DAR - Earnings call transcript Q4 2024 | Darling Ingredients Inc.

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Operator

Good morning, and welcome to the Darling Ingredients Inc. conference call to discuss the company's Fourth Quarter 2024 and Fiscal Year 2024 Financial Results. [Operator Instructions] Today's call is being recorded. I would now like to turn the call over to Ms. Suann Guthrie. ahead. go Please

Suann Guthrie

joining Fiscal for Ingredients Quarter Fourth Thank XXXX the Earnings and Year Call. XXXX you Darling

Here with of Chief me and today Jansen, Chief are Mr. Randall Mr. and Officer; Bob our Matt Brad Financial Mr. Officer; Chief Operating C. Mr. Phillips, America. Officer; retiring Officer Financial Chief Day, new North Executive Stuewe, Chairman

joined Investor fourth by available. and presentation are slide quarter release news and website this of XXXX Our transcript corporate on a and page the call earnings will is our fiscal be year XXXX it of available once

this in XX-Q release forward-looking statements Factors predictions, During Actual call, statements factors filings other expectations the which we events. and subject future materially that and making will made are other conference uncertainties. XX-K, of statements, Risk to Securities in or assumptions Exchange during the could differ Form on and and because current be today's and results our press projections this call These Commission. based reported are and about of discussed are section comments risks

any to We undertake duty not update statements. any do forward-looking

I the will to over Now call Randy. hand

Randall Stuewe

and Good our quarter earnings us and joining Thanks, morning, fourth XXXX thanks call. fiscal for year Suann. XXXX everyone, for

will be the As is Ingredients. Day After incredible CFO this filed of retiring previously the position. at Phillips assume announced, years Brad will Bob month, XX-K XX after at Darling the end

on want that for I these for to truly As you. of call I this many I Brad you, done and I numerous of Brad's room in with this and thank memories will have call, be calls are service. Brad and everyone speak as the will earnings last we miss years his think The many

Stay life, my to proceed chapter As family. to wishes you next you friend. and your congratulations and healthy, your best the

and DAR that will be chapter the exciting role. but Bob history, dearly it's missed, into for welcome we of time next You Day

strongest quarter delivered of the of and years history. XXXX and Darling X top the the to its turning in year. XXX-year Now year its Ingredients quarter its in

focused in control. incredibly we $XXX were leverage we margin markets reducing truly paid started ratio what the on management Green volatile, could to debt, Diamond largest global in under million sustainable $XXX.X effective financial up While our million we We and CapEx and unit down in stewardship, world successfully Through from aviation Diesel dividends budget of ahead received fuel X.XXx. the schedule. and

of Diamond for of the For quarter, its the gross excellence combined ownership noted a compared million fourth The Diesel. despite joint million, continued of lower the in Green adjusted cost company focus XXXX fourth in market in improvement quarter third quarter of was in lower our net XXXX the share which operational venture EBITDA release which press fat prices. to on our week's margin resulted $XXX.X or adjustment was $XX last

want we also record out team. frankly, significantly that global record to We an all-time delivered for point a safety improved global our

improving the Turning and arrived. segment. expected strong. rendering as remained clarity The volumes to Ingredients has regulatory is environment Global Feed and continued

tax production of monetizing from credit. U.S. have model, XX the we believe fuel we update on we what notice recent what the Department to and credit the With clean the and calculating need the begin Treasury agreed and

XX.X% quarter resulted smart a CapEx our focus our excellence been improving again, margin spread Once fats in to and gross in Ingredients deployment release, steadily and for Feed the We the in went operational provide noted press from waste third Darling improvement As XXXX. in nice have should in quarter. tailwind fourth XX.X% into on segment. nice management

I execution want global teams thank aggressive to bold our the operations deliver. and for they

a on fourth quarter fourth the industry is The XX.X% in quarter in resulted margin in saw conditions the gross a the third We to in third from the quarter in to improvement quarter. sales focus continuing XX.X% improved. in segment. Food our margins improvement to turning to nice company management, as compared which Now slight

natural Nextida, glucose and excited of now pipeline. more beginning of the our have to peptide sales is first accelerate. moderation have Our these and hit college several to products We're revolutionary this in the demand market

Okay.

