- Earnings call transcript Q3 2022

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Operator

Good morning, and welcome to the Darling Ingredients Inc. Conference Call to discuss the company's Third Quarter 2022 Results. After the speakers' prepared remarks, there will be a question-and-answer period, and instructions to ask a question will be given at that time. Today's call is being recorded. I would now like to turn the call over to Ms. Guthrie. Suann ahead. go Please

Suann Guthrie

thank Earnings joining Call. and Third Darling Quarter XXXX you morning the for Ingredients Good

our Phillips, and Mr. Here presentation a C. and Renewables Chief page Brad and Stuewe, Investors me Ms. available Chairman Financial Presentations with today Vice the corporate Operations. under and on Executive are Sandra Dudley, US website. Officer; the President Strategy Specialty Bullock, slide Chief John Mr. on Executive Randall Chief Events Officer; Officer; of Mr. is There

During future factors press making uncertainties. Exchange predictions, and this are the reported this not discussed Risk We current forward-looking yesterday's XX-K, release, statements, the and projections, our or and that we during will of other undertake risks XX-Q duty call, statements. be section statements update Actual and call, on which Securities Commission. results made other Factors the comments events. any conference of forward-looking based assumptions to filings are statements to are could and about do any materially with expectations Form subject because These and in differ,

will I call Randy. over Now, to

Randall Stuewe

reported our FASA financial Proteins of the quarter our Thanks, our of and saw everybody, particularly more for I transparency several are I Board cannot with into strong third to as hard the entrepreneurship see new the visit in our and ingenuity, Op In it's and business. took came who for Darling facility XX,XXX and remarkable. Proteins Beeck, employees from and Ingredients spring. last XXXX those facilities so our of the than more employees, new proud dedication, the Valley family, to A Darling new of results. able us few I'm pride was quarter ago, was from a that Ingredients to earnings Darling facility at Beeck August, work weeks globe. joining integrate Suann. Directors proud our de they the from new our de firsthand to Group. green third This employees was call. by us I I our thanks morning, Belgium, be Good Valley new created the around energy I truly Op the acquisition. acquired we commitment

and While many together. have Brazil, begins see in I chance efficient, more from had not a absolutely ESG new with at of we can world. yet US they as who Europe across my employees, role team The I amount energy as better the environment company their hard tremendous made our of factories I are safer, the the how in an our for our success for this to are our to and company I profitable. summer, ultimately Group the our saw constantly our our to now way ways businesses more I looking of understands our working say know make bring employees our FASA personally plants evolving people,

one-time a Extremely the energy translations Europe, FASA and currency third from acquisition hot quarter. base foreign America, weather our North prices step-up this inventory Now, escalating turning in in earnings charge quarter. to the impacted

Feed in $XXX.X. Our The at million EBITDA. $XXX.X ended business the Ingredients Global segment quarter at Ingredients in came

from third segment million had in segment fuel Our Specialty million coming our posting $XXX.X And $XXX.X Food Diamond earned quarter Ingredients another Diesel. with Green quarter $XX.X the million EBITDA. record for

not quality had made sold these ready and North Ingredients be raw and up and material material in accept, Feed segment. with Globally, a regional droughts year-to-date. processing to be quarter-over-quarter volumes XX.X% grade the America. difficult, the to fats discounted and were fats challenge Summer Turning results to heat were lower raw XX.X% DGD to

quarter. and European and However, demand domestic the North American third export was in for both proteins exceptional

the quarter. see to Energy renewable export fourth than Container Europe demand and improve diesel in to costs our improved in continue continues to continue for doubling feedstock the in continue more expected be to and intensity grow. quarter for strong challenging availability for fats, European low Brazilian third demand carbon as is We to year-over-year.

material and quarter. of to Protein raw made have during we've procurement struggled facility However, XX% going now adjustments into costs recovered quarter. these fourth XX% Valley the

purchase these Ultimately, bridge Western take making agreement is Miropasz have we margin XXX,XXX to we our three Southeast are a rendering variance the mode renewable definitive Summer will in bolt-on approximately a bit the into discussed, building Polish and and nice to grow. is standard, company, fat as displays commitment brutal. but million. low announced to step As this global rendering up, employees. feedstocks a continues of plants Valley Feed quarter. for intensity €XXX existing discounts, around Miropasz plants has diesel entered openly The around that our inventory the us run-to-fail as annually and bringing Group, low-carbon acquisition XXX three a segment, Poland progress and poultry we of facilities November from converting in in FASA time. tons plant, our large metric up process Poland we demand for supply carbon to will provide Proteins towards animal was On Central through we global into the our going fourth behind it of all price foreign X, was exchange

another record Ingredients had Our quarter Food earning Specialty in $XX.X million segment EBITDA.

