PR Newswire | Aug 5, 2020 04:06PM EDT

08/05 15:05 CDT

Darling Ingredients Inc. Reports Second Quarter 2020 Financial Results IRVING, Texas, Aug. 5, 2020

IRVING, Texas, Aug. 5, 2020 /PRNewswire/ -- Darling Ingredients Inc. (NYSE: DAR, "Darling") --

Second Quarter 2020

* Net income of $65.4 million, or $0.39 per GAAP diluted share * Net Sales of $848.7 million * Combined adjusted EBITDA of $195.2 million * Core business EBITDA of $126.1 million, $16 million better than Q1-2020; $24 million better than Q2-2019, excluding the $13.1 million gain on the sale of assets in Q2-2019 * Diamond Green Diesel ("DGD") earned $1.91 EBITDA per gallon on approximately 72 million gallons sold * In July, Darling received an $80 million distribution from DGD, total distributions received in 2020 is $205 million

Darling reported net sales of $848.7 million for the second quarter of 2020, as compared with net sales of $827.3 million for the same period a year ago. Net income attributable to Darling for the three months ended June 27, 2020 was $65.4 million, or $0.39 per diluted share, compared to a net income of $26.3 million, or $0.16 per diluted share, for the second quarter of 2019.

"We had another solid quarter of execution from our employees worldwide who delivered a strong second quarter financial performance, generating $195 million of combined adjusted EBITDA," said Randall C. Stuewe, Chairman and Chief Executive Officer of Darling Ingredients Inc. "Our core business navigated through a turbulent second quarter with our feed segment posting its best quarterly EBITDA of $85.2 million in over the last three years. We did benefit from over 40 million pounds of depopulated hog volumes through our processing locations during the quarter."

"Darling's diversification provides our global business platform earnings sustainability as demonstrated in the second quarter. Our DGD JV financial performance was impacted by the sharp decline in the energy sector as a result of the COVID pandemic, but still produced good results which were enhanced by a better performance in our feed segment. Excluding the gain on the sale of assets in the food segment from a year ago, this year's food segment performance was on par to 2019," added Stuewe.

"We did use the DGD distribution proceeds received in April to pay down our outstanding debt in the second quarter, lowering our leverage ratio to 2.39 as measured by our bank covenant. We remain diligent on our capital expenditures, investing approximately $123 million for the first six months of 2020. We continue to target a deferral of 15% to 20% in capital expenditures as the uncertainty surrounding COVID-19 persists," commented Stuewe.

The Darling Ingredients Board has approved replenishing the Company's previously announced share repurchase program back to $200 million of availability and have extended the term of the program for an additional two years to August 13, 2022, to be exercised 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 authorized period unless extended or shortened by the Board of Directors.

In accordance with the distribution policy at Diamond Green Diesel, Darling received an $80 million distribution from DGD in July 2020. Total distributions received in the first six months of 2020 total $205 million.

For the six months ended June 27, 2020, Darling reported net sales of $1.7 billion, as compared with net sales of $1.7 billion for the same period of 2019. Net Income attributable to Darling for the first six months of 2020 was $150.9 million, or $0.90 per diluted share, as compared to a net income of $44.3 million, or $0.26 per diluted share, for the first six months of 2019.

As of June 27, 2020, Darling had $76.2 million in cash and cash equivalents, and $939.7 million available under committed revolving credit agreements. Total debt outstanding at the end of the second quarter of 2020 was $1.6 billion.

Combined adjusted EBITDA was $195.2 million for the second quarter of 2020, compared to $159.4 million for the same period in 2019. On a year-to-date basis, combined adjusted EBITDA totaled $408.5 million for 2020, compared to $292.7 million on a year-to-date basis for 2019.