Ingredients Turning to million Green received a dividend year. full the million our $XX.X quarter cash fuel 'XX Diamond in dividends of for and the $XXX.X segment. fiscal Diesel Darling from fourth cash of in

on we Subsequent another to and the continues XXXX. to million received continues outperform of of its the now January quarter in be producer. $XX.X have best-in-class peers cash dividend many to close, DGD metrics

reviewed for a fuels have provides in credit clean company's XX determining safe and auditors treatment We the aligned tax that the accounting thoroughly credit. harbor the clear third-party it are production guidance of with

realize a confident the book its we value. credit our are result, fully and to in As ability

While of feedstock positions there us logistical iron strategic and and product to regarding certification destination options value the credit. few range process out this feedstock and flexibility to are details by a to a capability locations, diverse of maximize well

turn over and to take financials, with Brad to us I'll back through some it XXXX. come thoughts then on my With that, to like Brad? I'd

Brad Phillips

to $XXX.X million fourth billion or fourth $XX.X $XXX.X value change charges, for income Randy. per offset and share Net substantially or lower quarter asset Thanks, and earnings amortization $X.XX operating quarter XXXX in million to XXXX to expense. prices, quarter fourth lower lower The which a the sales gross net Okay. SG&A, $XX.X compared $X.XX billion were significantly million decreased quarter income from to for of the lower from diluted for share lower DGD, favorable to diluted million per the due consideration by depreciation $XXX.X of as net of XXXX. higher the impairment was for a million totaled and fair and contingent the fourth primarily income fat margin of of of for fourth fourth Total quarter of compared XXXX. quarter $X.X XXXX compared for $X.X and the XXXX restructuring

related to decreased casualty property compared as losses. lower in due recoveries increased period million primarily Total to well same $XX.X expense expenses prior interest XXXX XXXX, fourth as as the the other quarter property insurance to in

For million diluted per income net $XXX.X XXXX, share compared income XXXX. per for $X.XX was fiscal diluted $X.XX million as or share or fiscal of to net year $XXX.X

and $X.X Net sales SG&A, XXXX. $X.X $XXX.X XXXX of XXXX the The gross decrease fiscal impairment of margin favorable a was billion fiscal income earnings lower to sales period Global million billion for restructuring asset million lower and for million for primarily compared of for $XXX.X in decreased offset to consideration. result year to compared year the from Operating fair of $XXX.X and by net lower somewhat same value charges Ingredients XXXX. change DGD contingent a in fiscal lower were

fiscal to XXXX from million to million for XXXX substantially lower Total fiscal $XXX.X property primarily year that and casualty as to compared $XXX.X expense million property insurance losses other $X.X year prior related were interest offset expenses recoveries foreign increased to by currency decreased due losses.

million, XX, tax company of company the recorded during of tax the income $XX.X $XX.X the months, the biofuel December income For X due incentives. The quarter. taxes XXXX, an benefit primarily to ended also paid million

months negative XX, income million. The XXXX, XX recorded tax a an for December tax year ended the the company's is benefit the rate XX.X%. company For effective of $XX.X

taxes XXXX. XX.X%. tax tax assets, The in biofuel and deferred income in valuation effective is related million to of Excluding rate the company tax change the paid $XXX.X allowance a incentives

the tax credit credit fuel income beginning production blenders know, As you the tax transferable in tax is replacing XXXX. a clean credit

of to released treasury and credits. these we by believe month sight last the the indicated, provides guidance realize previously monetize As line

And down We the debt. paid update look $XXX.X year quarter partners. of with forward are said, as million million approximately details of our fiscal of fourth for was to XXXX. we rigorously paid an In working previously $XXX.X through down business providing debt the We soon. XXXX, Randy

CapEx about company's while combination effective purchasing The ability Green to delever assisted receipts XX, and billion debt of also about as working of The million from year-end $XX.X common the our stewardship X to or Diamond of at $X capital billion company's the solid stock. XXXX. venture XXXX, million in $X.X December and joint outstanding Diesel management, of compared dividends shares total was

at credit approximately borrow available Our Xx, had $X.X as our we QX and leverage ratio covenant bank facility. revolving billion XXXX to under preliminary

quarter million $XX.X fiscal $XXX.X and the expenditures year for XXXX. million Capital totaled fourth in

million As XXXX. that was million earlier, January additional cash $XX.X DGD an we quarter dividends with the in Randy fiscal XXXX, and from in distributed million for mentioned received $XXX.X $XX.X during year