mix and Our gelatin collagen margin helped shift EBITDA from drive continued product improvements. to peptides,

future growth our very in about business. encouraged are We Food Ingredients the

peptides collagen five years. in the expect next We the to double market

We collagen have early XXXX. capacity additional in online coming

in we see the a of with billion our the collagen are shares deck, products Brazil, the growing a of business around capacity we space. increase On a the If in entered USA Indiana tons has in a our XX,XXX into Gelnex October Paraguay in to agreement Brazil, is four six to South XX, in that for will metric of we that in leading the grass-fed approximately operate completed, products. all America. cash. why continents peptide collagen announced gelatin Gelnex, in story of the one the acquire global Headquartered you will and $X.X the global reference in state-of-the-art our Ingredients capacity for facilities, peptide world. likely customers and producer bovine and in the first production definitive around acquisition quarter collagen of this four with most one you our tells slide is chart XX Food produce facilities segment very XXXX, Portage performance in When Darling collagen in on Gelnex will well-run earnings

of our convert our Fuel to segment. -- to our Green facility fall with newest for green Rendac, XX, waste In full Jajang from a which optibet volumes summer biogas brand trader this Darling our plans waste into additional are Energy of Netherlands waste moving closed business organic plants its European Now expansion the strategic energy. recycling, and in collects we saw We energy food October stock in now acquisition collector and and it in strong Belgium. feedstock provides the the Ingredients Netherlands. based underway. at On animal acquisition This

average XXXX, help believe business million and Europe -- diesel at is will EBITDA. Our recorded it XXXX gallons energy joint In the quarter of EBITDA. Green of gallon $X.XX green of and in green returns per to Diesel $X.XX sold gallons in third superior assets. XXX renewable the planned provide and Europe our renewable sorry, in European diversify and delivering venture Diamond sold we in energy diesel Diamond as XXX.X Year-to-date continue million Green has

a mid-November Now, Diamond to with unit catalyst Diesel be we've in capacity at thereafter. The in expect X the Arthur we begun online was to shortly commissioning ramp and Green Texas. Port loaded up

the gallons renewable Diesel part approximately the For the full full for diesel and X, of are Diamond year, $X.XX million of year. sold estimating are we at X EBITDA be to XXX forecasting and X final Green

outlook I'd Brad? turn us it for I'll and basics to Brad talk that, back on to about with financials Now XXXX like beyond. and to come over the and through take our

Brad Phillips

previously compared Thanks, third the were as third for for diluted quarter-over-quarter a $XX million our quarter quarter XXXX $XX.X for billion in primarily announced In XXXX, of Valley per share in of FASA quarter. compared XXXX a margin million acquisitions increase Proteins third $XXX of Operating the FASA Gelnex to sales or totaled third to from the increase million costs, the $X.XX of million in and and gross XXXX acquisition. million share, acquisitions. primarily $X.XX $X.X million quarter net Net the of million Diamond acquisition diluted due XX.X% $X.XX or [ph], the integration per increased depreciation $X.XX Randy. Green the due $XXX.X increase amortization to billion and of and income as for in the incurred as well to increased and million business or SG&A the for the we XXXX income XXXX, $XX.X third third Global Proteins increased quarter net a related share quarter $XXX.X to Diesel of earnings. our $XX.X to sales. and third for income Rotebek compared million XXXX to pending Darling's quarter XX.X% $XXX.X Net Ingredients Valley

euro $X.XX. for quarter assumption US XXXX. $XX.X of the average XXXX, the the compared $X.XX against approximately using of exchange the QX currency The million, third QX negative compared QX, rates as During the average was of weakened to to as XXXX third impact of XXXX, rate of dollar foreign quarter in an

an exchange approximately of ended For third primarily quarter to of rate the average quarter negative Interest $X.XX for to the debt. the months impact million to increased $XX.X in compared of currency average October XXXX. third million nine an months XXXX, ended X, rate as $XX.X October due nine the using increased X, of XXXX, expense XXXX, $X.XX foreign the was compared

fire rendering charge a We due million Tacoma also $X.X facility. at our a to incurred