Segment Financial Tables (in thousands)

Three Months Feed Food FuelEnded June 27, Ingredients Ingredients Ingredients Corporate Total2020

Net Sales $ 503,690 $ 278,934 $ 66,049 $ - $ 848,673

Cost of salesand operating 367,902 220,159 44,286 - 632,347expenses

Gross Margin $ 135,788 $ 58,775 $ 21,763 $ - $ 216,326

Loss/(gain) on 76 (48) (1) - 27sale of assets

Selling,general and 50,484 22,564 3,953 13,192 90,193administrativeexpenses

Depreciationand 52,683 19,972 7,980 2,675 83,310amortization

Equity in netincome of - - 63,492 - 63,492Diamond GreenDiesel

Segmentoperating $ 32,545 $ 16,287 $ 73,323 $ (15,867) $ 106,288income/(loss)

Equity in netincome of $ 692 $ - $ - $ - $ 692unconsolidatedsubsidiaries

Segment Income $ 33,237 $ 16,287 $ 73,323 $ (15,867) $ 106,980/(loss)

Segment EBITDA $ 85,228 $ 36,259 $ 17,811 $ (13,192) $ 126,106

DGD adjustedEBITDA $ - $ - $ 69,108 $ - $ 69,108(Darling'sShare)

Combinedadjusted $ 85,228 $ 36,259 $ 86,919 $ (13,192) $ 195,214EBITDA

Three Months Feed Food FuelEnded June 29, Ingredients Ingredients Ingredients Corporate Total2019

Net Sales $ 487,447 $ 274,835 $ 65,042 $ - $ 827,324

Cost of salesand operating 376,955 214,444 53,317 - 644,716expenses

Gross Margin $ 110,492 $ 60,391 $ 11,725 $ - $ 182,608

Gain on sale (524) (13,379) (23) - (13,926)of assets

Selling,general and 46,465 23,431 425 10,696 81,017administrativeexpenses

Depreciationand 48,720 19,861 8,362 2,543 79,486amortization

Equity in netincome of - - 38,093 - 38,093Diamond GreenDiesel

Segmentoperating $ 15,831 $ 30,478 $ 41,054 $ (13,239) $ 74,124income/(loss)

Equity in netincome of $ 82 $ - $ - $ - $ 82unconsolidatedsubsidiaries

Segment income $ 15,913 $ 30,478 $ 41,054 $ (13,239) $ 74,206/(loss)

Segment EBITDA $ 64,551 $ 50,339 $ 11,323 $ (10,696) $ 115,517

DGD adjustedEBITDA $ - $ - $ 43,894 $ - $ 43,894(Darling'sShare)

Combinedadjusted $ 64,551 $ 50,339 $ 55,217 $ (10,696) $ 159,411EBITDA

Segment Financial Tables (in thousands) continued

Six Months Feed Food FuelEnded June 27, Ingredients Ingredients Ingredients Corporate Total2020

Net Sales $ 1,016,315 $ 549,228 $ 135,972 $ - $ 1,701,515

Cost of salesand operating 756,355 425,589 97,311 - 1,279,255expenses

Gross Margin $ 259,960 $ 123,639 $ 38,661 $ - $ 422,260

Loss/(gain) on 126 (46) 8 - 88sale of assets

Selling,general and 104,431 48,040 5,607 28,308 186,386administrativeexpenses

Depreciationand 106,204 40,277 16,072 5,428 167,981amortization

Equity in netincome of - - 161,312 - 161,312Diamond GreenDiesel

Segmentoperating $ 49,199 $ 35,368 $ 178,286 $ (33,736) $ 229,117income/(loss)

Equity in netincome of $ 1,561 $ - $ - $ - $ 1,561unconsolidatedsubsidiaries

Segment income $ 50,760 $ 35,368 $ 178,286 $ (33,736) $ 230,678/(loss)

Segment EBITDA $ 155,403 $ 75,645 $ 33,046 $ (28,308) $ 235,786

DGD adjustedEBITDA $ - $ - $ 172,742 $ - $ 172,742(Darling'sShare)

Combinedadjusted $ 155,403 $ 75,645 $ 205,788 $ (28,308) $ 408,528EBITDA

Six Months Feed Food FuelEnded June 29, Ingredients Ingredients Ingredients Corporate Total2019

Net Sales $ 983,266 $ 553,999 $ 125,163 $ - $ 1,662,428

Cost of salesand operating 763,814 428,448 103,367 - 1,295,629expenses

Gross Margin $ 219,452 $ 125,551 $ 21,796 $ - $ 366,799

Loss/(gain) on (4,914) (13,265) 3 - (18,176)sale of assets

Selling,general and 95,296 45,318 (329) 25,735 166,020administrativeexpenses

Depreciationand 98,089 39,372 16,160 5,029 158,650amortization

Equity in netincome of - - 62,370 - 62,370Diamond GreenDiesel

Segmentoperating $ 30,981 $ 54,126 $ 68,332 $ (30,764) $ 122,675income/(loss)

