
|
Cost of sales and operating expenses
|
382,468
|
|
214,118
|
|
50,077
|
|
—
|
|
646,663
|
|
|||||
Gross Margin
|
113,351
|
|
65,046
|
|
10,044
|
|
—
|
|
188,441
|
|
|||||
|
|
|
|
|
|
||||||||||
Selling, general and administrative expenses
|
48,831
|
|
21,887
|
|
(754
|
)
|
15,039
|
|
85,003
|
|
|||||
Depreciation and amortization
|
49,369
|
|
19,511
|
|
7,798
|
|
2,486
|
|
79,164
|
|
|||||
Segment operating income/(loss)
|
15,151
|
|
23,648
|
|
3,000
|
|
(17,525
|
)
|
24,274
|
|
|||||
|
|
|
|
|
|
||||||||||
Equity in net income/(loss) of unconsolidated subsidiaries
|
(504
|
)
|
—
|
|
24,277
|
|
—
|
|
23,773
|
|
|||||
Segment income/(loss)
|
14,647
|
|
23,648
|
|
27,277
|
|
(17,525
|
)
|
48,047
|
|
|||||
|
|
|
|
|
|
||||||||||
Total other expense
|
|
|
|
|
(23,133
|
)
|
|||||||||
Loss before income taxes
|
|
|
|
|
$
|
24,914
|
|
||||||||
|
|
|
|
|
|
||||||||||
Segment assets at March 30, 2019
|
$
|
2,583,753
|
|
$
|
1,394,049
|
|
$
|
794,467
|
|
$
|
222,785
|
|
$
|
4,995,054
|
|
|
Feed Ingredients
|
Food Ingredients
|
Fuel Ingredients
|
Corporate
|
Total
|
||||||||||
Three Months Ended March 31, 2018
|
|
|
|
|
|
||||||||||
Net Sales
|
$
|
485,798
|
|
$
|
305,520
|
|
$
|
84,056
|
|
$
|
—
|
|
$
|
875,374
|
|
Cost of sales and operating expenses
|
369,088
|
|
249,185
|
|
59,826
|
|
—
|
|
678,099
|
|
|||||
Gross Margin
|
116,710
|
|
56,335
|
|
24,230
|
|
—
|
|
197,275
|
|
|||||
|
|
|
|
|
|
||||||||||
Selling, general and administrative expenses
|
48,265
|
|
23,861
|
|
(1,398
|
)
|
16,174
|
|
86,902
|
|
|||||
Depreciation and amortization
|
46,789
|
|
20,640
|
|
8,471
|
|
2,719
|
|
78,619
|
|
|||||
Segment operating income/(loss)
|
21,656
|
|
11,834
|
|
17,157
|
|
(18,893
|
)
|
31,754
|
|
|||||
|
|
|
|
|
|
||||||||||
Equity in net income/(loss) of unconsolidated subsidiaries
|
(45
|
)
|
—
|
|
97,199
|
|
—
|
|
97,154
|
|
|||||
Segment income/(loss)
|
21,611
|
|
11,834
|
|
114,356
|
|
(18,893
|
)
|
128,908
|
|
|||||
|
|
|
|
|
|
||||||||||
Total other expense
|
|
|
|
|
(27,121
|
)
|
|||||||||
Income before income taxes
|
|
|
|
|
$
|
101,787
|
|
||||||||
|
|
|
|
|
|
||||||||||
Segment assets at December 29, 2018
|
$
|
2,566,106
|
|
$
|
1,401,291
|
|
$
|
761,817
|
|
$
|
160,140
|
|
$
|
4,889,354
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(19)
|
Revenue
|
|
Three Months Ended March 30, 2019
|
|||||||||||
|
Feed Ingredients
|
Food Ingredients
|
Fuel Ingredients
|
Total
|
||||||||
Geographic Area
|
|
|
|
|
||||||||
North America
|
$
|
410,237
|
|
$
|
48,813
|
|
$
|
5,710
|
|
$
|
464,760
|
|
Europe
|
79,998
|
|
151,652
|
|
54,411
|
|
286,061
|
|
||||
China
|
2,952
|
|
46,937
|
|
—
|
|
49,889
|
|
||||
South America
|
—
|
|
12,669
|
|
—
|
|
12,669
|
|
||||
Other
|
2,632
|
|
19,093
|
|
—
|
|
21,725
|
|
||||
Net sales
|
$
|
495,819
|
|
$
|
279,164
|
|
$
|
60,121
|
|
$
|
835,104
|
|
|
|
|
|
|
||||||||
Major product types
|
|
|
|
|
||||||||
Fats
|
$
|
144,876
|
|
$
|
35,138
|
|
$
|
—
|
|
$
|
180,014
|
|
Used cooking oil
|
45,406
|
|
—
|
|
—
|
|
45,406
|
|
||||
Proteins
|
205,813
|
|
—
|
|
—
|
|
205,813
|
|
||||
Bakery
|
45,656
|
|
—
|
|
—
|
|
45,656
|
|
||||
Other rendering
|
41,254
|
|
—
|
|
—
|
|
41,254
|
|
||||
Food ingredients
|
—
|
|
221,908
|
|
—
|
|
221,908
|
|
||||
Bioenergy
|
—
|
|
—
|
|
54,411
|
|
54,411
|
|
||||
Biofuels
|
—
|
|
—
|
|
5,710
|
|
5,710
|
|
||||
Other
|
12,814
|
|
22,118
|
|
—
|
|
34,932
|
|
||||
Net sales
|
$
|
495,819
|
|
$
|
279,164
|
|
$
|
60,121
|
|
$
|
835,104
|
|
|
|
|
|
|
|
Three Months Ended March 31, 2018
|
|||||||||||
|
Feed Ingredients
|
Food Ingredients
|
Fuel Ingredients
|
Total
|
||||||||
Geographic Area Revenues
|
|
|
|
|
||||||||
North America
|
$
|
390,376
|
|
$
|
44,277
|
|
$
|
21,540
|
|
$
|
456,193
|
|
Europe
|
87,790
|
|
183,639
|
|
62,516
|
|
333,945
|
|
||||
China
|
5,678
|
|
43,912
|
|
—
|
|
49,590
|
|
||||
South America
|
—
|
|
14,344
|
|
—
|
|
14,344
|
|
||||
Other
|
1,954
|
|
19,348
|
|
—
|
|
21,302
|
|
||||
Net sales
|
$
|
485,798
|
|
$
|
305,520
|
|
$
|
84,056
|
|
$
|
875,374
|
|
|
|
|
|
|
||||||||
Major product types
|
|
|
|
|
||||||||
Fats
|
$
|
143,552
|
|
$
|
44,819
|
|
$
|
—
|
|
$
|
188,371
|
|
Used cooking oil
|
36,608
|
|
—
|
|
—
|
|
36,608
|
|
||||
Proteins
|
203,395
|
|
—
|
|
—
|
|
203,395
|
|
||||
Bakery
|
46,751
|
|
—
|
|
—
|
|
46,751
|
|
||||
Other rendering
|
31,362
|
|
—
|
|
—
|
|
31,362
|
|
||||
Food ingredients
|
—
|
|
233,923
|
|
—
|
|
233,923
|
|
||||
Bioenergy
|
—
|
|
—
|
|
62,516
|
|
62,516
|
|
||||
Biofuels
|
—
|
|
—
|
|
21,540
|
|
21,540
|
|
||||
Other
|
24,130
|
|
26,778
|
|
—
|
|
50,908
|
|
||||
Net sales
|
$
|
485,798
|
|
$
|
305,520
|
|
$
|
84,056
|
|
$
|
875,374
|
|
|
|
|
|
|
(20)
|
Related Party Transactions
|
|
Parent
|
Guarantors
|
Non-guarantors
|
Eliminations
|
Consolidated
|
||||||||||
ASSETS
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
987
|
|
$
|
33
|
|
$
|
94,696
|
|
$
|
—
|
|
$
|
95,716
|
|
Restricted cash
|
103
|
|
—
|
|
4
|
|
—
|
|
107
|
|
|||||
Accounts receivable
|
43,885
|
|
640,838
|
|
468,164
|
|
(781,548
|
)
|
371,339
|
|
|||||
Inventories
|
19,211
|
|
85,113
|
|
235,558
|
|
—
|
|