XXXX increase it expenditures judiciously capital of approximately be $XXX caused to conditions. plan operating will million, slight the market for a managed While based on

over Randy. you, the to I'll Now call back turn

Randall Stuewe

done. Brad. Thanks, Well

We are optimistic XXXX. about

first We momentum robust the credit, the with of have and and the to volumes provide fat begun pending in domestic tariffs clean lift should material throughout build production a quarter greater prices strong year value certainty to expect raw feedstocks. even to fuel provide year. the and stronger continue that of remain Global

U.S. and world Ingredients Starling producer producer. XXX our integrated clarity in With we fuel ingredients largest policies, is carbon This the is as standard, vertically the fats as advantageous for of market such biofuel core only regulatory very low on the stabilizing. is renewable believe waste the truly and California's business

A and combined supply operational us for our market the imports and in demand early position These environment signs capitalize renewable more to balanced of the biodiesel capacity and drive with positioning on foreign in sharp domestic rationalization and growth. production, decline diesel biofuel expertise indicating XXXX. dynamics, and strategic uniquely

market and continues year. ingredient tax our production the solidify to and adjust fuel the the I clean throughout wins the credit, As to through work expect on prices details

working capital capital staying excellence management, Our very clear. margin focused deployment, priorities operational we're for and XXXX management. are disciplined efficient on

health strong a financial in also natural continue those policy portfolio robust for of markets a college deleveraging, targeted expansion as space, United and a continue a future. leverage drive development in focus to maintain to aiming States peptide the the the powerful We'll ratio with collagen is goal X.Xx delivering We'll and in solutions the holistic in evolve Our to benefits. Europe. on gas with bank and and explore natural renewable opportunities research

to diesel ways SAF renewable as more we build into. are our continues to looking sales And book convert nicely, at

percentage turnarounds XXXX, to throughout the command be as larger of are sales and We XXXX completed expect SAS year mix. a stronger DGD gaining than our momentum

new guidance year Given am of we'll $X.XX progresses. provide billion for rate and the into adjusted year, run $X.X with providing fourth period and as X I the EBITDA XXXX, combined only billion the updates to XXXX quarter

that, back now. like to Q&A With I'd go to

Operator

Instructions] of question from line comes Gupta the Our first [Operator of UBS. Manav

Manav Gupta

Brad.

them. senior being You've a management imported Uco. when is bigger it much at getting X was of helpful was to like My members for routed credit XX. [indiscernible] no the broke tar. like years. no been things oil, room we bean for than almost the [indiscernible] All DAR, look relates help import the where for these written credit no Like for in created into custom for should credit There is it and credit canola. very feels question it over

So which winner in the understand makes relative help us a are all ways in space. the

Robert Day

is this Look, Yes. I'll Bob. first. go Manav. Thanks,

about realize feel safe the we stated very reiterate the and But the current Randy XXX XX. his opening confident think remarks how advice is a I make in us new the harbor, due that ability gotten provides provided. we've to notice law, say value I'll clearly or credit unless until is diligence just about that and notice that

able what's we're So that. out we're today to very there what do with and pleased with

reason has a It credit, You to do the but with and we're pointed is is The environment tax question, being what's primary this for tax policy. That's CI adjusted more adjusted biofuel U.S. only CI very that with to producers. for score Darling's out do it's influence, to a in nothing positive good and for just in is reasons that it eligible Darling. credit, for your have that

for score this fats CI oil. lowest global that feedstocks the U.S. eligible cooking and are produces credit, used Darling animal

from and placed eliminating than PCC, DGD has be production largest X process from and higher it margin Diesel process to able to feedstocks to low given CI to strengths in feedstocks And anyone Diamond things. certainly those able of biofuels to are Green to positive They if Green then it's well score earn amount producing eligibility that Diamond We pretreat proven for the also biofuel, producer feedstocks. those extremely do are also a those benefit plays U.S. of else to the better have. Diesel. for is they And

Manav Gupta

your in just you looking opening elaborate more I'll R&D. a Can you to little bit? did quick say that SaaS versus very a comments, Perfect. Randy, ask on follow-up. make

Matthew Jansen

Matt. This Yes. is

in line in additional looking And up we've SAF past that's next eventual that first steps how running once exactly they be So mentioned we what other capacity. we we're would opportunities, doing. the have the got -- and for to adding as -- our

GDX at And half line. so the about is know, production you as towards SAF our only of channeled

coming I And and months. over or the go think so are to add do invest whether transpire the in will Port Norco. things in that we there if capacity all actually Arthur But we these something in

at us. -- that of was, looking for And okay, now is we big the hurdles this one have new

see a, want make able So spec be and and be plant, it. process to, get and to build the we sell

we've point. so this accomplished at those And all of

to next And so confidence what's the that's our towards giving work us SAF plan.