$XX.X is of income mix the due XXXX. incentives earnings three different tax among with relative Now, tax federal The statutory which and the jurisdictions the company effective XX% October primarily The XX.X%, to X, income million of rate turning taxes. rates. expense biofuel tax rate of recorded for months differs tax ended to from

For also of October XX.X%. of taxes income the as ended XXXX, the income tax nine expense third million quarter. paid million company $XX.X of an recorded the effective rate company the of and X, $XXX.X end of tax months The

XXXX, into Inflation tax material taxes a our expect XXXX, tax currently the We year. not on with paid or million of to book new net deferred have On climate effective a For August stock our on immediate this signed the includes future The XX, Blender minimum tax of buybacks upon provisions. to XX, new do been the excise we Act two for credit, on refundable alternative initiatives, After tax periods income incentives XX% tax an X% have are a minimum IRA full and/or for energy XXXX, years Reduction extended based rate assets. clean production among income remainder tax through through be Biden from financial cash stock projecting provision approximately results. the law effective which buybacks President tax XX% to of year, after book credit, impact and December tax The and XXXX. excess credits, which a provisions XXXX, XXXX, credits, of generally income, tax of impact excise no nonrefundable tax are becomes other $XX XXXX tax fuels effective the XX, are XXXX. and December

are could after-tax our incentives future our materially or We these impact assessing and in tax amounts which years. tax pre-tax rates change

the guidance as We IRA more and applicability the will to of evaluate continue issued. is effect

end to debt. $X.XX debt compared the of billion end third the outstanding billion XXXX was $X.XX to the quarter turning company's The at total second quarter. at as the of Now

covenant in the quarter FASA was the the Group. Our primarily increase third a times. bank debt of The in ratio of quarter X.XX acquisition the at result leverage ended

on term third of as to be continue dividend to company the our venture loans Diamond received strong a revolving to expenditures common year-to-date X. joint million. repurchased Green shares to two for approximately drawn XXX,XXX quarter, credit October $XXX.X quarter maintain million third billion and completed $X.XX million quarter, the Capital Diesel approval. quarter $XXX.X facility complete cash shares year-to-date. upon liquidity third in total its also $XX.X the totaled during regulatory the $XXX.X the during brought available with We repurchased The million are intended end delayed quarter. the We for $XX.X purchase which from the third stock We million of which Gelnex draw million $X.XX during

over X% previously due I'll million million to the as Additionally, With we XXXX it the senior $XXX additional same X% with Randy. notes notes. terms issued senior that, $XXX of you, turn issued

Randall Stuewe

sustainable animal absorbed ingredients one our Thanks, Brad. the to Fat material integrated made ramp up. prices our carbon world. diesel Today, Protein investments to to adjusted $X.X its XXXX. while X.X XXX byproducts only year, the growth like being a Global Collagen food enable into DGDX continues be momentum and around three into the value set We in strengthen to to through reaffirm vertically final be to volumes continue the the adjusted in combined slaughtered of achieve Higher turning in the Throughout carries we in deliver of solutions specialty billion year world. green energy businesses, one forecast into to world of peptide Specialty We'd XXXX. the the business waste animals accretive robust. were portfolio ingredients through of year. strategic and diversified that we Ingredients are decarbonization a $X.XX remain pricing of growing long-term delivering globe another by billion renewable our for prices world. begins demand grow. segments Darling The our feed demand all to power acquisitions renewable their and Darling for. to continued reflect feed helping while EBITDA months Ingredients is all solid. record will and processed every continues to have our energy mover sustainable factories producers full around Raw and the are of is and diesel population the also market goals. in first one tremendous

of inputs our XXXX Green solid. Energy Demand we showing slowing Ingredients Global for ingredients our down Now, are and Specialty any rock platform. not into and remains signs in

X.X will new and our ready of become next the diesel over gallons The facilities integrating year. visible more XXXX. in results acquisitions deliver portfolio busy of DGD billion are renewable to, We

Our record team collagen is another growing our peptide year XXXX. and and business deliver expanding, poised is in to

that, and So open ahead to with go questions. it up let's

Operator

We Sachs. from will The session. Goldman [Operator now Adam Samuelson comes first of go Instructions] question ahead. begin the Please question-and-answer