339,882
|
|
|||||
Income taxes refundable
|
1,426
|
|
—
|
|
2,676
|
|
—
|
|
4,102
|
|
|||||
Prepaid expenses
|
12,155
|
|
2,508
|
|
24,407
|
|
—
|
|
39,070
|
|
|||||
Other current assets
|
3,355
|
|
(1,980
|
)
|
19,584
|
|
—
|
|
20,959
|
|
|||||
Total current assets
|
81,122
|
|
726,512
|
|
845,089
|
|
(781,548
|
)
|
871,175
|
|
|||||
Investment in subsidiaries
|
4,934,820
|
|
1,366,126
|
|
844,044
|
|
(7,144,990
|
)
|
—
|
|
|||||
Property, plant and equipment, net
|
392,718
|
|
503,739
|
|
795,101
|
|
—
|
|
1,691,558
|
|
|||||
Intangible assets, net
|
48,619
|
|
193,338
|
|
337,356
|
|
—
|
|
579,313
|
|
|||||
Goodwill
|
49,902
|
|
490,748
|
|
681,732
|
|
—
|
|
1,222,382
|
|
|||||
Investment in unconsolidated subsidiaries
|
13,078
|
|
—
|
|
420,303
|
|
—
|
|
433,381
|
|
|||||
Operating lease right-of-use asset
|
75,150
|
|
34,974
|
|
19,597
|
|
—
|
|
129,721
|
|
|||||
Other assets
|
38,490
|
|
140
|
|
14,857
|
|
—
|
|
53,487
|
|
|||||
Deferred taxes
|
—
|
|
—
|
|
14,037
|
|
—
|
|
14,037
|
|
|||||
|
$
|
5,633,899
|
|
$
|
3,315,577
|
|
$
|
3,972,116
|
|
$
|
(7,926,538
|
)
|
$
|
4,995,054
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
|||||||
Current portion of long-term debt
|
$
|
11,908
|
|
$
|
5
|
|
$
|
11,780
|
|
$
|
—
|
|
$
|
23,693
|
|
Accounts payable
|
807,675
|
|
27,833
|
|
138,539
|
|
(781,536
|
)
|
192,511
|
|
|||||
Income taxes payable
|
300
|
|
—
|
|
8,561
|
|
—
|
|
8,861
|
|
|||||
Current operating lease liability
|
21,546
|
|
10,673
|
|
7,557
|
|
—
|
|
39,776
|
|
|||||
Accrued expenses
|
85,734
|
|
27,109
|
|
168,500
|
|
(12
|
)
|
281,331
|
|
|||||
Total current liabilities
|
927,163
|
|
65,620
|
|
334,937
|
|
(781,548
|
)
|
546,172
|
|
|||||
Long-term debt, net of current portion
|
1,032,803
|
|
16
|
|
630,944
|
|
—
|
|
1,663,763
|
|
|||||
Long-term operating lease liability
|
53,587
|
|
23,701
|
|
11,812
|
|
—
|
|
89,100
|
|
|||||
Other noncurrent liabilities
|
78,220
|
|
—
|
|
35,764
|
|
—
|
|
113,984
|
|
|||||
Deferred income taxes
|
95,191
|
|
—
|
|
130,145
|
|
—
|
|
225,336
|
|
|||||
Total liabilities
|
2,186,964
|
|
89,337
|
|
1,143,602
|
|
(781,548
|
)
|
2,638,355
|
|
|||||
Total stockholders’ equity
|
3,446,935
|
|
3,226,240
|
|
2,828,514
|
|
(7,144,990
|
)
|
2,356,699
|
|
|||||
|
$
|
5,633,899
|
|
$
|
3,315,577
|
|
$
|
3,972,116
|
|
$
|
(7,926,538
|
)
|
$
|
4,995,054
|
|
|
Parent
|
Guarantors
|
Non-guarantors
|
Eliminations
|
Consolidated
|
||||||||||
ASSETS
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
995
|
|
$
|
32
|
|
$
|
106,235
|
|
$
|
—
|
|
$
|
107,262
|
|
Restricted cash
|
103
|
|
—
|
|
4
|
|
—
|
|
107
|
|
|||||
Accounts receivable
|
56,113
|
|
619,628
|
|
461,005
|
|
(751,009
|
)
|
385,737
|
|
|||||
Inventories
|
23,752
|
|
83,261
|
|
234,015
|
|
—
|
|
341,028
|
|
|||||
Income taxes refundable
|
2,851
|
|
—
|
|
3,611
|
|
—
|
|
6,462
|
|
|||||
Prepaid expenses
|
12,890
|
|
2,936
|
|
19,421
|
|
—
|
|
35,247
|
|
|||||
Other current assets
|
2,680
|
|
(1,418
|
)
|
20,837
|
|
—
|
|
22,099
|
|
|||||
Total current assets
|
99,384
|
|
704,439
|
|
845,128
|
|
(751,009
|
)
|
897,942
|
|
|||||
Investment in subsidiaries
|
4,880,193
|
|
1,366,126
|
|
844,044
|
|
(7,090,363
|
)
|
—
|
|
|||||
Property, plant and equipment, net
|
375,824
|
|
503,130
|
|
808,904
|
|
—
|
|
1,687,858
|
|
|||||
Intangible assets, net
|
50,132
|
|
200,936
|
|
344,794
|
|
—
|
|
595,862
|
|
|||||
Goodwill
|
49,506
|
|
490,748
|
|
688,905
|
|
—
|
|
1,229,159
|
|
|||||
Investment in unconsolidated subsidiary
|
13,969
|
|
—
|
|
396,208
|
|
—
|
|
410,177
|
|
|||||
Other assets
|
39,395
|
|
138
|
|
13,842
|
|
—
|
|
53,375
|
|
|||||
Deferred income taxes
|
—
|
|
—
|
|
14,981
|
|
—
|
|
14,981
|
|
|||||
|
$
|
5,508,403
|
|
$
|
3,265,517
|
|
$
|
3,956,806
|
|
$
|
(7,841,372
|
)
|
$
|
4,889,354
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
|||||||
Current portion of long-term debt
|
$
|
3,558
|
|
$
|
5
|
|
$
|
3,929
|
|
$
|
—
|
|
$
|
7,492
|
|
Accounts payable
|
783,406
|
|
24,388
|
|
162,678
|
|
(750,993
|
)
|
219,479
|
|
|||||
Income taxes payable
|
(10
|
)
|
—
|
|
4,053
|
|
—
|
|
4,043
|
|
|||||
Accrued expenses
|
107,572
|
|
33,387
|
|
168,541
|
|
(16
|
)
|
309,484
|
|
|||||
Total current liabilities
|
894,526
|
|
57,780
|
|
339,201
|
|
(751,009
|
)
|
540,498
|
|
|||||
Long-term debt, net of current portion
|
1,019,130
|
|
18
|
|
647,792
|
|
—
|
|
1,666,940
|
|
|||||
Other noncurrent liabilities
|
78,589
|
|
—
|
|
36,443
|
|
—
|
|
115,032
|
|
|||||
Deferred income taxes
|
95,710
|
|
—
|
|
135,353
|
|
—
|
|
231,063
|
|
|||||
Total liabilities
|
2,087,955
|
|
57,798
|
|
1,158,789
|
|
(751,009
|
)
|
2,553,533
|
|
|||||
Total stockholders’ equity
|
3,420,448
|
|
3,207,719
|
|
2,798,017
|
|
(7,090,363
|
)
|
2,335,821
|
|
|||||
|
$
|
5,508,403
|
|
$
|
3,265,517
|
|
$
|
3,956,806
|
|
$
|
(7,841,372
|
)
|
$
|
4,889,354
|
|
|
Parent
|
Guarantors
|
Non-guarantors
|
Eliminations
|
Consolidated
|
||||||||||
Net sales
|
$
|
160,230
|
|
$
|
329,991
|
|
$
|
403,911
|
|
$
|
(59,028
|
)
|
$
|
835,104
|
|
Cost and expenses:
|
|
|
|
|
|
||||||||||
Cost of sales and operating expenses
|
128,392