Operator

question is of with from Dushyant Our Jefferies. next Ailani line the

Dushyant Ailani

noncash. then it's a Brad, the more $X.XX impact working on $X.X about it more actual And is pleasure exclude guide about role. [indiscernible] truly adjustment. new that today, given, as of guess adjustment to you've the LCM thinking with My that on XXXX, that I about question billion could billion, the what adjustments. like was any share the maybe does what -- an does from -- that LCM first Maybe the

Unknown Executive

guide to want you Do take the question.

Randall Stuewe

at run conservative rate that question. DGD time. ingredient at basically last Dushyant, XXXX. year this Obviously, in gallon I'll run equivalent set coming higher the a to QX but We're take this the guide core out much per than had rate we business is Ran. the

it to what been to think to another and combined so answer better job. adjusted you no, have a lot Clearly, today I one time It's moment. million of times is is pickup. we reiterate don't not know and million DGD did XXX view on or there's We're at within more this take it, And or a monetize $XXX million nice the it. doing We questions include of see trying $XXX a law. the X conservative there. really $XXX can to in mean Bob it calculate how than any LCM combination doesn't core just $X ingredients to the hard billion much I

Our we're will calculating, we and and with advisers tax counsels and are comfortable be can recognized. it how monetized believe be

S&D view now. we'll that So you view of we're talk curtailing Bob about a and bit little tightening the comment and the that and of to We'll go this with want fundamentally and about the it. operating that? so to business and on RIN right can We the do LCM capacity maybe Bob, talk

Robert Day

for it And Brad, free to of oil it's do system that to part LCM it easy We pull to And this those but would jump it to that it's pretty out, for accounting be it feel explain and the relatively a so. noncash that want would works, recognize an industry. typical -- how is expense. and Yes. But is it's gas in. trying possible on call, be

Brad Phillips

to be that I in exhibit follow attached, would recorded, thing it only The That's Dushyant a couple which will way that. Obviously, financials, the is out. DGD's add be will In weeks. and financials, on as audited, which audited LCM LCM is Sean attached is an called audit, XX-K to we of the our

our as you, understand Our that it back number, out, partner analyst we'll has for but the audited most the to there. opportunities part, we And different it record continue to Back share the LCM. of Bob.

Dushyant Ailani

the details much the next That's next next maybe -- on kind Perfect. quantify just then food more sales then share of what in of XXXX? And you could And XQ? that. maybe what X possible, you looks Could ramp how if the was in data. -- perfect. Appreciate on like

Unknown Executive

But ingredient Well, fourth I this what This in and don't in can that about there. seeing companies think product are efficacy of kind a is say we really its some to the disclose brands we're interesting is traction support were requires can we with determine there. different an of of consumer getting the help they the of what that them as rollout sales education. product, And is what what the we number say working quarter. CPG

out today, topic this great trying to to the to to And they're of in is are on and a confident CPG use lot traction. really our we're are customers we're so after continue lot that environment problem. product. to a And the done people using This do see our and hot just figure what is products, to going how that customers solution do they a a educate investing pharmaceutical

Operator

question Derrick Texas next Our Whitfield from line is of with Capital. the

Unknown Analyst

Brad know on are the I XX as to to Bob a on spreads first my both guys from your perspective you lean sector. announcements. congrats and calculating question, real-time I consistently respective in for macro Also, wanted With

exceptionally While RD for $X.XX SBO hit the and the SBO upstream for positive your segments, operator been per has with [indiscernible] gallon business marginal lower both near has taken costs. was downstream partially a and that offset

But we market this does volumes those here, still from it and out improve firm? crystal that RV like us either seems that has assuming or backing to ball after to to that loss, the SPO to you say has RIN offset on guys, lower what how will biodiesel your further imports to need go

Robert Day

this Look, is Bob. Yes.