Equity in netloss of $ (422) $ - $ - $ - $ (422)unconsolidatedsubsidiaries

Segment income $ 30,559 $ 54,126 $ 68,332 $ (30,764) $ 122,253/(loss)

Segment EBITDA $ 129,070 $ 93,498 $ 22,122 $ (25,735) $ 218,955

DGD adjustedEBITDA $ - $ - $ 73,721 $ - 73,721(Darling'sShare)

Combinedadjusted $ 129,070 $ 93,498 $ 95,843 $ (25,735) $ 292,676EBITDA

Darling Ingredients Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

June 27, 2020 and December 28, 2019

(in thousands)

June 27, December 28,

2020 2019

ASSETS (unaudited)

Current assets:

Cash and cash equivalents $ 76,185 $ 72,935

Restricted cash 103 110

Accounts receivable, net 375,908 406,338

Inventories 394,708 362,957

Prepaid expenses 46,003 46,599

Income taxes refundable 3,752 3,317

Other current assets 34,392 25,032

Total current assets 931,051 917,288

Property, plant and equipment, net 1,773,329 1,802,411

Intangible assets, net 485,148 526,394

Goodwill 1,217,177 1,223,291

Investment in unconsolidated subsidiaries 729,094 689,354

Operating lease right-of-use assets 134,901 124,726

Other assets 41,651 47,400

Deferred income taxes 14,803 14,394

$ 5,327,154 $ 5,345,258

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Current portion of long-term debt $ 42,758 $ 90,996

Accounts payable, principally trade 197,528 239,252

Income taxes payable 16,474 8,895

Current operating lease liabilities 39,532 37,805

Accrued expenses 310,004 311,391

Total current liabilities 606,296 688,339

Long-term debt, net of current portion 1,553,118 1,558,429

Long-term operating lease liabilities 99,482 91,424

Other noncurrent liabilities 109,046 115,785

Deferred income taxes 260,858 247,931

Total liabilities 2,628,800 2,701,908

Commitments and contingencies

Total Darling's stockholders' equity 2,633,360 2,565,819

Noncontrolling interests 64,994 77,531

Total stockholders' equity $ 2,698,354 $ 2,643,350

$ 5,327,154 $ 5,345,258

Darling Ingredients Inc. and Subsidiaries

Consolidated Operating Results

For the Three-Month and Six-Month Periods Ended June 27, 2020 and June 29, 2019

(in thousands, except per share data)

(unaudited)

Three Months Ended Six Months Ended

$ Change $ Change

June 27, June 29, Favorable June 27, June 29, Favorable

2020 2019 (Unfavorable) 2020 2019 (Unfavorable)

Net sales $ 848,673 $ 827,324 $ 21,349 $ 1,701,515 $ 1,662,428 $ 39,087

Costs andexpenses:

Cost of sales and operating 632,347 644,716 12,369 1,279,255 1,295,629 16,374 expenses

Loss (gain) on 27 (13,926) (13,953) 88 (18,176) (18,264) sale of assets

Selling, general and 90,193 81,017 (9,176) 186,386 166,020 (20,366) administrative expenses

Depreciation and 83,310 79,486 (3,824) 167,981 158,650 (9,331) amortization

Total costs and 805,877 791,293 (14,584) 1,633,710 1,602,123 (31,587)expenses

Equity in net income of 63,492 38,093 25,399 161,312 62,370 98,942 Diamond Green Diesel

Operating 106,288 74,124 32,164 229,117 122,675 106,442income

Other expense:

Interest (17,920) (20,853) 2,933 (37,010) (40,729) 3,719 expense

Debt extinguishment - (12,126) 12,126 - (12,126) 12,126 costs

Foreign currency gain/ (1,134) (388) (746) 530 (1,120) 1,650 (loss)