|
|
267,194
|
|
310,105
|
|
(59,028
|
)
|
646,663
|
|
|||||
Selling, general and administrative expenses
|
47,423
|
|
11,947
|
|
25,633
|
|
—
|
|
85,003
|
|
|||||
Depreciation and amortization
|
14,373
|
|
26,112
|
|
38,679
|
|
—
|
|
79,164
|
|
|||||
Total costs and expenses
|
190,188
|
|
305,253
|
|
374,417
|
|
(59,028
|
)
|
810,830
|
|
|||||
Operating income/(loss)
|
(29,958
|
)
|
24,738
|
|
29,494
|
|
—
|
|
24,274
|
|
|||||
|
|
|
|
|
|
|
|
|
|||||||
Interest expense
|
(14,027
|
)
|
(32
|
)
|
(5,817
|
)
|
—
|
|
(19,876
|
)
|
|||||
Foreign currency losses
|
(4
|
)
|
—
|
|
(728
|
)
|
—
|
|
(732
|
)
|
|||||
Gain on disposal of subsidiary
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||
Other expense, net
|
(1,567
|
)
|
(1,212
|
)
|
254
|
|
—
|
|
(2,525
|
)
|
|||||
Equity in net loss of unconsolidated subsidiaries
|
(891
|
)
|
—
|
|
24,664
|
|
—
|
|
23,773
|
|
|||||
Earnings in investments in subsidiaries
|
54,627
|
|
—
|
|
—
|
|
(54,627
|
)
|
—
|
|
|||||
Income/(loss) before taxes
|
8,180
|
|
23,494
|
|
47,867
|
|
(54,627
|
)
|
24,914
|
|
|||||
Income tax expense/(benefit)
|
(9,832
|
)
|
4,973
|
|
10,133
|
|
—
|
|
5,274
|
|
|||||
Net income attributable to noncontrolling interests
|
—
|
|
—
|
|
(1,628
|
)
|
—
|
|
(1,628
|
)
|
|||||
Net income/(loss) attributable to Darling
|
$
|
18,012
|
|
$
|
18,521
|
|
$
|
36,106
|
|
$
|
(54,627
|
)
|
$
|
18,012
|
|
|
|
|
|
|
|
|
Parent
|
Guarantors
|
Non-guarantors
|
Eliminations
|
Consolidated
|
||||||||||
Net sales
|
$
|
119,625
|
|
$
|
344,603
|
|
$
|
467,808
|
|
$
|
(56,662
|
)
|
$
|
875,374
|
|
Cost and expenses:
|
|
|
|
|
|
||||||||||
Cost of sales and operating expenses
|
95,868
|
|
271,237
|
|
367,656
|
|
(56,662
|
)
|
678,099
|
|
|||||
Selling, general and administrative expenses
|
43,778
|
|
12,837
|
|
30,287
|
|
—
|
|
86,902
|
|
|||||
Depreciation and amortization
|
11,059
|
|
26,291
|
|
41,269
|
|
—
|
|
78,619
|
|
|||||
Total costs and expenses
|
150,705
|
|
310,365
|
|
439,212
|
|
(56,662
|
)
|
843,620
|
|
|||||
Operating income/(loss)
|
(31,080
|
)
|
34,238
|
|
28,596
|
|
—
|
|
31,754
|
|
|||||
|
|
|
|
|
|
|
|
|
|||||||
Interest expense
|
(14,364
|
)
|
3,763
|
|
(12,523
|
)
|
—
|
|
(23,124
|
)
|
|||||
Foreign currency gains/(losses)
|
(23
|
)
|
(63
|
)
|
(1,395
|
)
|
—
|
|
(1,481
|
)
|
|||||
Other income/(expense), net
|
(3,410
|
)
|
(1,326
|
)
|
2,220
|
|
—
|
|
(2,516
|
)
|
|||||
Equity in net income/(loss) of unconsolidated subsidiaries
|
(498
|
)
|
—
|
|
97,652
|
|
—
|
|
97,154
|
|
|||||
Earnings in investments in subsidiaries
|
144,880
|
|
—
|
|
—
|
|
(144,880
|
)
|
—
|
|
|||||
Income/(loss) before taxes
|
95,505
|
|
36,612
|
|
114,550
|
|
(144,880
|
)
|
101,787
|
|
|||||
Income tax expense/(benefit)
|
(1,800
|
)
|
1,335
|
|
4,177
|
|
—
|
|
3,712
|
|
|||||
Net income attributable to noncontrolling interests
|
—
|
|
—
|
|
(770
|
)
|
—
|
|
(770
|
)
|
|||||
Net income/(loss) attributable to Darling
|
$
|
97,305
|
|
$
|
35,277
|
|
$
|
109,603
|
|
$
|
(144,880
|
)
|
$
|
97,305
|
|
|
|
|
|
|
|
|
Parent
|
Guarantors
|
Non-guarantors
|
Eliminations
|
Consolidated
|
||||||||||
Net income/(loss)
|
$
|
19,640
|
|
$
|
18,521
|
|
$
|
36,106
|
|
$
|
(54,627
|
)
|
$
|
19,640
|
|
Other comprehensive income/(loss), net of tax:
|
|
|
|
|
|
||||||||||
Foreign currency translation
|
507
|
|
—
|
|
(5,393
|
)
|
—
|
|
(4,886
|
)
|
|||||
Pension adjustments
|
767
|
|
—
|
|
91
|
|
—
|
|
858
|
|
|||||
Foreign exchange derivative adjustments
|
—
|
|
—
|
|
(1,937
|
)
|
—
|
|
(1,937
|
)
|
|||||
Total other comprehensive income/(loss), net of tax
|
1,274
|
|
—
|
|
(7,239
|
)
|
—
|
|
(5,965
|
)
|
|||||
Total comprehensive income/(loss)
|
20,914
|
|
18,521
|
|
28,867
|
|
(54,627
|
)
|
13,675
|
|
|||||
Total comprehensive loss attributable to noncontrolling interest
|
—
|
|
—
|
|
3,387
|
|
—
|
|
3,387
|
|
|||||
Total comprehensive income/(loss) attributable to Darling
|
$
|
20,914
|
|
$
|
18,521
|
|
$
|
25,480
|
|
$
|
(54,627
|
)
|
$
|
10,288
|
|
|
|
|
|
|
|
|
Parent
|
Guarantors
|
Non-guarantors
|
Eliminations
|
Consolidated
|
||||||||||
Net income/(loss)
|
$
|
98,075
|
|
$
|
35,277
|
|
$
|
109,603
|
|
$
|
(144,880
|
)
|
$
|
98,075
|
|
Other comprehensive income/(loss), net of tax:
|
|
|
|
|
|
||||||||||
Foreign currency translation
|
—
|
|
—
|
|
17,295
|
|
—
|
|
17,295
|
|
|||||
Pension adjustments
|
566
|
|
—
|
|
101
|
|
—
|
|
667
|
|
|||||
Natural gas swap derivative adjustments
|
22
|
|
—
|
|
—
|
|
—
|
|
22
|
|
|||||
Corn option derivative adjustments
|
(1,605
|
)
|
—
|
|
—
|
|
—
|
|
(1,605
|
)
|
|||||
Total other comprehensive income/(loss), net of tax
|
(1,017
|
)
|
—
|
|
17,396
|
|
—
|
|
16,379
|
|
|||||
Total comprehensive income/(loss)
|
97,058
|
|
35,277
|
|
126,999
|
|
(144,880
|
)
|
114,454
|
|
|||||
Total comprehensive income attributable to noncontrolling interest
|
—
|
|
—
|
|
1,287
|
|
—
|
|
1,287
|
|
|||||
Total comprehensive income/(loss) attributable to Darling
|
$
|
97,058
|
|
$
|
35,277
|
|
$
|
125,712
|
|
$
|
(144,880
|
)
|
$
|
113,167
|
|
|
|
|
|
|
|
|
Parent
|
Guarantors
|
Non-guarantors
|
Eliminations
|
Consolidated
|
