(Mark One) |
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE |
SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended March 30, 2019 |
OR |
/ / TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE |
SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from _______ to _______ |
Delaware | 36-2495346 | |
(State or other jurisdiction | (I.R.S. Employer | |
of incorporation or organization) | Identification Number) | |
251 O'Connor Ridge Blvd., Suite 300 | ||
Irving, Texas | 75038 | |
(Address of principal executive offices) | (Zip Code) |
Large accelerated filer | X | Accelerated filer | ||||||||
Non-accelerated filer | Smaller reporting company | |||||||||
Emerging growth company | ||||||||||
If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period | ||||||||||
for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of Exchange Act. |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Common stock $0.01 par value per share | DAR | New York Stock Exchange (“NYSE”) |
Page No. | ||
March 30, 2019 | December 29, 2018 | ||||||
ASSETS | (unaudited) | ||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 95,716 | $ | 107,262 | |||
Restricted cash | 107 | 107 | |||||
Accounts receivable, net | 371,339 | 385,737 | |||||
Inventories | 339,882 | 341,028 | |||||
Prepaid expenses | 39,070 | 35,247 | |||||
Income taxes refundable | 4,102 | 6,462 | |||||
Other current assets | 20,959 | 22,099 | |||||
Total current assets | 871,175 | 897,942 | |||||
Property, plant and equipment, less accumulated depreciation of $1,281,115 at March 30, 2019 and $1,246,095 at December 29, 2018 | 1,691,558 | 1,687,858 | |||||
Intangible assets, less accumulated amortization of $427,687 at March 30, 2019 and $423,575 at December 29, 2018 | 579,313 | 595,862 | |||||
Goodwill | 1,222,382 | 1,229,159 | |||||
Investment in unconsolidated subsidiaries | 433,381 | 410,177 | |||||
Operating lease right-of-use assets | 129,721 | — | |||||
Other assets | 53,487 | 53,375 | |||||
Deferred income taxes | 14,037 | 14,981 | |||||
$ | 4,995,054 | $ | 4,889,354 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Current portion of long-term debt | $ | 23,693 | $ | 7,492 | |||
Accounts payable, principally trade | 192,511 | 219,479 | |||||
Income taxes payable | 8,861 | 4,043 | |||||
Current operating lease liabilities | 39,776 | — | |||||
Accrued expenses | 281,331 | 309,484 | |||||
Total current liabilities | 546,172 | 540,498 | |||||
Long-term debt, net of current portion | 1,663,763 | 1,666,940 | |||||
Long-term operating lease liabilities | 89,100 | — | |||||
Other non-current liabilities | 113,984 | 115,032 | |||||
Deferred income taxes | 225,336 | 231,063 | |||||
Total liabilities | 2,638,355 | 2,553,533 | |||||
Commitments and contingencies | |||||||
Stockholders’ equity: | |||||||
Common stock, $0.01 par value; 250,000,000 shares authorized; 168,409,679 and 168,098,177 shares issued at March 30, 2019 and at December 29, 2018, respectively | 1,684 | 1,681 | |||||
Additional paid-in capital | 1,548,446 | 1,536,157 | |||||
Treasury stock, at cost; 3,660,873 and 3,437,579 shares at March 30, 2019 and at December 29, 2018, respectively | (52,845 | ) | (47,756 | ) | |||
Accumulated other comprehensive loss | (312,263 | ) | (304,539 | ) | |||
Retained earnings | 1,105,517 | 1,087,505 | |||||
Total Darling's stockholders’ equity | 2,290,539 | 2,273,048 | |||||