Other income (1,485) (2,019) 534 (3,366) (4,544) 1,178 (expense), net

Total other (20,539) (35,386) 14,847 (39,846) (58,519) 18,673expense

Equity in netincome/(loss)

ofunconsolidated 692 82 610 1,561 (422) 1,983subsidiaries

Income before 86,441 38,820 47,621 190,832 63,734 127,098income taxes

Income tax 19,946 7,776 (12,170) 38,246 13,050 (25,196)expense

Net income 66,495 31,044 35,451 152,586 50,684 101,902

Net incomeattributable to

noncontrolling (1,056) (4,786) 3,730 (1,637) (6,414) 4,777 interests

Net incomeattributable to $ 65,439 $ 26,258 $ 39,181 $ 150,949 $ 44,270 $ 106,679Darling

Basic income $ 0.40 $ 0.16 $ 0.24 $ 0.93 $ 0.27 $ 0.66per share:

Diluted income $ 0.39 $ 0.16 $ 0.23 $ 0.90 $ 0.26 $ 0.64per share:

Number ofdiluted common 165,999 168,432 166,963 168,546shares:

Darling Ingredients Inc. and Subsidiaries

Consolidated Statement of Cash Flows

Periods Ended June 27, 2020 and June 29, 2019

(in thousands)

(unaudited)

Six Months Ended

June 27, June 29,

Cash flows from operating 2020 2019activities:

Net income $ 152,586 $ 50,684

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization 167,981 158,650

Loss/(gain) on disposal of property, plant, equipment and 88 (18,176) other assets

Gain on insurance proceeds from - (845) insurance settlement

Deferred taxes 13,998 (3,137)

Increase (decrease) in long-term (890) 1,010 pension liability

Stock-based compensation expense 15,566 14,182

Write-off deferred loan costs - 4,547

Deferred loan cost amortization 2,835 3,010

Equity in net income of Diamond Green Diesel and other (162,873) (61,948) unconsolidated subsidiaries

Distributions of earnings from Diamond Green Diesel and other 125,891 17,755 unconsolidated subsidiaries

Changes in operating assets and liabilities, net of effects from acquisitions:

Accounts receivable 26,077 27,218

Income taxes refundable/ 6,119 7,140 payable

Inventories and prepaid (35,413) (17,374) expenses

Accounts payable and accrued (33,375) (29,849) expenses

Other (14,941) 1,437

Net cash provided by operating 263,649 154,304 activities

Cash flows from investingactivities:

Capital expenditures (123,204) (167,871)

Acquisitions, net of cash acquired - (1,431)

Investment in unconsolidated - (1,000) subsidiary

Gross proceeds from disposal of property, plant and equipment and 1,053 9,814 other assets

Proceeds from insurance settlement - 845

Payments related to routes and (3,712) (3,150) other intangibles

Net cash used by investing (125,863) (162,793) activities

Cash flows from financingactivities:

Proceeds from long-term debt 16,164 507,722

Payments on long-term debt (18,239) (526,230)

Borrowings from revolving credit 375,971 273,485 facility

Payments on revolving credit (405,800) (266,884) facility

Net cash overdraft financing (26,461) 11,178

Deferred loan - (7,003) costs

Issuance of common stock 67 12

Repurchase of common stock (55,044) -

Minimum withholding taxes paid on (4,863) (3,193) stock awards

Acquisition of noncontrolling (8,784) - interest

Distributions to noncontrolling (987) - interests

Net cash used by financing (127,976) (10,913) activities

Effect of exchange rate changes on (6,567) (853)cash flows

Net increase/(decrease) in cash, 3,243 (20,255)cash equivalents and restricted cash

Cash, cash equivalents and 73,045 107,369restricted cash at beginning of year

Cash, cash equivalents and $ 76,288 $ 87,114restricted cash at end of period

Supplemental disclosure of cash flowinformation:

Accrued capital expenditures $ 23 $ (7,542)

Cash paid during the period for:

Interest, net of capitalized $ 35,070 $ 45,196 interest

Income taxes, net of refunds $ 18,030 $ 12,607

Non-cash operating activities:

Operating lease right of use obtained in exchange for new lease $ 28,801 $ 7,492 liabilities

Non-cash financing activities:

Debt issued for service contract $ 21 $ - assets

Diamond Green Diesel Joint Venture

Condensed Consolidated Balance Sheets

June 30, 2020 and December 31, 2019

(in thousands)

June 30, December 31,

2020 2019

Assets: (unaudited)

Total current assets $ 581,334 $ 668,026

Property, plant and equipment, net 894,415 713,489

Other assets 27,959 30,710

Total assets $ 1,503,708 $ 1,412,225

Liabilities and members' equity:

Total current portion of long term $ $ debt 495 341

Total other current liabilities 89,533 75,802

Total long term debt 8,969 8,742

Total other long term liabilities 4,023 4,422

Total members' equity 1,400,688 1,322,918

Total liabilities and members' $ 1,503,708 $ 1,412,225 equity

Diamond Green Diesel Joint Venture

Operating Financial Results

For the Three-Month and Six-Month Periods Ended June 30, 2020 and June 30, 2019

(in thousands)

(unaudited)

Three Months Ended Six Months Ended

$ Change $ Change

June 30, June 30, Favorable June 30, June 30, Favorable

Revenues: 2020 2019 (Unfavorable) 2020 2019 (Unfavorable)

Operating $ 295,826 $ 294,811 $ 1,015 $ 654,441 $ 597,529 $ 56,912 revenues

Expenses:

Total costs and expenses less

depreciation, amortization 157,611 207,024 49,413 308,958 450,087 141,129 and accretion expense

Depreciation, amortization 11,114 11,914 800 22,888 23,332 444 and

accretion expense

Total costs and 168,725 218,938 50,213 331,846 473,419 141,573expenses

Operating 127,101 75,873 51,228 322,595 124,110 198,485 income

Other income 200 634 (434) 661 1,275 (614)

Interest and debt expense, (317) (321) 4 (632) (645) 13 net

Net income $ 126,984 $ 76,186 $ 50,798 $ 322,624 $ 124,740 $ 197,884

Darling Ingredients Inc. reports Adjusted EBITDA results, which is a Non-GAAP financial measure, as a complement to results provided in accordance with generally accepted accounting principles (GAAP) (for additional information, see "Use of Non-GAAP Financial Measures" included later in this media release). The Company believes that Adjusted EBITDA provides additional useful information to investors. Adjusted EBITDA, as the Company uses the term, is calculated below:

Reconciliation of Net Income to (Non-GAAP) Adjusted EBITDA and (Non-GAAP) Proforma Adjusted EBITDA

For the Three-Month and Six-Month Periods Ended June 27, 2020 and June 29, 2019

Three Months Ended Six Months Ended

Adjusted June 27, June 29, June 27, June 29,EBITDA

(U.S. dollars 2020 2019 2020 2019in thousands)

Net incomeattributable to $ 65,439 $ 26,258 $ 150,949 $ 44,270Darling

Depreciationand 83,310 79,486 167,981 158,650amortization

Interest 17,920 20,853 37,010 40,729expense

Income tax 19,946 7,776 38,246 13,050expense

Foreigncurrency loss/ 1,134 388 (530) 1,120(gain)

Other expense, 1,485 2,019 3,366 4,544net

Debtextinguishment - 12,126 - 12,126costs

Equity in net(income) of (63,492) (38,093) (161,312) (62,370)Diamond GreenDiesel

Equity in net(income)/lossof (692) (82) (1,561) 422unconsolidatedsubsidiaries

Net incomeattributable to 1,056 4,786 1,637 6,414noncontrollinginterests

AdjustedEBITDA $ 126,106 $ 115,517 $ 235,786 $ 218,955(Non-GAAP)

Foreigncurrency 1,951 (1) - 4,109 (2) -exchangeimpact

Pro formaAdjusted EBITDAto Foreign $ 128,057 $ 115,517 $ 239,895 $ 218,955Currency(Non-GAAP)

DGD JointVentureAdjusted EBITDA $ 69,108 $ 43,894 $ 172,742 $ 73,721(Darling'sShare)

Darling plusDarling's shareof DGD Joint $ 195,214 $ 159,411 $ 408,528 $ 292,676VentureAdjustedEBITDA

(1) The average rate assumption used in this calculation was the actual fiscalaverage rate for the three months ended June 27, 2020 of (eu)1.00:USD$1.10 andCAD$1.00:USD$0.72, as compared to the average rate for the three months endedJune 29, 2019 of (eu)1.00:USD$1.12 and CAD$1.00:USD$0.75, respectively.

(2) The average rate assumption used in this calculation was the actual fiscalaverage rate for the six months ended June 27, 2020 of (eu)1.00:USD$1.10 andCAD$1.00:USD$0.73, as compared to the average rate for the six months endedJune 29, 2019 of (eu)1.00:USD$1.13 and CAD$1.00:USD$0.75, respectively.