||||||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
||||||||||
Net income/(loss)
|
$
|
19,640
|
|
$
|
18,521
|
|
$
|
36,106
|
|
$
|
(54,627
|
)
|
$
|
19,640
|
|
Earnings in investments in subsidiaries
|
(54,627
|
)
|
—
|
|
—
|
|
54,627
|
|
—
|
|
|||||
Other operating cash flows
|
52,135
|
|
(2,881
|
)
|
(20,293
|
)
|
—
|
|
28,961
|
|
|||||
Net cash provided by operating activities
|
17,148
|
|
15,640
|
|
15,813
|
|
—
|
|
48,601
|
|
|||||
|
|
|
|
|
|
||||||||||
Cash flows from investing activities:
|
|
|
|
|
|
||||||||||
Capital expenditures
|
(34,303
|
)
|
(23,498
|
)
|
(26,468
|
)
|
—
|
|
(84,269
|
)
|
|||||
Acquisitions
|
(1,157
|
)
|
—
|
|
(274
|
)
|
—
|
|
(1,431
|
)
|
|||||
Gross proceeds from sale of property, plant and equipment and other assets
|
132
|
|
7,016
|
|
720
|
|
—
|
|
7,868
|
|
|||||
Proceeds from insurance settlements
|
—
|
|
845
|
|
—
|
|
—
|
|
845
|
|
|||||
Payments related to routes and other intangibles
|
—
|
|
—
|
|
(2,778
|
)
|
—
|
|
(2,778
|
)
|
|||||
Net cash used in investing activities
|
(35,328
|
)
|
(15,637
|
)
|
(28,800
|
)
|
—
|
|
(79,765
|
)
|
|||||
|
|
|
|
|
|
||||||||||
Cash flows from financing activities:
|
|
|
|
|
|
||||||||||
Proceeds for long-term debt
|
—
|
|
—
|
|
2,138
|
|
—
|
|
2,138
|
|
|||||
Payments on long-term debt
|
—
|
|
(2
|
)
|
(10,972
|
)
|
—
|
|
(10,974
|
)
|
|||||
Borrowings from revolving facilities
|
50,000
|
|
—
|
|
106,829
|
|
—
|
|
156,829
|
|
|||||
Payments on revolving facilities
|
(37,000
|
)
|
—
|
|
(101,147
|
)
|
—
|
|
(138,147
|
)
|
|||||
Net cash overdraft financing
|
8,350
|
|
—
|
|
6,175
|
|
—
|
|
14,525
|
|
|||||
Issuances of common stock
|
12
|
|
—
|
|
—
|
|
—
|
|
12
|
|
|||||
Minimum withholding taxes paid on stock awards
|
(3,190
|
)
|
—
|
|
—
|
|
—
|
|
(3,190
|
)
|
|||||
Net cash provided/(used) in financing activities
|
18,172
|
|
(2
|
)
|
3,023
|
|
—
|
|
21,193
|
|
|||||
|
|
|
|
|
|
||||||||||
Effect of exchange rate changes on cash
|
—
|
|
—
|
|
(1,575
|
)
|
—
|
|
(1,575
|
)
|
|||||
|
|
|
|
|
|
||||||||||
Net decrease in cash, cash equivalents and restricted cash
|
(8
|
)
|
1
|
|
(11,539
|
)
|
—
|
|
(11,546
|
)
|
|||||
Cash, cash equivalents and restricted cash at beginning of period
|
1,098
|
|
32
|
|
106,239
|
|
—
|
|
107,369
|
|
|||||
Cash, cash equivalents and restricted cash at end of period
|
$
|
1,090
|
|
$
|
33
|
|
$
|
94,700
|
|
$
|
—
|
|
$
|
95,823
|
|
|
Parent
|
Guarantors
|
Non-guarantors
|
Eliminations
|
Consolidated
|
||||||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||||||
Net income/(loss)
|
$
|
98,075
|
|
$
|
35,277
|
|
$
|
109,603
|
|
$
|
(144,880
|
)
|
$
|
98,075
|
|
Earnings in investments in subsidiaries
|
(144,880
|
)
|
—
|
|
—
|
|
144,880
|
|
—
|
|
|||||
Other operating cash flows
|
30,782
|
|
(24,262
|
)
|
(77,671
|
)
|
—
|
|
(71,151
|
)
|
|||||
Net cash provided/(used) by operating activities
|
(16,023
|
)
|
11,015
|
|
31,932
|
|
—
|
|
26,924
|
|
|||||
|
|
|
|
|
|
||||||||||
Cash flows from investing activities:
|
|
|
|
|
|
||||||||||
Capital expenditures
|
(12,183
|
)
|
(13,396
|
)
|
(31,008
|
)
|
—
|
|
(56,587
|
)
|
|||||
Investment in subsidiaries and affiliates
|
(3,500
|
)
|
—
|
|
—
|
|
—
|
|
(3,500
|
)
|
|||||
Proceeds from sale of investment in subsidiary
|
—
|
|
—
|
|
2,805
|
|
—
|
|
2,805
|
|
|||||
Gross proceeds from sale of property, plant and equipment and other assets
|
828
|
|
321
|
|
330
|
|
—
|
|
1,479
|
|
|||||
Proceeds from insurance settlements
|
—
|
|
503
|
|
—
|
|
—
|
|
503
|
|
|||||
Payments related to routes and other intangibles
|
—
|
|
—
|
|
(15
|
)
|
—
|
|
(15
|
)
|
|||||
Net cash used in investing activities
|
(14,855
|
)
|
(12,572
|
)
|
(27,888
|
)
|
—
|
|
(55,315
|
)
|
|||||
|
|
|
|
|
|
||||||||||
Cash flows from financing activities:
|
|
|
|
|
|
||||||||||
Proceeds for long-term debt
|
—
|
|
—
|
|
3,876
|
|
—
|
|
3,876
|
|
|||||
Payments on long-term debt
|
(22
|
)
|
—
|
|
(9,600
|
)
|
—
|
|
(9,622
|
)
|
|||||
Borrowings from revolving credit facility
|
62,000
|
|
—
|
|
73,184
|
|
—
|
|
135,184
|
|
|||||
Payments on revolving credit facility
|
(29,000
|
)
|
—
|
|
(51,019
|
)
|
—
|
|
(80,019
|
)
|
|||||
Net cash overdraft financing
|
—
|
|
—
|
|
(331
|
)
|
—
|
|
(331
|
)
|
|||||
Deferred loan costs
|
(1,094
|
)
|
—
|
|
—
|
|
—
|
|
(1,094
|
)
|
|||||
Issuances of common stock
|
182
|
|
—
|
|
—
|
|
—
|
|
182
|
|
|||||
Minimum withholding taxes paid on stock awards
|
(2,013
|
)
|
—
|
|
(5
|
)
|
—
|
|
(2,018
|
)
|
|||||
Net cash provided by financing activities
|
30,053
|
|
—
|
|
16,105
|
|
—
|
|
46,158
|
|
|||||
|
|
|
|
|
|
||||||||||
Effect of exchange rate changes on cash
|
—
|
|
—
|
|
(1,672
|
)
|
—
|
|
(1,672
|
)
|
|||||
|
|
|
|
|
|
||||||||||
Net decrease in cash, cash equivalents and restricted cash
|
(825
|
)
|
(1,557
|
)
|
18,477
|
|
—
|
|
16,095
|
|
|||||
Cash, cash equivalents and restricted cash at beginning of period
|
1,827
|
|
2,993
|
|
102,096
|
|
—
|
|
106,916
|
|
|||||
Cash, cash equivalents and restricted cash at end of period
|
$
|
1,002
|
|
$
|
1,436
|
|
$
|
120,573
|
|
$
|
—
|
|
$
|
123,011
|
|
•
|
Finished product commodity prices
