First Quarter 2024 Net income of $81.2 million, or $0.50 per GAAP diluted share Net sales of $1.4 billion Combined adjusted EBITDA of $280.1 million IRVING, Texas, April 25, 2024 /PRNewswire/ -- Darling Ingredients Inc. (NYSE:DAR) today reported net income of $81.2 million, or $0.50 per diluted share for first quarter of 2024, compared to net income of $185.8 million, or $1.14 per diluted share, for first quarter of 2023. The decrease in net income was primarily due to a sharp year-over-year decline in fat prices and lower earnings within Diamond Green Diesel (DGD). The company also reported net sales of $1.4 billion for the first quarter of 2024, compared with net sales of $1.8 billion for the same period a year ago, reflecting lower finished product pricing. "For several years, we have enjoyed tailwinds from a demand-driven global economy and strong global commodity and specialty ingredient prices. We are now adapting to the new reality of abundant global supplies. This is a cycle we have seen many times, and we are making the necessary adjustments in our procurement process and lowering our operating costs where feasible to gain back our margin leverage," said Randall C. Stuewe, Darling Ingredients Chairman and Chief Executive Officer. "Globally we are seeing very nice progress and improvement in April for our core specialty ingredient business, and DGD has finally worked through its higher-priced feedstock pipeline. We anticipate an improved performance for the rest of the year." Combined adjusted EBITDA for the first quarter 2024 was $280.1 million, including the impact of a $25 million out-of-period inventory adjustment in the Food segment, compared to $418.4 million for the same period in 2023. DGD sold 331.5 million gallons of renewable diesel for the first quarter 2024 at an average of $0.69 per gallon EBITDA, including a $21.6 million lower of cost-or-market valuation adjustment. Excluding the LCM valuation adjustment, DGD EBITDA per gallon would be $0.76. As of March 30, 2024, Darling Ingredients had $145.5 million in cash and cash equivalents, and $811.1 million available under its committed revolving credit agreement. Total debt outstanding as of March 30, 2024, was $4.5 billion. The projected leverage ratio as measured by the company's bank covenant was 3.71X as of March 30, 2024. Capital expenditures were $93.8 million for the first quarter 2024. Company guidance for fiscal year 2024 is $1.3 – 1.4 billion combined adjusted EBITDA. Segment Financial Tables (in thousands, unaudited) Feed Ingredients Food Ingredients Fuel Ingredients Corporate Total Three Months Ended March 30, 2024 Net sales $                   889,848 $                   391,282 $                  139,169 $                           - $               1,420,299 Cost of sales and operating expenses 705,769 298,145 112,752 - 1,116,666 Gross Margin 184,079 93,137 26,417 - 303,633 Loss (gain) on sale of assets 132 (294) (412) - (574) Selling, general and administrative expenses 77,138 31,744 8,745 21,516 139,143 Acquisition and integration costs - - - 4,054 4,054 Change in fair value of contingent consideration (25,249) - - - (25,249) Depreciation and amortization 87,569 28,868 8,667 2,405 127,509 Equity in net income of Diamond Green Diesel - - 78,419 - 78,419 Segment operating income/(loss) $                     44,489 $                     32,819 $                     87,836 $               (27,975) $                   137,169 Equity in net income of other unconsolidated subsidiaries 2,310 - - - 2,310 Segment income/(loss) $                     46,799 $                     32,819 $                     87,836 $               (27,975) $                   139,479 Segment EBITDA $                   106,809 $                     61,687 $                     18,084 $               (21,516) $                   165,064 DGD adjusted EBITDA (Darling's Share) - - 115,061 - 115,061 Combined adjusted EBITDA $                   106,809 $                     61,687 $                  133,145 $               (21,516) $                   280,125 Feed Ingredients Food Ingredients Fuel Ingredients Corporate Total Three Months Ended April 1, 2023 Net sales $               1,237,494 $                   396,392 $                  157,286 $                           - $               1,791,172 Cost of sales and operating expenses 950,072 290,115 126,786 - 1,366,973 Gross Margin 287,422 106,277 30,500 - 424,199 Loss (gain) on sale of assets (342) (21) 36 - (327) Selling, general and administrative expenses 74,691 33,122 6,192 21,461 135,466 Restructuring and asset impairment charges 92 4,432 - - 4,524 Acquisition and integration costs - - - 7,022 7,022 Depreciation and amortization 90,320 14,473 8,393 2,820 116,006 Equity in net income of Diamond Green Diesel - - 94,337 - 94,337 Segment operating income/(loss) $                   122,661 $                     54,271 $                  110,216 $               (31,303) $                   255,845 Equity in net income of other unconsolidated subsidiaries 120 - - - 120 Segment income/(loss) $                   122,781 $                     54,271 $                  110,216 $               (31,303) $                   255,965 Segment EBITDA $                   213,073 $                     73,176 $                     24,272 $               (21,461) $                   289,060 DGD adjusted EBITDA (Darling's Share) - - 129,323 - 129,323 Combined adjusted EBITDA $                   213,073 $                     73,176 $                  153,595 $               (21,461) $                   418,383 Segment EBITDA consists of segment income (loss), less equity in net income/loss from unconsolidated subsidiaries, less equity in net income of Diamond Green Diesel, plus depreciation and amortization, acquisition and integration costs, restructuring and asset impairment charges, change in fair value of contingent consideration, plus Darling's share of DGD Adjusted EBITDA. Consolidated Operating Results For the Three-Month Periods Ended March 30, 2024 and April 1, 2023 (in thousands, except per share data, unaudited) Three Months Ended $ Change March 30, April 1, Favorable 2024 2023 (Unfavorable) Net sales $         1,420,299 $         1,791,172 $           (370,873) Costs and expenses: Cost of sales and operating expenses 1,116,666 1,366,973