I think complexity from as for inside for feedstocks is But challenging this these Green CI your and others. not to different of XXZ through things how required, -- so really a there's lay well kind of it it that question works that only agile be make upfront of to score certifications add terms for prepare XXZ of and and would to what standpoint in products. some comply lot I you that. out understand is positioned to Diamond different mix a

We are think to lot in that addition a of general struggle to that just eligibility. with going companies

production and that biofuels, the of And RIN towards so value which of increases of production fewer LCFS and RINs all credits. biofuels, decreases imports points really lower

RINs valuing And in you've liquidity products of it's where so seeing forward don't mature got futures trade the book. with we're it in like market speculative lot that It's a already. the just market trade a and

of more near-term see crystal but to we're that goes need see our says we're see to year starting supply continue as going we the tightness reaction, the on. to that that. price see And ball the to in before We and demand

Unknown Analyst

focusing aspect upstream Terrific. And the on of XXZ. maybe

of of value the relative should also Eco-imports commented out backing canola the SDO guys removing As your certainly it and increase on domestic value fabs. you increases

you at demand Are greater the year? to seeing better are Meaning getting running late? competitors guys start non-DGD your

Matthew Jansen

that, although say spent what how would This XXZ into and digesting there the is would that Matt just it's a we say on XX%. much logistical time and transition so lot also still call from XX% I There's to preparation again. means plays it, been early energy the I and going of, are, that yes, the game. and was in all

little you expect So yes, a than slower it's fully but continue. that have out what to but play to we might imagine, bit we

Operator

you. Thank

of line Stephens. the from is question next Pooran Sharma with Our

Pooran Sharma

off start the to wanted I dig Great. just into of dividend. and kind

On free. JV release, debt you the the mentioned

And the uplift was So figure then the an distributions. to January pretty large.

to that want about number thoughts just on January, color something year? helpful. So to around get Is in think there your there large? any Or how for dividend that made is be the that would just in that

Brad Phillips

Yes. before, This we've calculation is Brad. it's mentioned distribution monthly repeat, Look, given I'll a a day. but on

is do why a question. third-party very is when distribution made. debt-free a of XXXX. is say that? a off mean JV as the mentioned, So you the I good obviously $XX revolver, I There million It's the was calculation end

on total. given being be distributions you saw we momentum at Is down. in into know. we But going What of obviously, say forward-looking with the now, going kind to right because see, is it look the never obviously, with it's see on there and month, But see be moving a was there there would and things I But 'XX. what a and It up probably PTC that start every will distributions we 'XX. forecasting see just larger solid depends we where full into day. day out great for distribution and greater than the some a involved, 'XX you year as number

sold policy, that diamond coming would come that, back dividends going them, will there, foresee of distribution JV through And Darling being we that recall, is somewhat to larger works that PTC Diamond. those year. we past to combined via as then may out would of be, X, to see you this PTC way the than combination or with the as we the the credits monetize are back the outside And those

Unknown Executive

what in that, be would catalyst of add CapEx to turnarounds just I run in forward, beyond other looking would QX, on see significant anything just not X CapEx than normal our rate that do ongoing terms

Pooran Sharma

you that could color. bit the Appreciate production more. I opportunity mentioned guess side, just as that guys incremental wanted for side. been a And here. follow-up I into the it. And production get operational about if progress to maybe costs commercial making to yourselves dig think Got on the the a like you've little talk just SaaS some just From that. wanted operators -- are maybe lower the lower-cost then around color I secondly, you

just of union made the within announcements you if that. the but month, some on You've give kind could us past wondering

Matthew Jansen

This believe fat our that that I a on say position announcements in contracts right, operate in some standpoint, made. we've strong Matt the are from commercial again. have made cost And is of we to then the Sure. terms yes, favored would cost or some we of a that you're we production.

and these release point release. but -- not that in 'XX in public public to Just U.S. out of competitive demand the through 'XX, for not reasons, in contracts come make only a on Europe. also But all our we to continued strong chooses the not customer see a many cases,

Operator

question next the from line of Heather Heather of Research. Jones Jones The is

Heather Jones

years. Congratulation's on with been It's you retirement for many great many, and working Brad.