|
•
|
Segment results
|
•
|
Foreign currency
|
•
|
Corporate activities
|
•
|
Non-U.S. GAAP measures
|
|
Avg. Price
1st Quarter
2019
|
Avg. Price
1st Quarter
2018
|
Increase/(Decrease)
|
%
Increase/(Decrease)
|
|
Jacobsen:
|
|
|
|
|
|
MBM (Illinois)
|
$ 250.00/ton
|
$ 250.61/ton
|
$ (0.61)/ton
|
(0.2
|
)%
|
Feed Grade PM (Mid-South)
|
$ 269.26/ton
|
$ 250.16/ton
|
$ 19.10/ton
|
7.6
|
%
|
Pet Food PM (Mid-South)
|
$ 684.51/ton
|
$ 781.27/ton
|
$ (96.76)/ton
|
(12.4
|
)%
|
Feather meal (Mid-South)
|
$ 447.83/ton
|
$ 409.26/ton
|
$ 38.57/ton
|
9.4
|
%
|
BFT (Chicago)
|
$ 27.00/cwt
|
$ 26.14/cwt
|
$ 0.86/cwt
|
3.3
|
%
|
YG (Illinois)
|
$ 20.72/cwt
|
$ 19.61/cwt
|
$ 1.11/cwt
|
5.7
|
%
|
Corn (Illinois)
|
$ 3.69/bushel
|
$ 3.62/bushel
|
$ 0.07/bushel
|
1.9
|
%
|
Reuters:
|
|
|
|
|
|
Palm Oil (CIF Rotterdam)
|
$ 550.00/MT
|
$ 675.00/MT
|
$ (125.00)/MT
|
(18.5
|
)%
|
Soy meal (CIF Rotterdam)
|
$ 353.00/MT
|
$ 412.00/MT
|
$ (59.00)/MT
|
(14.3
|
)%
|
|
Avg. Price
1st Quarter
2019
|
Avg. Price
4th Quarter
2018
|
Increase/(Decrease)
|
%
Increase/(Decrease)
|
|
Jacobsen:
|
|
|
|
|
|
MBM (Illinois)
|
$ 250.00/ton
|
$ 250.18/ton
|
$ (0.18)/ton
|
(0.1
|
)%
|
Feed Grade PM (Mid-South)
|
$ 269.26/ton
|
$ 267.19/ton
|
$ 2.07/ton
|
0.8
|
%
|
Pet Food PM (Mid-South)
|
$ 684.51/ton
|
$ 540.68/ton
|
$ 143.83/ton
|
26.6
|
%
|
Feather meal (Mid-South)
|
$ 447.83/ton
|
$ 405.90/ton
|
$ 41.93/ton
|
10.3
|
%
|
BFT (Chicago)
|
$ 27.00/cwt
|
$ 25.80/cwt
|
$ 1.20/cwt
|
4.7
|
%
|
YG (Illinois)
|
$ 20.72/cwt
|
$ 19.91/cwt
|
$ 0.81/cwt
|
4.1
|
%
|
Corn (Illinois)
|
$ 3.69/bushel
|
$ 3.69/bushel
|
$ 0.00/bushel
|
—
|
%
|
Reuters:
|
|
|
|
|
|
Palm Oil (CIF Rotterdam)
|
$ 550.00/MT
|
$ 497.00/MT
|
$ 53.00/MT
|
10.7
|
%
|
Soy meal (CIF Rotterdam)
|
$ 353.00/MT
|
$ 368.00/MT
|
$ (15.00)/MT
|
(4.1
|
)%
|
(in thousands, except percentages)
|
Feed Ingredients
|
Food Ingredients
|
Fuel Ingredients
|
Corporate
|
Total
|
||||||||||
Three Months Ended March 30, 2019
|
|
|
|
|
|
||||||||||
Net Sales
|
$
|
495,819
|
|
$
|
279,164
|
|
$
|
60,121
|
|
$
|
—
|
|
$
|
835,104
|
|
Cost of sales and operating expenses
|
382,468
|
|
214,118
|
|
50,077
|
|
—
|
|
646,663
|
|
|||||
Gross Margin
|
113,351
|
|
65,046
|
|
10,044
|
|
—
|
|
188,441
|
|
|||||
|
|
|
|
|
|
||||||||||
Gross Margin %
|
22.9
|
%
|
23.3
|
%
|
16.7
|
%
|
—
|
%
|
22.6
|
%
|
|||||
|
|
|
|
|
|
||||||||||
Selling, general and administrative expenses
|
48,831
|
|
21,887
|
|
(754
|
)
|
15,039
|
|
85,003
|
|
|||||
Depreciation and amortization
|
49,369
|
|
19,511
|
|
7,798
|
|
2,486
|
|
79,164
|
|
|||||
Segment operating income/(loss)
|
15,151
|
|
23,648
|
|
3,000
|
|
(17,525
|
)
|
24,274
|
|
|||||
|
|
|
|
|
|
||||||||||
Equity in net income/(loss) of unconsolidated subsidiaries
|
(504
|
)
|
—
|
|
24,277
|
|
—
|
|
23,773
|
|
|||||
Segment income/(loss)
|
14,647
|
|
23,648
|
|
27,277
|
|
(17,525
|
)
|
48,047
|
|
(in thousands, except percentages)
|
Feed Ingredients
|
Food Ingredients
|
Fuel Ingredients
|
Corporate
|
Total
|
||||||||||
Three Months Ended March 31, 2018
|
|
|
|
|
|
||||||||||
Net Sales
|
$
|
485,798
|
|
$
|
305,520
|
|
$
|
84,056
|
|
$
|
—
|
|
$
|
875,374
|
|
Cost of sales and operating expenses
|
369,088
|
|
249,185
|
|
59,826
|
|
—
|
|
678,099
|
|
|||||
Gross Margin
|
116,710
|
|
56,335
|
|
24,230
|
|
—
|
|
197,275
|
|
|||||
|
|
|
|
|
|
||||||||||
Gross Margin %
|
24.0
|
%
|
18.4
|
%
|
28.8
|
%
|
—
|
%
|
22.5
|
%
|
|||||
|
|
|
|
|
|
||||||||||
Selling, general and administrative expenses
|
48,265
|
|
23,861
|
|
(1,398
|
)
|
16,174
|
|
86,902
|
|
|||||
Depreciation and amortization
|
46,789
|
|
20,640
|
|
8,471
|
|
2,719
|
|
78,619
|
|
|||||
Segment operating income/(loss)
|
21,656
|
|
11,834
|
|
17,157
|
|
(18,893
|
)
|
31,754
|
|
|||||
|
|
|
|
|
|
||||||||||
Equity in net income/(loss) of unconsolidated subsidiaries
|
(45
|
)
|
—
|
|
97,199
|
|
—
|
|
97,154
|
|
|||||
Segment income/(loss)
|
21,611
|
|
11,834
|
|
114,356
|
|
(18,893
|
)
|
128,908
|
|
|
Fats
|
Proteins
|
Other Rendering
|
Total Rendering
|
Used Cooking Oil
|
Bakery
|
Other
|
Total
|
||||||||||||||||
Net sales three months ended March 31, 2018
|
$
|
143.5
|
|
$
|
203.4
|
|
$
|
31.4
|
|
$
|
378.3
|
|
$
|
36.6
|
|
$
|
46.8
|
|
$
|
24.1
|
|
$
|
485.8
|
|
Increase/(decrease) in sales volumes
|
5.3
|
|
16.0
|
|
—
|
|
21.3
|
|
8.5
|
|
(2.1
|
)
|
—
|
|
27.7
|
|
||||||||
Increase/(decrease) in finished product prices
|
(1.7
|
)
|
(7.1
|
)
|
—
|
|
(8.8
|
)
|
0.4
|
|
1.0
|
|
—
|
|
(7.4
|
)
|
||||||||
Increase/(decrease) due to currency exchange rates
|
(2.2
|
)
|
(6.5
|
)
|
(0.4
|
)
|
(9.1
|
)
|
(0.1
|
)
|
—
|
|
—
|
|
(9.2
|
)
|
||||||||
Other change (1)
|
—
|
|
—
|
|
10.2
|
|
10.2
|
|
—
|
|
—
|
|
(11.3
|
)
|
(1.1
|
)
|
||||||||
Total change
|
1.4
|
|
2.4
|
|
9.8
|
|
13.6
|
|
8.8
|
|
(1.1
|
)
|
(11.3
|
)
|
10.0
|
|
||||||||
Net sales three months ended March 30, 2019
|
$
|
144.9
|
|
$
|
205.8
|
|
$
|
41.2
|
|
$
|
391.9
|
|
$
|
45.4
|
|
$
|
45.7
|
|
$
|
12.8
|
|
$
|
495.8
|
|
(1)
|
The decrease in other net sales is primarily a result of the sale of the Company's industrial residuals business in May 2018.
