Darling Ingredients Inc., a global leader in converting edible and inedible bio-nutrient streams into a wide range of ingredients and specialty products for customers in the pharmaceutical, food, pet food, feed, technical, fuel, bioenergy, and fertilizer industries, has announced financial results for the second quarter ended July 4, 2015, and that its Board of Directors approved the repurchase of up to an aggregate of $100 million of Darling's common stock, depending on market conditions.
"Our earnings improved sequentially with all segments showing EBITDA margin improvements. This is the third quarter in a row that we have been able to improve margins all while working to offset lower and volatile selling prices. Our focus on operational efficiencies and SG&A reductions are also beginning to contribute. Working capital improvements, the $25 million dividend from Diamond Green Diesel (DGD) in April 2015, along with slowing our capital spending outflows allowed us to repay nearly $70 million in debt during the quarter," said Randall Stuewe, Darling Ingredients Inc. chairman and CEO.
"The Feed Ingredients Segment achieved improved margins while facing a continuation of declining fat and protein values. Our European, USA and Canadian rendering operations performed admirably and continue to make the necessary adjustments to regain sustainable margins. Our USA restaurant services and bakery feeds business improved but we still have work to do. Raw material volumes moderated over first quarter typical with seasonality," continued Stuewe.
"Our Fuel Ingredients Segment continues to deliver predictable returns with the exception of our Canadian biodiesel asset. Although the U.S. EPA released in June proposed biomass based diesel volumes within our expectations, the industry and our Canadian plant continue to operate in the red before the tax credit is considered. Rendac, our disposal rendering business, and Ecoson, our biophosphate operation producing green energy, delivered steady performances quarter over quarter."
Stuewe added, "Our Diamond Green Diesel Joint Venture continued its strong operational performance in the second quarter of 2015 shipping over 44 million gallons of renewable diesel. We remain optimistic that the U.S. Biofuels Tax Extenders package will be reinstated and will retroactively add approximately $25 million to income in the second quarter.
"Globally, we remain focused on debt reduction, working capital improvement and cost reductions to improve shareholder value. We very much believe in our strategy and the long term positioning of our global platform of creating sustainable ingredients for a growing population," concluded Stuewe.
Darling’s board has authorized a share repurchase program for up to $100 million depending on market conditions. The repurchases may be made from time to time on the open market at prevailing market prices or in negotiated transactions off the market. Repurchases may occur over the next 24 months, unless extended or shortened by the Board of Directors, Stuewe said.
For the second quarter of 2015, the company reported net sales of $859.3 million, as compared with net sales of $1,031.3 million for the second quarter of 2014. The $172.0 million decrease in net sales is primarily attributable to lower finished product prices, primarily in the global fat markets, and by $113.9 million for the foreign exchange rate impact of a weak euro and Canadian dollar. Overall, global raw material volumes were stronger year over year.
Net income attributable to Darling for the three months ended July 4, 2015, was $3.1 million, or $0.02 per diluted share, compared to a net income of $32.8 million, or $0.20 per diluted share, in the three months ended June 28, 2014.