For the three and six months ended June 29, 2019, Adjusted EBITDA included a gain on the sale of assets of approximately $13.1 million.

About Darling

Darling Ingredients Inc. is a global developer and producer of sustainable natural ingredients from edible and inedible bio-nutrients, creating a wide range of ingredients and specialty solutions for customers in the pharmaceutical, food, pet food, feed, technical, fuel, bioenergy, and fertilizer industries. With operations on five continents, the Company collects and transforms all aspects of animal by-product streams into useable and specialty ingredients, such as collagen, edible fats, feed-grade fats, animal proteins and meals, plasma, pet food ingredients, organic fertilizers, yellow grease, fuel feedstocks, green energy, natural casings and hides. The Company also recovers and converts recycled oils (used cooking oil and animal fats) into valuable feed and fuel ingredients and collects and processes residual bakery products into feed ingredients. In addition, the Company provides environmental services, such as grease trap collection and disposal services to food service establishments. The Company sells its products domestically and internationally and operates within three industry segments: Feed Ingredients, Food Ingredients and Fuel Ingredients. For additional information, visit the Company's website at http://www.darlingii.com.

Darling Ingredients Inc. will host a conference call to discuss the Company's second quarter 2020 financial results at 9:00 am Eastern Time (8:00 am Central Time) on Thursday, August 6, 2020. To listen to the conference call, participants calling from within North America should dial 1-844-868-8847; international participants should dial 1-412-317-6593. Please refer to access code 10146331. Please call approximately ten minutes before the start of the call to ensure that you are connected.

The call will also be available as a live audio webcast that can be accessed on the Company website at http://ir.darlingii.com. Beginning one hour after its completion, a replay of the call can be accessed through August 13, 2020, by dialing 1-877-344-7529 (U.S. callers), 1-855-669-9658 (Canada) and 1-412-317-0088 (international callers). The access code for the replay is 10146331. The conference call will also be archived on the Company's website.

Use of Non-GAAP Financial Measures:

Adjusted EBITDA is not a recognized accounting measurement under GAAP; it should not be considered as an alternative to net income, as a measure of operating results, or as an alternative to cash flow as a measure of liquidity and is not intended to be a presentation in accordance with GAAP. Adjusted EBITDA is presented here not as an alternative to net income, but rather as a measure of the Company's operating performance. Since EBITDA (generally, net income plus interest expenses, taxes, depreciation and amortization) is not calculated identically by all companies, this presentation may not be comparable to EBITDA or Adjusted EBITDA presentations disclosed by other companies. Adjusted EBITDA is calculated in this presentation and represents, for any relevant period, net income/(loss) plus depreciation and amortization, goodwill and long-lived asset impairment, interest expense, (income)/loss from discontinued operations, net of tax, income tax provision, other income/(expense) and equity in net loss of unconsolidated subsidiary. Management believes that Adjusted EBITDA is useful in evaluating the Company's operating performance compared to that of other companies in its industry because the calculation of Adjusted EBITDA generally eliminates the effects of financing, income taxes and certain non-cash and other items that may vary for different companies for reasons unrelated to overall operating performance.

As a result, the Company's management uses Adjusted EBITDA as a measure to evaluate performance and for other discretionary purposes. In addition to the foregoing, management also uses or will use Adjusted EBITDA to measure compliance with certain financial covenants under the Company's Senior Secured Credit Facilities and 5.25% Notes and 3.625% Notes that were outstanding at June 27, 2020. However, the amounts shown in this presentation for Adjusted EBITDA differ from the amounts calculated under similarly titled definitions in the Company's Senior Secured Credit Facilities and 5.25% Notes and 3.625% Notes, as those definitions permit further adjustments to reflect certain other non-recurring costs, non-cash charges and cash dividends from the DGD Joint Venture. Additionally, the Company evaluates the impact of foreign exchange impact on operating cash flow, which is defined as segment operating income (loss) plus depreciation and amortization.