So my fat was question pricing. on

change very in to Green. few But pricing -- the Matt, still fat catalyst we've seen Diamond still then taken the just So European off. U.S. mean, ongoing here is that over mentioned I strong at the I and think, weeks in the flat you is catalyst past moves

for the and shutoff a see demand. Just of feedstock commissioning are in [indiscernible] imports just catalyst So that, a in given it expansion? been all is what function some change you the simply the around market, driving just of -- XXZ. U.S. pullback in you uncertainty the There's that is produced of do

to have in love that all would what market. see here seen just you I So

Unknown Executive

Sure, Heather.

a all, an catalyst to had -- that across month have let's all of the the say, plants course so we First changes not But not January, keep run mind change rate have of the in -- in still -- we had while have at this our that of through X expected is DGD on. and been we and of change X the catalyst able DGD month. on then a in we

words, January in DDI ran other is in continuously. running So and DGDX

procure So just a of the and the pets BTC December, and transition think, slowdown was, the imports largely that. early PTC. to People continued inventories ongoing starting probably that I we to would are an basis. I we that from originate to saw say have on the around managing related in

And picking that's so up.

we're that's to trying to standard the back get so refilling to and trying pipeline, run I And to back the rate what is a market get think, in many cases.

we in And DGD to significant that seen have But And are also it's market-driven. you're or right, only a obviously producers the bump it's buy, fat other as something buying continue well. the prices. not in is market but

Robert Day

add, of is not And we've is of Heather, market it Yes. just demand let's suggested it's say, broadly as SAF And what first seeing we're move we I others got kind of it's where the the a where is quite substantial X SAF from year would would is, of into Bob. in availability standpoint. the a volume XXXX be. lot this sort

just so a the And seeing of S&D prices falling. are tightness and we're

Heather Jones

see driving that to in And fats related -- strong, having and have all all mean, that the been those and off. I new to there but And for continues late has on vegetable mandates I UCO the oil business? piece, European can't following use to be taken that, getting do through SaaS you mean 'XX animal what the stronger is up

Randall Stuewe

at global animals, supportive I all, of to think, very fat. animal if that's I you mean XXZ, look first

European -- support probably where going driving lot that that's is what's to as well a demand SAF that. of So

things So in combined I direction. that's moving it's think all really, those that

Operator

Andrew Markets. Our Capital with next the question is BMO of from Strelzik line

Andrew Strelzik

you've focus prior decoupling in about well. on maybe from in anything talked XXXX, to frame incremental My way the in about fats first even your margins. ask the contribution Is of trends quarter, excellence, wanted talk the can quarters kind that into in quarter? a as there operational the of the given fourth to But in you I that which front one, on about happened obviously, the that

Unknown Executive

years and I done that last and system. would than where and dividends Eastern done just cost would to don't capacity over to especially other the out what ongoing something Shore a the an know the through decrease of And we're this call the we've and I work we've to reliability see streamline and say numbers. specifically is effort, is that's starting X the add the U.S. showing I and now to in lot

Randall Stuewe

Yes. into deflationary which I globally, most adjustments on 'XX of takes when -- say, while really mean, lot would out Andrew, we make market, in And there it you I get were just winter and of to a a since the a bit each the of goes each the is supplier, different. to each see ] now geography procurement our the through contract, flow the and side, to we're that Same a P&L little starting here. for Rousselot [ business, of starting fruits labor

initiatives in out a anyway. lot announcing a been as be shouldn't that low-cost There's operate there cost-cutting you of not -- because we've to giant tried always operator position

skyrocketed simply equipment and little for biggest we're of a we replacement cost just side the has Our risk out kind taking the it that takes the making while. of and ultimately, in procurement compensated sure is piece get there

of that a and [indiscernible] know recognize proud team also of friends don't world, the but and has that our slaughterhouses and reliability around and I'm the of integrated to be And made incented lot did. what very a providers we lot I they think paid I for.

Andrew Strelzik

about the a have nice quarter-over-quarter. seasonality that to the that you're improvements. talk could of addressed kind Maybe and of what underlying that? you've terms that couple would color. then ask Is the EBITDA in about I up quarters? step Food past helpful there That's business of And helped segment, sequential seeing you you had wanted seeing destocking demand in Are also Okay. and in dynamics where competitive