|
|
Three Months Ended
|
|||||
(dollars in thousands)
|
March 30,
2019 |
March 31,
2018 |
||||
Net income/(loss) attributable to Darling
|
$
|
18,012
|
|
$
|
97,305
|
|
Depreciation and amortization
|
79,164
|
|
78,619
|
|
||
Interest expense
|
19,876
|
|
23,124
|
|
||
Income tax expense/(benefit)
|
5,274
|
|
3,712
|
|
||
Foreign currency loss/(gain)
|
732
|
|
1,481
|
|
||
Other expense/(income), net
|
2,525
|
|
2,516
|
|
||
Equity in net (income)/loss of unconsolidated subsidiaries
|
(23,773
|
)
|
(97,154
|
)
|
||
Net income attributable to non-controlling interests
|
1,628
|
|
770
|
|
||
Adjusted EBITDA
|
$
|
103,438
|
|
$
|
110,373
|
|
|
|
|
||||
Foreign currency exchange impact (1)
|
6,056
|
|
—
|
|
||
Pro forma Adjusted EBITDA to Foreign Currency (Non-GAAP)
|
$
|
109,494
|
|
$
|
110,373
|
|
|
|
|
||||
DGD Joint Venture Adjusted EBITDA (Darling's Share)
|
$
|
29,828
|
|
$
|
100,071
|
|
Senior Notes:
|
|
||
5.375 % Notes due 2022
|
$
|
500,000
|
|
Less unamortized deferred loan costs
|
(4,503
|
)
|
|
Carrying value of 5.375% Notes due 2022
|
$
|
495,497
|
|
|
|
||
3.625 % Notes due 2026 - Denominated in euros
|
$
|
578,371
|
|
Less unamortized deferred loan costs
|
(7,753
|
)
|
|
Carrying value of 3.625% Notes due 2026
|
$
|
570,618
|
|
|
|
||
Amended Credit Agreement:
|
|
||
Term Loan A
|
$
|
61,030
|
|
Less unamortized deferred loan costs
|
(316
|
)
|
|
Carrying value of Term Loan A
|
60,714
|
|
|
|
|
||
Term Loan B
|
$
|
495,000
|
|
Less unamortized deferred loan costs
|
(8,741
|
)
|
|
Carrying value of Term Loan B
|
$
|
486,259
|
|
|
|
||
Revolving Credit Facility:
|
|
||
Maximum availability
|
$
|
1,000,000
|
|
Ancillary Facilities
|
25,000
|
|
|
Borrowings outstanding
|
50,061
|
|
|
Letters of credit issued
|
23,458
|
|
|
Availability
|
$
|
901,481
|
|
|
|
||
Other Debt
|
$
|
24,307
|
|
•
|
As of
March 30, 2019
, the Company had availability of $
901.5 million
under the revolving loan facility, taking into account that the Company had $
50.1 million
in outstanding borrowings, ancillary facilities and letters of credit issued of $
23.5 million
.
|
•
|
As of
March 30, 2019
, the Company has borrowed all $
350.0 million
under the term loan A facility and repaid approximately CAD$
119.4 million
and $
161.8 million
, which when repaid, cannot be reborrowed. The term loan A facility is repayable in quarterly installments which commenced on March 31, 2017 as follows: for the first eight quarters following December 16, 2016,
1.25%
of the original principal amount of the term loan A facility outstanding on the Fourth Amendment date, for the ninth through sixteenth quarters following December 16, 2016,
1.875%
of the original principal amount of the term loan A facility outstanding on the Fourth Amendment date, and for each quarterly installment after such sixteenth installment until December 16, 2021,
3.75%
of the original principal amount of the term loan A facility outstanding on the Fourth Amendment date. The term loan A facility will mature on December 16, 2021.
|
•
|
As of
March 30, 2019
, the Company has borrowed all $
525.0 million
under the terms of the term loan B facility and repaid approximately $
30.0 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 December 18, 2017, and continuing until the last day of each quarter period ending immediately prior to December 18, 2024; and one final installment in the amount of the relevant term loan B facility then outstanding, due on December 18, 2024. The term loan B facility will mature on December 18, 2024.
|
•
|
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
2.00%
per annum or base rate/Canadian prime rate plus
1.00%
per annum, subject to certain step-downs or step-ups based on the Company's total leverage ratio. The interest rate applicable to any borrowings under the term loan B facility will equal the base rate plus
1.00%
or LIBOR plus
2.00%
.
|
Other commercial commitments:
|
|
||
Standby letters of credit
|
$
|
23,458
|
|
Foreign bank guarantees
|
17,805
|
|
|
Total other commercial commitments:
|
$
|
41,263
|
|
Functional Currency
|
|
Contract Currency
|
|
Range of
|
U.S.
|
||||||
Type
|
Amount
|
|
Type
|
Amount
|
|
Hedge rates
|
Equivalent
|
||||
Brazilian real
|
49,321
|
|
|
Euro
|
10,988
|
|
|
4.26 - 5.04
|
$
|
12,627
|
|
Brazilian real
|
1,171,313
|
|
|
U.S. dollar
|
330,455
|
|
|
3.35 - 4.28
|
330,455
|
|
|
Euro
|
44,675
|
|
|
U.S. dollar
|
51,207
|
|
|
1.13 - 1.21
|
51,207
|
|
|
Euro
|
22,121
|
|
|
Polish zloty
|
95,280
|
|
|
4.29 - 4.32
|
24,843
|
|
|
Euro
|
6,098
|
|
|
Japanese yen
|
768,000
|
|
|
123.94 - 131.83
|
6,848
|
|
|
Euro
|
38,245
|
|
|
Chinese renminbi
|
294,273
|
|
|
7.60 - 7.89
|
42,952
|
|
|
Euro
|
13,632
|
|
|
Australian dollar
|
21,850
|
|
|
1.6
|
15,309
|
|
|
Euro
|
4,573
|
|
|
British pound
|
3,961
|
|
|
0.86 - 0.91
|
5,136
|
|
|
Polish zloty
|
22,168
|
|
|
Euro
|
5,156
|
|
|
4.3
|
5,788
|
|
|
British pound
|
276
|
|
|
Euro
|
322
|
|
|
0.86
|
361
|
|
|
Japanese yen
|
296,912
|
|
|
U.S. dollar
|
2,710
|
|
|
107.53 - 111.55
|
2,710
|
|
|
U.S. dollar
|
821
|
|
|
Japanese yen
|
90,000
|
|
|
109.58
|
821
|
|
|
|
|
|
|
|
|
|
$
|
499,057
|
|
|
10.1
|
|||
|
31.1
|
|||
|
31.2
|
|||
|
32
|
|||
|
101
|
Interactive Data Files Pursuant to Rule 405 of Regulation S-T: (i) Consolidated Balance Sheets as of March 30, 2019 and December 29, 2018; (ii) Consolidated Statements of Operations for the three months ended March 30, 2019 and March 31, 2018; (iii) Consolidated Statements of Comprehensive Income for the three months ended March 30, 2019 and March 31, 2018; (iv) Consolidated Statements of Stockholders' Equity for the three months ended March 30, 2019; (v) Consolidated Statements of Cash Flows for the three months ended March 30, 2019 and March 31, 2018; (vi) Notes to the Consolidated Financial Statements.
|
|
|
DARLING INGREDIENTS INC.
|
|
|
|
|
|
|
|
|
|
Date:
|
May 8, 2019
|
By:
|
/s/ Brad Phillips
|
|
|
|
Brad Phillips
|
|
|
|
Chief Financial Officer
|
|
|
|
(Principal Financial Officer and Duly Authorized Officer)
|
1.
|
The limited liability company
Darling International Netherlands BV
, established under the laws of the Netherlands, having its statutory place of business in Amsterdam and holding office at Prins Bernhardplein 200, (1097 JB) Amsterdam (herein, “
Darling BV
”), and
|
2.
|
Mr. J. Vervoort, residing in Nuenen at Lobroec 6, 5673 BA (hereafter: “
Employee
”).
|
(A)
|
Employee has been employed by the Darling Ingredients International Holding BV and/or its legal predecessors since 1 March 2006;
|
(B)
|
Following the appointment as Managing Director, parties wish to continue the employment of Employee with Darling BV as the employer and to record the terms and conditions applicable to the continued employment of Employee agreed between them in writing in this agreement (the “
Employment Agreement
”); and
|
1.
|
Function
|
(a)
|
Employee shall continue to be employed by Darling BV as Managing Director Rousselot.
|
(b)
|
Employee shall also serve as a member of the Executive Committee of Darling Inc. which is a committee appointed by the Board of Directors of Darling Inc. and reporting to the Chief Executive Officer of Darling Inc. who shall chair the Executive Committee.
|
1.2.