Adam Samuelson

morning, Yes, everyone. thanks. Good

Randall Stuewe

morning, Adam. Good

Adam Samuelson

of start Good in segment the morning. Feed kind to quarter the the that and understood Randy, of I make drivers we was just hoping in sure decline.

around about quarter of operating some constructive I FASA And kind -- quarter-on-quarter. commodity of But get to have cleared the and just key kind Valley the Currency. over color And gave here million was you and alluded that be of You was as hoping of maybe in much down apart of profit down little was we think into a segment terms forward as the factors kind break it. EBITDA could some you of system go should those out we prices? fourth and of given how more the environment $XX

Randall Stuewe

that I Feed with after fully Yeah. is for No. Feed in everybody understand about challenge a the At really to the QX $XX.X Fair segment day trying segment talked of a million the enough, of the The star of way QX. the to and years. standard the I've through of This as And Adam. us a bit number I rock the being, of performance you reconcile a it that the with give one in our volume as FASA or around heat. Feed I'll here. bad segment impact it of of always FX go accounting. revenue XX euro on seen say bit shape. of had know, world end don't the because little is et cetera would was $X.XX. year Brad in the input XX% at kind my purchase you XX% summer

care the in not $X a well was with was taken of Rick that as shape $X give your the we way It And get as and operating of. transition. markets up it this And raw process for that through for I Valley of hats that of out part and it I team in a hot be plants. unable poultry and and say you Valley becoming Royal was told a really was pay to fall amount plants Those think put material you in it never the set processed raw -- being business plants flowed weather problems do for the for won't to P&L material, different we've in the people through was the the it or operations got happened are incredibly plant there -- I this those hit us. we let's I different seen it when of number, at as don't that stock we're Elrod made as in very XX producers, to to excessive there open And was when summer you summer form. of challenging, want Proteins significant about that were the I as business. summer of to one and family. It and know off really rebuilding the close look significant amounts the also what Midwest Midwest million but in team money. $X.X us, million then, but credit and XXX-degree period Winter can't And

referenced difficult we products we in to script from -- the to summer perishable degrade As separate heat, talked when very get protein. in about it's the the Adam, fat the

So it And in was good. by fatty fats. DGDX yet the way as really you to has fat in leave higher position content. the take acid your those fat aren't not And yields more oh free

done what have so be discounted can feed been. different XX could corn ago didn't market should markets move you they than to value years to other do diesel renewable have And and equivalent substantially and to had we their them the that a from we've to and

great we XXXX. I that's see with back momentum the period said I've think and not anything for we'll everybody here. coming really done around want glossing pick the in So up and with behind online. The but weather's the leave us. results year XX for changing in seen everybody cooled I over, balance I job want are leave a plants to off The don't we of there and Valley and the as has team to

Valley next really business, CapEx in in type focus well any I of to sure working little aggressive forward contributor and and stepped that's And tell we'll And as everything step efficiency material strong around core XXXX. and out make this forward the there. really really geared look ingredients right our haven't for an at ball DGDX very got have there and – continued we've program you online, now Clearly, products. more guidance see is of crystal year. for there We at And thrown making those it. strength want then time the we a then come of they'll but our reliable. see fat we've reliability solid or giving be for world, pretty and We the we slowing then firsthand plants there demand pretty, see raw any the market as out is we

I as that hope can you? Adam, much color So answered I as give

Adam Samuelson

lines It's for so I really if follow-up then the ask those EBITDA And helpful. was full along reiterated. the a year could guidance

DGD your I million I think XXX if remarks, heard prepared gallons $X.XX. of

it share ingredients about core there's of the the in So core wouldn't $XXX XQ quarter. pressures in step-up And your business about into seem from the It summer think quarter. contribution like that Valley fourth third clearly, fourth and away. businesses go million in your some and big implied businesses rendering a we I which persist had talked quarter would purchase accounting, level EBITDA wouldn't the implies of the heat

of big that I'm to that make on thinking fourth about in sequential based is? sure all your the I EBITDA where guidance doesn't seem want kind just So quarter

Randall Stuewe

you for math are The C the and around always it team my is conservative. initial they middle know that stands do smiles because when

in backing mean But solid. So of the to here there. feels periods said this time, more it right yes we've at the two correct at I day, got think as go we I numbers the end through you're point but into

think over add DGDX I improved to will $X.XX anything QX year? that. much Sandy And for and want be you on the