Noncontrolling interests | 66,160 | 62,773 | |||||
Total stockholders' equity | $ | 2,356,699 | $ | 2,335,821 | |||
$ | 4,995,054 | $ | 4,889,354 |
Three Months Ended | |||||||
March 30, 2019 | March 31, 2018 | ||||||
Net sales | $ | 835,104 | $ | 875,374 | |||
Costs and expenses: | |||||||
Cost of sales and operating expenses | 646,663 | 678,099 | |||||
Selling, general and administrative expenses | 85,003 | 86,902 | |||||
Depreciation and amortization | 79,164 | 78,619 | |||||
Total costs and expenses | 810,830 | 843,620 | |||||
Operating income | 24,274 | 31,754 | |||||
Other expense: | |||||||
Interest expense | (19,876 | ) | (23,124 | ) | |||
Foreign currency loss | (732 | ) | (1,481 | ) | |||
Other expense, net | (2,525 | ) | (2,516 | ) | |||
Total other expense | (23,133 | ) | (27,121 | ) | |||
Equity in net income of unconsolidated subsidiaries | 23,773 | 97,154 | |||||
Income before income taxes | 24,914 | 101,787 | |||||
Income tax expense | 5,274 | 3,712 | |||||
Net income | 19,640 | 98,075 | |||||
Net income attributable to noncontrolling interests | (1,628 | ) | (770 | ) | |||
Net income attributable to Darling | $ | 18,012 | $ | 97,305 | |||
Basic income per share | $ | 0.11 | $ | 0.59 | |||
Diluted income per share | $ | 0.11 | $ | 0.58 |
Three Months Ended | |||||||
March 30, 2019 | March 31, 2018 | ||||||
Net income | $ | 19,640 | $ | 98,075 | |||
Other comprehensive income/(loss), net of tax: | |||||||
Foreign currency translation | (4,886 | ) | 17,295 | ||||
Pension adjustments | 858 | 667 | |||||
Natural gas swap derivative adjustments | — | 22 | |||||
Corn option derivative adjustments | — | (1,605 | ) | ||||
Foreign exchange derivative adjustments | (1,937 | ) | — | ||||
Total other comprehensive income/(loss), net of tax | (5,965 | ) | 16,379 | ||||
Total comprehensive income | $ | 13,675 | $ | 114,454 | |||
Comprehensive income attributable to noncontrolling interests | 3,387 | 1,287 | |||||
Comprehensive income attributable to Darling | $ | 10,288 | $ | 113,167 |
Common Stock | ||||||||||||||||||||||||||
Number of Outstanding Shares | $.01 par Value | Additional Paid-In Capital | Treasury Stock | Accumulated Other Comprehensive Loss | Retained Earnings | Stockholders' equity attributable to Darling | Non-controlling Interest | Total Stockholders' Equity | ||||||||||||||||||
Balances at December 30, 2017 | 164,653,437 | $ | 1,679 | $ | 1,515,614 | $ | (44,063 | ) | $ | (209,524 | ) | $ | 981,227 | $ | 2,244,933 | $ | 82,764 | $ | 2,327,697 | |||||||
Adjustment to initially apply FASB ASC No. 2018-02 Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income | — | — | — | — | (4,782 | ) | 4,782 | — | — | — | ||||||||||||||||
Net income | — | — | — | — | — | 97,305 | 97,305 | 770 | 98,075 | |||||||||||||||||
Deductions to noncontrolling interests | — | — | — | — | — | — | — | (10,173 | ) | (10,173 | ) | |||||||||||||||
Pension liability adjustments, net of tax | — | — | — | — | 667 | — | 667 | — | 667 | |||||||||||||||||
Natural gas swap derivative adjustment, net of tax | — | — | — | — | 22 | — | 22 | — | 22 | |||||||||||||||||
Corn option derivative adjustment, net of tax | — | — | — | — | (1,605 | ) | — | (1,605 | ) | — | (1,605 | ) | ||||||||||||||
Foreign currency translation adjustments | — | — | — | — | 16,778 | — | 16,778 | 517 | 17,295 | |||||||||||||||||
Stock-based compensation | — | — | 8,527 | — | — | — | 8,527 | — | 8,527 | |||||||||||||||||