|
Employee is obligated to do and refrain from everything that an officer and director ought to do and refrain from, and shall devote his full working time, energy and skills to the success of Darling In.c and any other companies affiliated to Darling BV (together “
Darling Group
”). Employee will be subject to and shall observe all policies of Darling Inc applicable to its employees, executives, officers and directors.
|
1.3.
|
In his capacity as Managing Director Rousselot Employee will report to the CEO of Darling Ingredients International.
|
1.4.
|
Employee shall not perform any paid or unpaid side activities for or in relation to third parties or otherwise without the prior written approval of the CEO of Darling Ingredients International.
|
2.
|
Term
|
2.1.
|
This Employment Agreement has started with effect from 1 March 2006 for an indefinite period of time. This Employment Agreement will in any event terminate automatically (without any compensation being due) on the last day of the month during which Employee reaches the retirement date under the Employee's pension scheme (as applicable from time to time), but in any event no later than the date on which Employee will be eligible for state old-age pension benefits (
AOW
).
|
2.2.
|
This Employment Agreement is based on a 40- hour workweek. Employee is expected to work additional hours as part of this Employment Agreement as is required for the adequate fulfillment and execution of his position without being entitled to any additional remuneration.
|
2.3.
|
This Employment Agreement may be terminated in writing as per the last day of any calendar month, observing a notice period of three months for Employee and a notice period of six months for Darling BV. Darling BV will be entitled to release Employee from active duty during the notice period, whereby Employee will remain available for a proper handover of responsibilities to a successor.
|
2.4.
|
If this Employment Agreement terminates by the death of Employee, salary payments will be continued to the surviving relatives from the day of death up to and including the last day of the third month after the month of death of Employee. In addition, any accrued (and vested) entitlements under the Incentive Programs referenced in Section 4 hereto until the day of death will be paid to the surviving relatives in the customary manner and time and subject to the terms of the agreements governing such programs.
|
3.
|
Salary
|
3.1.
|
The remuneration of Employee is recorded in a remuneration package determined by the Compensation Committee of the Darling Inc Board of Directors (the “
Compensation Committee
”), after consultation with the Chief Executive Officer of Darling Inc. The remuneration may be adjusted by the Compensation Committee annually, to reflect cost of living. The annual fixed income, including holiday allowance, amounts to EUR 228.000 gross (the “
Annual Fixed Salary
”) for the year 2016. Ultimately in December of each year, the parties will consult with each other with regard to the possible increase of the annual salary with effect from 1 January of the subsequent year.
|
3.2
|
The Annual Fixed Salary, excluding holiday allowance, will be paid in 12 equal monthly installments after deduction of the mandatory statutory and agreed deductions.
|
3.3
|
The holiday allowance will be paid in the month of May of the relevant year. For the calculation of the holiday allowance, a year is deemed to start on 1 January and to end on 31 December (the “
Holiday Year
”). In the event this Employment Agreement starts or terminates during the Holiday Year, the holiday allowance will be calculated on a pro rata basis.
|
4.
|
Incentive Programs
|
(a)
|
Employee shall be entitled to participate in the Employee bonus program maintained by Darling Inc. as in effect from time to time (the “
Bonus Program
”). Specifics of the Bonus Program will be determined annually by the Compensation Committee of Darling Inc.’s’ Board of Directors.
|
(b)
|
It is agreed and acknowledged that the bonus opportunity of Employee under the Bonus Program shall be no less favorable than the opportunity under Employee's 2015 short term incentive arrangements (i.e. 30% of the Annual Fixed Salary). The specifics of the Bonus Program for 2016 will be communicated to Employee in a separate letter.
|
(c)
|
Participation levels and performance measures for the Bonus Program are determined annually by the Compensation Committee and are subject to change at the discretion of the Compensation Committee or Darling Inc.’s Board of Directors. Bonuses are not earned until the date they are paid, and participants must be employed on the date of payment to receive a bonus, subject to the discretion of the Compensation Committee or Darling Inc.’s Board of Directors to waive this requirement based on the circumstances of a participant’s departure (e.g., retirement). Payment of any bonus in a year does not entitle Employee to payment of a bonus in any preceding or subsequent year.
|
(d)
|
All equity based awards made to Employee under the Bonus Program shall be evidenced by an award agreement executed by Darling Inc. and Employee and will be subject to all applicable legal requirements and restrictions imposed on the Bonus Program pursuant to United States and other applicable law.
|
5.
|
Claw Back
|
5.1.
|
Parties agree as regards Employee's benefits under this Employment Agreement, that Darling BV has the right to unilaterally adjust and/or claw-back any awards made to the Employee (whether bonus or grants under the Incentive Programs referenced in Section 4 hereto)
if, and to the extent, (i) an independent auditor (to be appointed by the joint parties and paid for by Darling BV) has confirmed, on request of Darling BV, that such award or grant has been made on the basis of incorrect or incomplete information, and (ii) Darling BV has sufficient weighty grounds to effect such adjustment and/or claw-back taking into account the Dutch principle of reasonableness and fairness.
|
5.2.
|
If the conditions included under Section 5.1 (i) and (ii) are met, the Employee agrees to fully cooperate with the execution of any adjustment and/or claw-back under Section 5.1 hereof.
|
6.
|
Expenses
|
7.
|
Car and Telephone
|
7.1.
|
For the purposes of performing his job, Darling BV will provide Employee with a car which may be used for private purposes within reasonableness. Maximum catalogue value including VAT and private motor vehicle and motorcycle tax ( BPM) will be determined according to the Darling BV car policy.
|
7.2.
|
All costs related to this car, including the costs of use for private purposes as mentioned under Section 7.1. shall be borne by Darling BV, except for the following costs which shall be borne by Employee:
|
(a)
|
the costs of fines in relation to traffic violations;
|
(b)
|
the costs associated with additions for tax purposes (
fiscale bijtelling
);
|
(c)
|
other costs which are not related to the performance of the function (such as toll, vignette, etc.).
|
7.3.
|
Employee is obliged to return the car provided to him to Darling BV, at the first request of Darling BV if there is a legal ground for such return. In the event of suspension, the car may be reclaimed by Darling BV immediately. Employee will in any event need to return the car made available to him to Darling BV as per the day this Employment Agreement terminates. Darling BV is no longer held to reimburse any travel expenses of Employee after the car has been returned.
|
7.4.
|
Darling BV will provide Employee with electronic communication tools. Employee may use these electronic communication tools for private purposes, both internally and externally, provided that the use thereof will not interfere with the daily work and is in compliance with further guidelines of Darling BV. The use of electronic communication tools should, however, primarily and essentially relate to the tasks/activities arising from the function.
|
7.5.
|
Darling BV may ask Employee to clarify any striking use of the electronic communication tools, and charge on possible costs for private purposes. Any tax consequences arising from the private use will be for the account of Employee.
|
8.
|
Insurances
|
8.1.
|
If and to the extent Darling BV has taken out a collective health insurance for its employees pursuant to the Dutch Health Insurance Act (
Zorgverzekeringswet
), Employee can participate to such group scheme. Employee remains, however, responsible for the payment of his nominal premium and any premiums for supplemental packages.
|
8.2.
|
Employee can make use of the ANW-Hiaatverzekering (related to shortfall under the Surviving Dependents Act) and the insurance for directors' liability as taken out by Darling BV, in accordance with relevant terms.
|
9.
|
Pension
|
9.1.
|
Darling BV has arranged for a pension scheme (
pensioenvoorziening
) for Employee. To this end, Employee has been included in the pension arrangement. The rules of the pension scheme, as amended from time to time, will apply to this participation. In accordance with the provisions of the pension scheme, Employee will have to pay a contribution (
eigen bijdrage
), which contribution will be made through a payroll deduction. The pension scheme rules have been provided to Employee. The pensionable salary is maximized to a maximum amount of EUR 400,435 for 2015. This amount will be reviewed annually as part of the Employees total remuneration package and a yearly indexation will be applied to such amount using the general increase percentage that applies for employees of Darling BV.
|
10.
|
Holidays
|
10.1.
|
Employee will be entitled to 25 holidays per calendar year, to be taken whilst taking account of the interests of Darling Group.
|
10.2
|
Given the severity of his position and the recovery function of the holidays, the holidays are expected to be taken within the year that the holidays are granted. Given his position, Employee is free to determine when he will use his holidays, provided that he takes into account the interests of the Darling Group.
|
11.
|
Incapacity for work
|
11.1.