Unknown Executive

tremendous in we're and we high Yes. But in starting something destocking, of I end I some kind touched important. of business. to relatively amount a has that And inventories the market and been think was improvement. have nearing don't think seasonality that's there's see been that you a on the in of

are were good, and stable. sales So margins

Operator

TPH. Our Blair line Matthew of the is question next with from

Matthew Blair

future your billion guide. tenure Circling included long invest And the sounds endeavors. Brad, it the be correctly, to billion business successful and that would I your around like in XXXX $XXX congrats $X If and core guide. that's on on wishing you heard back to

looking If I but in we're QX, we tailwinds feed. around QX think X.XX, to have annualize does some tend seasonal

Is you could simply there fast seed what core incremental in for up from about numbers into talk boosting push is XX upside and Or your are pricing it's other growth the business helping XXXX? any XXXX? else higher -- So that the initiatives? what's

Randall Stuewe

and go fat I started saw That's $X.XX as January to that in multiply results flat the start Randy, here, seen accelerated pound they've but up will mean X.XX February relatively times prices were I XX.XX. I to say to the and through. period when in prices we here. flow before a fat Matt. $X.XX This is We've Xx, get

So referenced processors. improving improvements we both and that prices fat demand CI the in for other last low question, Clearly, feedstocks, from and procurement DGD

around world pretty demand the darn strong. feels Protein

I that's demand referenced soybean think been for strong protein guys. out There's the by there.

add? pretty So anything well. The to doing you feel we quite Bob, business there. want going good is about Russo what's And on

Robert Day

on last I margins think has the new Demand covered we've and some we and market. stable, are the question. on solid products been got

Matthew Blair

hit reduction It pay almost to discuss Could about debt in debt for or Sounds any looks good. you down you're you that aiming XXXX XXXX. target. $XXX then of targets million And XXXX? in like

Brad Phillips

recently have Brad. now, see we're this this right Matthew, right obviously, things X.Xx on our of is some abnormal is coming anything We to Yes. where about now talking earlier, from shown million the anywhere debt outside -- and where we been see that's said -- reduction million move year. Randy $XXX you leverage. In kind up. environment $XXX guys headed XXXX,

along the very by that year, this debt think we're be to with reduction. far path of going that I end

a months ago. to conditions outlook hit that us Yes, behind. that's market XX of that we're year But the about see about due we But now. kind right

Randall Stuewe

Yes. to And I do mean, not it's the math. hard

You're pay take you down $XXX at $X $XXX million. $X.X you to year, million billion now, it million if to next

You X.Xx. to at you're to get $X.XX $X.XX the and

Operator

of Citigroup's. the line of next from is Sunderland take line Hearing we no question next The the will from question the Palmer response, David with Baird. with Tom

Unknown Analyst

about the one just all Thank of I Brad. questions you help, to moving just these circle in the to Bob. guys taking planned have Brad initially SaaS could different chain to and I being I been just If adding a answered. staff you to start congratulations about the talked want just new back pieces Randy, process than for Most XXXX for contracting market and in in supply many think contracts earlier and by obviously had and the suppliers my my longer you product. already due

of contracting there with there sense And that new XXXX? guys' out deals, we deals I there's market now wondered, think is from any a just kind how perspective? now to deals you're for some into seeing template that that Or moved development how of and your maybe having do acceleration these about any do are

Matthew Jansen

the This I a for have on X and front-end I way. is staff SAF going that to can call take And loaded. digestibility to and that X, we And continue can was one. I'll we now X a with just contract to years this it DGD Matt. acceptability the say come would proven a think reliable we mostly confident. that -- it forward, and we've in actually market

in actually a sales going seeing already we're despite already But interest healthy forward. the had that a book pickup developed. we'd So fact pretty

Thomas Palmer

Thanks guys the take rest I'll offline. Great.

Operator

next from Zhang The question with you. Thank the of Scotiabank. Betty line is

Y. Zhang

kind guys R&D types and first advantage looking R&D. of what to opportunities you And question, translating space? specifically, I how feedstocks For at? ask see wanted competitive do my are about What of into your the you

Matthew Jansen

take Betty. is one, Bob. This I'll that

RNG a we have I'll business that So in first, electricity just saying today. by to Europe start large

by What our United it an with gas, in capability lot voluntary a Green a that agreement started into support would called seen investments treatment We demand Darling gas of forming we've group and understands converting So renewable well. covering renewable that interest a for where are way. natural we is and in natural wastewater more that gas recently the quite States. is ponds biomethane has

animal, and at advantage waste the We and streams see we food waste as opportunities and United streams to that really to are well up with what States, looking improved to freight, Darling scale positioned of our take market. that together position pull an our in access we're

And is interesting evaluate develop. think to so States region the and see we opportunity, a that we're really that continuing United very to

Y. Zhang

helpful. That's

And of we XXXX. think XXXX, what wanted ask the CapEx second $XXX lower were to to my maybe in about than question, you're for back also, a around for year. came bit the kind beginning small For I it seeing I expecting step of a million up at

us could maybe through walk just you If the pieces moving there?