Sandra Dudley

thing online here, I job solid I to and both then results so month. to excited origination, have sophisticate close will kudos to great we feedstock in well. We've get I terms We're have terms I is product about which don't DGDX that's amazing. continue really that as we on sales a this And team tremendous come think that of finished from organization DGD. that our to the our DGD it. of done is think And expanded our give in that. just online really

shot great a just team to that. So out DGD the on

Adam Samuelson

helpful. I’ll it Very pass Thanks. right. on. All

Operator

The go ahead. Stifel. next of question from Whitfield Derrick comes Please

Derrick Whitfield

good you segment. you home? costs? Thanks as Staying Also in by synergies do into Feed Could earnings the earnings with all. and you term understand the the potential morning, operations what comment see the of the potential compromised energy the you near power would with on be your on this transaction higher integrate Miropasz

Sandra Dudley

can you Derrick, repeat Hey, question? your

Derrick Whitfield

Absolutely.

in as near-term integrate segment. Feed see the power on operations? the Also potential you the what Miropasz could higher energy with be compromised earnings on comment that costs? the you do synergies transaction the their staying by So Miropasz potential own would with of you operations your understanding earnings into

Randall Stuewe

That on Yes I'll with here close take me back worked of the John who XXXX. transaction until stab a ask Bullock, and it. not a to will bit little I'll little the half transaction assist

think in the that Island want more down can we don't Union or European Benelux really by a Spain transaction. it in it's opportunity us out [indiscernible] as It – look Crack at more of portfolio. into And I spreads us you we've will the Poland disposal, as Poland. countries comes John, and out small the said animal Germany, we as It's [ph], in pressure to anything just under anything whether and important with Derrick. we both become [ph]. plant manure And and add? and thenLubian the that outside production on this Ostonese gives again So – the time have Orsan once step there's that predict [ph] forward,

John Bullock

hidden this the largely us that to last think margin or about to of many maintain answer, energy think costs adjust without world. we your And beyond company the margins impacting really a in kind is that's substantially energy how with to business reflect higher able many, line energy higher I the the fasted is, around of in tool our allows and bottom matter whether us mirror really whereas energy those of And higher prices. the fact our Darling is businesses costs the a Yeah, question impacted management business. allows company. of I matter manage story we The half use The involved of this we're deal the not higher Darling a our pause fact answer.

So we our positively rest as are same the of the organization.

Randall Stuewe

And think as John meat only raw not Europe. margins and mean clearly, are fairly seen adjust the able escalate and and prices. model relationship energy at given faster than good Poland able production And to But and prices the higher I we've material much in we Yeah. Derick, the energy for I the the to of day, other labor, our parts of says. business diesel remain manage end but our we're

Derrick Whitfield

speak guys in near- of prepared time spent And for opportunity kind the you quite as bit medium-term Europe you my the see and that guys noted Terrific. same that there, where outlook growth? business a well. had staying light I over and then energy you quarter you of prices the the greatest segment. shifting facing for the the to of that the could In remarks on we're recall fuel to follow-up over topic, as last in but on

Randall Stuewe

Energy Europe, Green about John. in Talk

John Bullock

John. is This Yeah.

organic business. lot is a this new of don't traditionally we one from been render. acquisitions, and to both opens allows key in three of the kind over with so that Europe that the gas not growth well last is And up this a in just So really green our the we waste embedded platforms X as plans material on the a perfectly natural for core years RED whole And our related platform activities. byproducts programs dynamically are still well coming as as is can It necessarily us another Board raw and that well stream tailored to It RED food have to of growing to that expand X us do two we've our as in pricing and example. are the stuff help with slaughter our meat business. but to

Darling edge what was growing in the we've this think really I about digestion both over for the now thought That it else of on We've Belgium this can we've model been cool before expanding a business there. proud everybody in that been and I'm platform leading come and where this. Europe. really, business because of being and in our the to Netherlands built business and tremendous we're do in relationship excited well

Derrick Whitfield

Thanks helpful. my taking for questions. That’s again

Operator

The Tom Please comes from JPMorgan. next question go ahead. Palmer of

Tom Palmer

Thanks morning. the Good questions. for

Just on the segment outlook. back wanted to circle Feed

contribute million expected previously to million indicated you FASA EBITDA works around which $XXX annually. had million to was about So Valley out million $X to $XX month. $XX XXXX, in per

outlook these we run to year want about do to just million the return appropriate? I So then Valley next quarter, fourth think EBITDA confirm, still businesses for when that rate? And is $XXX the