|
Notwithstanding the provisions of article 7:629 paragraph 3 up to and including 5 Dutch Civil Code, Employee will receive in case of incapacity for work during the first year of illness, however ultimately until the end of this Employment Agreement (in case that is earlier), to be calculated from the first day of the incapacity, 100% of the Annual Fixed Salary after deduction of any benefits or payments received by Employee pursuant to relevant state-provided social security or insurance arrangements taken out by Darling BV.
|
11.2
|
From the 53
rd
week up to and including the 104
th
week of the respective period of illness, however ultimately until the end of this Employment Agreement (in case that is earlier), Darling BV will pay 70% of the Annual Fixed Salary, also after deduction of any benefits or payments received by Employee pursuant to relevant state-provided social security or insurance arrangements taken out by Darling BV.
|
12.
|
Confidentiality, documents
|
12.1.
|
Employee shall, both during the continuance of his employment and after the termination thereof, keep confidential all information regarding Darling Group, and its clients and relations, whereby confidentiality is imposed on him or of which he knows, or is ought to know, the secret or confidential nature, and he shall not use this information for other purpose than required in connection with the performance of the obligations arising from this Employment Agreement.
|
12.2.
|
Employee is prohibited to keep in any manner whatsoever documents, correspondence or copies thereof, that are in his possession in connection with the performance of his activities for the Darling Group, any longer than necessary for the purpose of performance of his activities. In any event Employee is obliged to hand over with immediate effect, even without any request thereto, such documents, correspondence or copies thereof at first request and/or at the termination of the employment, or when he has not performed his duties, for whatever reason, for a period longer than four weeks.
|
13.
|
Non-compete/non solicit
|
13.1.
|
During the employment of Employee and during the Restrictive Period (as defined here below), Employee shall not without prior written approval of Darling Inc. be permitted to do any of the following in any jurisdiction where Darling Group is active directly or indirectly in any capacity whatsoever, or has any business interests, at the time of termination of this Employment Agreement:
|
(a)
|
to work for or be involved with, in any manner, directly or indirectly, paid or unpaid, any person, organization, company or enterprise pursuing activities similar to the Darling Group, including the (former) VION Ingredients Group, and/or to have or take any interest in such organization, company or enterprise. This includes, without limitation, companies involved in slaughter by-products or other products or business (directly or indirectly) derived or following from the slaughtering business such as, without limitation, Saria, Gelita, Tessenderloo , Nitta, Ten Kate, Van Hessen.
|
(b)
|
to maintain in any manner whatsoever, directly or indirectly, business contacts with any person, organization, company or enterprise with whom during the last two years preceding the termination of this Employment Agreement Employee has had any business, to the extent Darling Group has a legitimate business interest in Employee refraining from maintaining such business contact;
|
(c)
|
to induce, directly or indirectly, present employees of Darling Group, including but not limited Darling BV, Darling Inc., Darling USA and Darling Canada, or persons who in the period of two years preceding the termination of this Employment Agreement have been or were employed by such company, to terminate their employment or to hire such employees.
|
(a)
|
in the event Employee terminates this Employment Agreement through notice or otherwise, the Restrictive Period will be 18 months from the date of termination of this Employment Agreement;
|
(b)
|
in the event Darling BV terminates this Employment Agreement through notice, the Restrictive Period will be 18 months from the date notice has been served by Darling BV on Employee (and therefore 12 months from the date of termination of this Employment Agreement); provided, however, that in the event that Darling BV does not waive the non-compete clause Employee will be entitled to an additional severance which adequately reflects the imposed restrictions;
|
(c)
|
in the event Darling BV terminates this Employment Agreement with immediate effect for cause (
dringende reden
), the Restrictive Period will be 18 months from the date of termination of this Employment Agreement;
|
(d)
|
in the event this Employment Agreement is rescinded by a Court at the request of Darling BV for reasons other than cause (
dringende reden
), the restrictive period will be 12 months from the date of termination of this Employment Agreement.
|
(e)
|
in the event this Employment Agreement is rescinded by a Court at the request of Employee or at the request of Darling BV for cause (
dringende reden
), the restrictive period will be 18 months from the date of termination of this Employment Agreement.
|
14.
|
Penalty clause
|
14.1.
|
Employee will forfeit to Darling BV for a breach of Sections 12 and 13 hereof immediately, without prior notice or any judicial intervention being required, a penalty of EUR 10,000 per breach plus EUR 500 for each day that such breach continues, without prejudice to Darling BV’s right to claim the actual damages it has suffered through such breach. Section 7:650 subsections 3, 4 and 5 Dutch Civil Code and/or sections 6:92, 6:93 Dutch Civil Code (each time to the extent applicable) are explicitly excluded.
|
14.2
|
It is acknowledged and agreed that reasonable compensation for the restrictions set out in Sections 12 and 13 hereof is included in Employee's remuneration package.
|
15.
|
Rights of intellectual or industrial property
|
15.1.
|
If Employee during, or within a period of two years after termination of this Employment Agreement has invented a certain product/working method (
voortbrengsel/werkmethode
) which is to be considered as a consequence of, or pursuant to, his activities at Darling Group and which may lead in The Netherlands or elsewhere to the inception of rights, including all rights of industrial or intellectual property and explicitly including: databases, know-how, trademarks, designs, drawings, product specifications, formulas, computer programs, etc., Darling Inc. is entitled to this product/working method and the related rights.
|
15.2.
|
Employee does not have the right to mention his name or have his name mentioned in connection with the rights meant in this Section 15.1 of this Employment Agreement, with the exception of the provisions of Section 14 paragraph 1 of the Dutch Patent Act 1995 (
Rijksoctrooiwet 1995
). Employee hereby waives in relation to the rights as meant in this Section 15.1 his moral rights (
persoonlijkheidsrechten
) within the meaning of article 25 Dutch Copyright Act 1912 (
Auteurswet
1912
) and his possible entitlements to a monetary compensation in addition to his salary, all to the extent permitted by law.
|
15.3.
|
Employee shall promptly and without delay inform Darling Inc. of the inception of any right as meant in this Section and will, to the extent required, make every effort to have Darling Inc. obtain such right.
|
15.4.
|
Employee will do his utmost to ensure the maximum protection of a right as meant in Section 15.1 of this Employment Agreement, to the extent that it serves the interests of Darling Group and to the extent that it is in accordance with relevant policies.
|
15.5
|
Employee acknowledges and agrees that his salary includes compensation for the fact that the rights pursuant to Section 15.1 of this Employment Agreement accrue to Darling Inc., as well as to his cooperation to ensure that these rights will accrue to Darling Inc.
|
16.
|
Gifts
|
16.1.
|
Employee is prohibited to, in relation to the performance of his duties during the term of his employment, without the prior written consent of Darling Inc., accept or stipulate from third parties, directly or in any manner indirectly, any commission, favor or compensation in whatever form or manner.
|
16.2.
|
The provisions of Section 16.1 do not apply to the customary business gift of small value, which do not exceed the retail value of EUR 100.
|
17.
|
Final provisions
|
17.1.
|
It is agreed between the parties that Darling BV and Darling Inc. will review the taxation of Employee's earnings under this Employment Agreement.
|
17.3.
|
This Employment Agreement constitutes the entire employment agreement between the parties and supersedes all (employment) agreements previously made and given by and between the Employee and Darling Ingredients International Holding BV and its affiliated companies and will be effected per January 1, 2016.
|
17.4.
|
In this Employment Agreement, all references to Darling Inc or the affiliated undertakings or companies, means a reference to all companies belonging directly or indirectly to the Darling Group.
|
17.5.
|
The invalidity (
nietigheid
) of one or more provisions of this Employment Agreement shall not result in the invalidity of the remaining provisions of this Employment Agreement. The parties undertake to immediately hold consultations with each other in case any provision is void.
|
17.7.
|
Any dispute arising under or in connection with this agreement, including disputes in relation to the existence or validity of this Employment Agreement shall be settled by the competent court in The Netherlands.
|
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 8, 2019
|
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 8, 2019
|
|
/s/ Randall C. Stuewe
|
|
/s/ Brad Phillips
|
|
Randall C. Stuewe
|
|
Brad Phillips
|
|
Chief Executive Officer
|
|
Chief Financial Officer
|
|
Date: May 8, 2019
|
|
Date: May 8, 2019
|