Cautionary Statements Regarding Forward-Looking Information:

{This media release contains "forward-looking" statements regarding the business operations and prospects of Darling Ingredients Inc. and industry factors affecting it. These statements are identified by words such as "believe," "anticipate," "expect," "estimate," "intend," "could," "may," "will," "should," "planned," "potential," "continue," "momentum," and other words referring to events that may occur in the future. These statements reflect Darling Ingredient's current view of future events and are based on its assessment of, and are subject to, a variety of risks and uncertainties beyond its control, each of which could cause actual results to differ materially from those indicated in the forward-looking statements. These factors include, among others, existing and unknown future limitations on the ability of the Company's direct and indirect subsidiaries to make their cash flow available to the Company for payments on the Company's indebtedness or other purposes; global demands for bio-fuels and grain and oilseed commodities, which have exhibited volatility, and can impact the cost of feed for cattle, hogs and poultry, thus affecting available rendering feedstock and selling prices for the Company's products; reductions in raw material volumes available to the Company due to weak margins in the meat production industry as a result of higher feed costs, reduced consumer demand or other factors, reduced volume from food service establishments, or otherwise; reduced demand for animal feed; reduced finished product prices, including a decline in fat and used cooking oil finished product prices; changes to worldwide government policies relating to renewable fuels and greenhouse gas("GHG") emissions that adversely affect programs like the U.S. government's renewable fuel standard, low carbon fuel standards ("LCFS") and tax credits for biofuels both in the United States and abroad; possible product recall resulting from developments relating to the discovery of unauthorized adulterations to food or food additives; the occurrence of 2009 H1N1 flu (initially known as "Swine Flu"), Highly pathogenic strains of avian influenza (collectively known as "Bird Flu"), severe acute respiratory syndrome ("SARS"), bovine spongiform encephalopathy (or "BSE"), porcine epidemic diarrhea ("PED") or other diseases associated with animal origin in the United States or elsewhere, such as the outbreak of African Swine Fever ("ASF") in China and elsewhere; the occurrence of pandemics, epidemics or disease outbreaks, such as the current COVID-19 outbreak; unanticipated costs and/or reductions in raw material volumes related to the Company's compliance with the existing or unforeseen new U.S. or foreign (including, without limitation, China) regulations (including new or modified animal feed, Bird Flu, SARS, PED, BSE, ASF or similar or unanticipated regulations) affecting the industries in which the Company operates or its value added products; risks associated with the DGD Joint Venture, including possible unanticipated operating disruptions and issues relating to the announced expansion project; risks and uncertainties relating to international sales and operations, including imposition of tariffs, quotas, trade barriers and other trade protections imposed by foreign countries; difficulties or a significant disruption in our information systems or failure to implement new systems and software successfully, risks relating to possible third party claims of intellectual property infringement; increased contributions to the Company's pension and benefit plans, including multiemployer and employer-sponsored defined benefit pension plans as required by legislation, regulation or other applicable U.S. or foreign law or resulting from a U.S. mass withdrawal event; bad debt write-offs; loss of or failure to obtain necessary permits and registrations; continued or escalated conflict in the Middle East, North Korea, Ukraine or elsewhere; uncertainty regarding the exit of the U.K. from the European Union; and/or unfavorable export or import markets. These factors, coupled with volatile prices for natural gas and diesel fuel, climate conditions, currency exchange fluctuations, general performance of the U.S. and global economies, disturbances in world financial, credit, commodities and stock markets, and any decline in consumer confidence and discretionary spending, including the inability of consumers and companies to obtain credit due to lack of liquidity in the financial markets, among others, could cause actual results to vary materially from the forward looking statements included in this release or negatively impact the Company's results of operations. Among other things, future profitability may be affected by the Company's ability to grow its business, which faces competition from companies that may have substantially greater resources than the Company. The Company's announced share repurchase program may be suspended or discontinued at any time and purchases of shares under the program are subject to market conditions and other factors, which are likely to change from time to time. Other risks and uncertainties regarding Darling Ingredients Inc., its business and the industries in which it operates are referenced from time to time in the Company's filings with the Securities and Exchange Commission. Darling Ingredients Inc. is under no obligation to (and expressly disclaims any such obligation to) update or alter its forward-looking statements whether as a result of new information, future events or otherwise.}

For More Information, contact:

Jim Stark, Vice President, Investor Relations Email : james.stark@darlingii.com

5601 MacArthur Blvd., Irving, Texas 75038 Phone : 972-281-4823

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SOURCE Darling Ingredients Inc.