Randall Stuewe

was many I so say that words. Yeah, trying Randy. is this in Tom, to Yeah.

and your Those one-offs They're there I'll nine pick summer. mean, to the with during really So the will going back. both numbers period I several $XXX that say with business. million for we've $XXX yes before million We're and momentum. eight adjustments those And -- FASA in on Valley are rate there plant period out put were come Valley going EBITDA. the that was we're to making yeah, up that answers. acquisition

-- yeah, we're at numbers So real in period QX. run in the rate next for year. now are those And

Tom Palmer

internal the given in is earlier Great for to are the instituting the XXXX. Thank for wasn't discussed just there think I hit billion guidance, industry changes pricing I operating current you current range, that acquisitions guess I year, are or needed at $X.X we ask it that. business on the these to formal still that mean, then environment you a that reasonable EBITDA consideration? as improvements about to environment, think you wanted operations to for billion and hear. $X but maybe next I year. potential this just And in

Randall Stuewe

the take carrying Yes. I solid. we days at pretty in. We're not are carrying solid And core number momentum. we're $X.X Valley going you mean where a finish hard out yes where and if it's -- at the XX mean year, this to we're is what XX at you of momentum and days the business, I a business from not look get pretty XXXX, now FASA base today. billion we're pricing and to ingredient

$X.XX If -- year. you We on we'll board here dark on billion you we and -- the we've on to gallons, got X.X put $X.XX know want this average what depends DGD. capacity $X.XX averaged to on around your or

work then So with that. And have then got that that's to turnarounds the machine, $X.XX there to bigger you're okay, of better couple sitting billion. working going We've are through early, happen year and going capital. a next

I And look it X.X and can added were snapshotting if the day, today, put get and we would it X,XXX. at the you say sit out guess where there there. so that's we you of XXX yes, it mean end and at I you

Tom Palmer

Thank Okay. you.

Operator

next Montreal. comes from of of go Ken The question Please Bank Zaslow ahead.

Ken Zaslow

good Hi, morning, guys.

Randall Stuewe

Good morning.

Ken Zaslow

in way. Let question, different a a me ask

sequentially If have acquisitions, the would flat? you you would Feed didn't be the business --

Randall Stuewe

sequentially, okay we... could mean You

Ken Zaslow

in been the this slightly maybe There might to aligned. have that you have because be mean team The quarter. probably of that but mind for more would some slightly acquisitions sense would profitability Is down, changed my it I Feed largely that my flat, would not have said down? just just is seasonality, been the --

Randall Stuewe

Valley answer different really and way, it FASA just say, in contribute in us. to me Let and didn't a QX

Ken Zaslow

negative that quarter. have say, I'd the negative. that been sense -- a I guess they the what might But through they were

Brad Phillips

minimal. were they Together

Randall Stuewe

Minimal.

grease. currency downgrades you've is be and degradation really price the from got of much piece So fat yellow Ken, why say that's And there. I -- then then the we're to QX wouldn't to got that that trying happened the And better. the say, you've negative going the

Ken Zaslow

of case for base business alter still nothing that XXXX. for There's both cases this those one that the are I... business happened am -- that of those. And fair quarter, those intact would the for Is Okay. or or statement, both the for either case a

Randall Stuewe

know what that was you're when -- Absolutely. And run the mark-to-market an Valley, and difficult, Lots And there. reaffirm the mean summer hedges summertime down is it. doing in is the you to I challenge. end operational units. Valley some plants the FASA think alone, stuff unwinding been and We ready been let rendering to mean, one-off of just that we It's want have a changes still you made. day the wastewater of inventory aren't when at the overcome. have I with and in

So, make that's easier. temperatures behind it us, cooler

to got summer, program challenges of now plants fix those we that in had. capital we've So and between those position next many and a

And so would be. We're we God, yes, run it's is behind us. over. I We're rates. the And September where business thank at thought case the we at

Ken Zaslow

years? this variance life-changing the our of something lot a and model, business. discussing Is by kind Act. positive, space, or a pretty Can to next discussion has Inflation to neutral? CEOs Darling's your whose CEOs three of then two you of would slightly that's on one had says commentary this Reduction an change CEO reduction is out. there's inflation There the CEOs it a more of have us a other of again over variance Is in kind our view trying changer? game of this been figure Just it's is And how There like who is wide -- give evolution. in wide that