Treasury stock | (159,758 | ) | — | — | (2,962 | ) | — | — | (2,962 | ) | — | (2,962 | ) | |||||||||||||
Issuance of common stock | 153,983 | 1 | 1,695 | — | — | — | 1,696 | — | 1,696 | |||||||||||||||||
Balances at March 31, 2018 | 164,647,662 | $ | 1,680 | $ | 1,525,836 | $ | (47,025 | ) | $ | (198,444 | ) | $ | 1,083,314 | $ | 2,365,361 | $ | 73,878 | $ | 2,439,239 |
Common Stock | ||||||||||||||||||||||||||
Number of Outstanding Shares | $.01 par Value | Additional Paid-In Capital | Treasury Stock | Accumulated Other Comprehensive Loss | Retained Earnings | Stockholders' equity attributable to Darling | Non-controlling Interest | Total Stockholders' Equity | ||||||||||||||||||
Balances at December 29, 2018 | 164,660,598 | $ | 1,681 | $ | 1,536,157 | $ | (47,756 | ) | $ | (304,539 | ) | $ | 1,087,505 | $ | 2,273,048 | $ | 62,773 | $ | 2,335,821 | |||||||
Net income | — | — | — | — | — | 18,012 | 18,012 | 1,628 | 19,640 | |||||||||||||||||
Pension liability adjustments, net of tax | — | — | — | — | 858 | — | 858 | — | 858 | |||||||||||||||||
Foreign exchange derivative adjustment, net of tax | — | — | — | — | (1,937 | ) | — | (1,937 | ) | — | (1,937 | ) | ||||||||||||||
Foreign currency translation adjustments | — | — | — | — | (6,645 | ) | — | (6,645 | ) | 1,759 | (4,886 | ) | ||||||||||||||
Stock-based compensation | — | — | 10,403 | — | — | — | 10,403 | — | 10,403 | |||||||||||||||||
Treasury stock | (223,294 | ) | — | — | (5,089 | ) | — | — | (5,089 | ) | — | (5,089 | ) | |||||||||||||
Issuance of common stock | 311,502 | 3 | 1,886 | — | — | — | 1,889 | — | 1,889 | |||||||||||||||||
Balances at March 30, 2019 | 164,748,806 | $ | 1,684 | $ | 1,548,446 | $ | (52,845 | ) | $ | (312,263 | ) | $ | 1,105,517 | $ | 2,290,539 | $ | 66,160 | $ | 2,356,699 |
March 30, 2019 | March 31, 2018 | ||||||
Cash flows from operating activities: | |||||||
Net Income | $ | 19,640 | $ | 98,075 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 79,164 | 78,619 | |||||
Gain on disposal of property, plant, equipment and other assets | (4,250 | ) | (462 | ) | |||
Gain on insurance proceeds from insurance settlements | (845 | ) | (503 | ) | |||
Deferred taxes | (2,901 | ) | (2,649 | ) | |||
Increase in long-term pension liability | 646 | 159 | |||||
Stock-based compensation expense | 10,327 | 8,992 | |||||
Write-off deferred loan costs | 27 | — | |||||
Deferred loan cost amortization | 1,574 | 2,939 | |||||
Equity in net income of unconsolidated subsidiaries | (23,773 | ) | (97,154 | ) | |||
Changes in operating assets and liabilities, net of effects from acquisitions: | |||||||
Accounts receivable | 11,692 | (14,590 | ) | ||||
Income taxes refundable/payable | 7,270 | (1,384 | ) | ||||
Inventories and prepaid expenses | (5,063 | ) | (10,182 | ) | |||
Accounts payable and accrued expenses | (43,016 | ) | (38,422 | ) | |||
Other | (1,891 | ) | 3,486 | ||||
Net cash provided by operating activities | 48,601 | 26,924 | |||||
Cash flows from investing activities: | |||||||
Capital expenditures | (84,269 | ) | (56,587 | ) | |||
Acquisitions, net of cash acquired | (1,431 | ) | — | ||||
Investment in unconsolidated subsidiary | — | (3,500 | ) | ||||
Proceeds from sale of investment in subsidiaries | — | 2,805 | |||||
Gross proceeds from disposal of property, plant and equipment and other assets | 7,868 | 1,479 | |||||
Proceeds from insurance settlement | 845 | 503 | |||||