Randall Stuewe

Betty, greenfield right out of is And and working debottlenecking of a factories we're different $XXX also of bit new and Yes, assets million Randy. Yes. has CapEx that this now, little on right construction now. million some some number was the growth XXXX. there for $XXX

during we've to team, right build around explained that we will million like year, $XXX a move now, our good As number. but -- feels number the momentum as

for last that is delivered me out the I there. thing did capital number year assets that team think most and that's deprive we the not the important the

projects capital while to there's We just so want a -- delevered it thought And I as here. some a because delayed don't makeup be it year we wasn't. growth little bit of

good number. $XXX million a So is

said and with here the it future. put we're the continue for Brad company good As in manage in his to position wrong if comments, judiciously a something

Operator

The of is TD line question from the Cowen. Jason with Gabelman next

Jason Gabelman

And was retirement. working Yes. on Brad, It congrats with great you.

sales first Europe is SAF and that antidumping has into Right then. of now, your kind for Europe question diesel Do duties see -- obviously one. a biodiesel, the selling region. SAF question for the the not policy risk potential and for you first into you're The a SaaS broad as renewable

able regulatory move kind besides, the see And even contracts course, risk there out a any in XXZ? you margin? or either while other your retaining to are of happens, that get then do part you volumes because the grandfathered of that, are of If of broader

Matthew Jansen

We're question in say a there sell just well. look, based respect selling -- the regulatory customers today, Jason, need don't We're be down with when Matt. is not the would if price we this going on we're -- that certain a But as is and to I I selling way of in on think that lot sales that only see our Europe. in a to horizon. selling States deal with that we would those. that of comes we get that United with and terms that say, are the they lot to hypothetical to Europe, to I'd through we Yes. price the would hurdles deal there's offer something pipe. a is

Green so is And think balanced. I well Diamond

because As good far this as the regulatory it's working we're environment point in think I we've this and notice. notice gotten with a XXZ,

That's And what see but we is support really be all policy, But could a could bipartisan U.S. that for possible. not policy, new policy. change biofuel out. notice maybe put notice biofuel certainly broad or environmental

And unfolds. between able Diamond the that integration of given confident sort be Valero we'd network so Green however to global shakes out, and regulation Diesel and to that Darling the adapt have we're whatever we that and

Randall Stuewe

when origin, pick the whether the out with going north it's up optional Yes. to explain. whether of they're of it's Europe. Gulf, customers they And it's nice share I job Matt the day, or don't now that it's Coast West right up fill that on the following where our whether think a up did product, just or the on of end as At risk

Jason Gabelman

follow-up is on Got the it. Great. And LCFS program. my

LCFS but higher. at to off triple-digit hope can with think reflect guidance? start clearly move maybe come XXXX maybe some for that kind expectations amendment -- the had I within to new was LCFS levels not why on have of lows, think that have and that there your at not prices They've the some would your rebounded hoping some the you prices LCFS prices you assumption for

Robert Day

Yes.

passed Bob. So Carb continuing is confirmation we're April be to The effective for -- I think amendments. X. this amendments of And that wait just those would and

sees we'll see I think change. the to that market see if to we'll start that, start

RINs, does. they to futures trade don't credits, similar like But mature LCFS a market

bank, a eat credits, values start to needs this we before bank really year see market with we credit into And are to that coming the so through a lot increase. big of

And that's happens of course slowly so that the probably the credits, with year. throughout specifically LCFS something

Operator

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

Randall Stuewe

Well team thank to describing the XX Really years. Thanks, everybody. situation. Brad, for done we it. for just today. you say Great done want everything our questions you've appreciate by

We'll coming You'll couple Stay truly feel additional have of safe. you as And missed. here. conferences the months you. next you with be Suann. the free if many always, up follow Thank of see to in questions, over

Operator

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

may disconnect. You now

Darling Ingredients (DAR) 6 Feb 252024 Q4 Earnings call transcript