John Bullock

And the is will not federal hole is fuels, carbon stream Hands-down, recognizes seen renewable Act history us, Darling's It's that nothing. John. happened, is have what's perspective, say rewarding Inflation that now supportive because as really for fields. field. perfect legislation, as this low-carbon piece the the lower if the feed this we've waste you positioned guys fats, program of value Ken, from of most a are of we were into the So the now company. opposed integrated bar ever to producing feeding of is I in

Now does. it

Darling the years great. Getting piece supportive. were result fully five a We perspective, wonderful was so from was a of it And legislation.

appreciative that will very from that love I And We government direction. great. are you and the federal Darling's that went in tell phenomenal think We it's absolutely perspective, we program.

Randall Stuewe

don't work? comment the why how you Ken Brad, side that of all tax on could to

Brad Phillips

Yeah. Ken. Good morning,

XXXX. mean, as probably to an from we it credit it know earlier, So income credit after goes excise you tax I said tax an

also two changed the touched in producer's credit. but an terms years, the benefit that next P&L. excise tax standpoint, on nothing goes John of the So it to After from

going it So or your you bill against to tax your your that want put it's against liabilities tax way. if

of the or it John we going it's things your and an going of that's us cash really score I But referred, more bigger thing think internally to of dare I EPS get about already a really also is investor be standpoint I delay estimated of And there a that. But bit is CI payments. talk a of oriented we definitely one the -- company guess to with you you say tax from it offsetting the there's start beneficial more to more it more geared a -- as -- perspective think because going when quarterly was from addressed to really become down benefit. what which a other below an John bit the it's begin about, So line. just toward And is yeah. say

John Bullock

just to that United back have that a convert fuels the on to low-carbon the fats this. add this. States, to which we're is This in Obviously me the means of right the able waste be with in maximize Let tax top the credit. built unit producer’s benefit producing associated guys area we're

I As for piece the Darling legislation been down of of the hands Darling. history ever I've best in said

Ken Zaslow

soybean the what does on Okay. Life Green And you Diamond been is wrong, about impact that's you last And shifted changing seems oil. the is. does -- work? have guys Diesel, How business? have an use maybe do it shift. And think is decision can I'm on that to the on? but that based sounds My you How that? business like that question how it using much it like

Sandra Dudley

Yeah.

really take the Diamond we highest most feedstock, customers use And of is forward, they any That's our So the I think different a That's the so because going Green traditionally of typically waste we exact really et built are us feedstock. our give that. typically an scores, waste preferred primary give want we percentage always premise terms feedstock typically with to They're the cetera. what feedstock. user. and out CI of of and in don't value

there mean the things don't that soybean focus in oil use CI sometimes we doesn't what that. on. That adjust scores like oil after like we and market oil run soybean do markets so are you that's there for because And where that and to that soybean we say that are on occasion,

so we do. And

on we And We are use will are constantly a there use when we operational that that profit then align, soybean occasion when reasons soybean And stars oil oil. maximizer. happens the too.

So on startup that's process. of us an certain stage use a for important in to thing our

clarity, will on oil. waste run for waste some just the by on just far we again But focus occasion oil, So feedstocks. we soybean a we are

Randall Stuewe

that's then and you I I or probably animal goes guys But to and foodservice that. volume. whatever XX% there Nestle oil the discount from think time-to-time get we're mean high know fair Yeah. in And slow if if on can soybean bean I go the business Sandy. throws the out way got above $X.XX, oils, a waste or go And then are time-to-time either facility. fats operationally maximize trying move $X.XX arbitrage customers you've you sky that to

Ken Zaslow

Great. I appreciate as always guys.

Operator

session. question-and-answer our turn to Stuewe I over back closing concludes to for This conference would Randall like remarks. the

Randall Stuewe

talk that we'll to safe. you earnings today Thank time forward seeing upcoming you soon. hope on in to at I Thanks presentation the and everyone's and are guys. stay you. deck look the slide We events appreciate our listed

Operator

today's has conference for Thank now you The presentation. concluded. attending

You may disconnect. now

Darling Ingredients (DAR) 9 Nov 222022 Q3 Earnings call transcript