Payments related to routes and other intangibles | (2,778 | ) | (15 | ) | |||
Net cash used by investing activities | (79,765 | ) | (55,315 | ) | |||
Cash flows from financing activities: | |||||||
Proceeds from long-term debt | 2,138 | 3,876 | |||||
Payments on long-term debt | (10,974 | ) | (9,622 | ) | |||
Borrowings from revolving credit facility | 156,829 | 135,184 | |||||
Payments on revolving credit facility | (138,147 | ) | (80,019 | ) | |||
Net cash overdraft financing | 14,525 | (331 | ) | ||||
Deferred loan costs | — | (1,094 | ) | ||||
Issuance of common stock | 12 | 182 | |||||
Minimum withholding taxes paid on stock awards | (3,190 | ) | (2,018 | ) | |||
Net cash provided by financing activities | 21,193 | 46,158 | |||||
Effect of exchange rate changes on cash | (1,575 | ) | (1,672 | ) | |||
Net increase/(decrease) in cash, cash equivalents and restricted cash | (11,546 | ) | 16,095 | ||||
Cash, cash equivalents and restricted cash at beginning of period | 107,369 | 106,916 | |||||
Cash, cash equivalents and restricted cash at end of period | $ | 95,823 | $ | 123,011 | |||
Supplemental disclosure of cash flow information: | |||||||
Accrued capital expenditures | $ | (8,623 | ) | $ | (1,934 | ) | |
Cash paid during the period for: | |||||||
Interest, net of capitalized interest | $ | 21,602 | $ | 19,142 | |||
Income taxes, net of refunds | $ | 2,894 | $ | 7,120 | |||
Non-cash operating activities | |||||||
Operating lease right of use asset obtained in exchange for new lease liabilities | $ | 4,794 | $ | — | |||
Non-cash financing activities | |||||||
Debt issued for assets | $ | — | $ | 17 |
(1) | General |
(2) | Summary of Significant Accounting Policies |
(a) | Basis of Presentation |
(b) | Fiscal Periods |
(c) | Cash, Cash Equivalents and Restricted Cash |
March 30, 2019 | December 29, 2018 | ||||||
Cash and cash equivalents | $ | 95,716 | $ | 107,262 | |||
Restricted cash | 107 | 107 | |||||
Total cash, cash equivalents and restricted cash shown in the consolidated statements of cash flow | $ | 95,823 | $ | 107,369 |
(d) | Accounts Receivable and Allowance for Doubtful Accounts |
(e) | Revenue Recognition |
(f) | Foreign Currency Translation and Remeasurement |
(g) | Leases |
(h) | Earnings Per Share |
Net Income per Common Share (in thousands, except per share data) | |||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||
March 30, 2019 | March 31, 2018 | ||||||||||||||||||||
Income | Shares | Per Share | Income | Shares | Per Share | ||||||||||||||||
Basic: | |||||||||||||||||||||
Net Income attributable to Darling | $ | 18,012 | 164,855 | $ | 0.11 | $ | 97,305 | 164,772 | $ | 0.59 | |||||||||||
Diluted: | |||||||||||||||||||||
Effect of dilutive securities: | |||||||||||||||||||||
Add: Option shares in the money and dilutive effect of non-vested stock awards | 6,127 | 5,071 | |||||||||||||||||||
Less: Pro forma treasury shares | (2,322 | ) | (2,101 | ) | |||||||||||||||||
Diluted: | |||||||||||||||||||||
Net income attributable to Darling | $ | 18,012 | 168,660 | $ | 0.11 | $ | 97,305 | 167,742 | $ | 0.58 |
(3) | Investment in Unconsolidated Subsidiaries |
(in thousands) | March 31, 2019 | December 31, 2018 | |||||
Assets: | |||||||
Total current assets | $ | 225,948 | $ | 186,258 | |||
Property, plant and equipment, net | 591,927 | 576,384 | |||||
Other assets | 26,427 | 24,601 | |||||
Total assets | $ | 844,302 | $ | 787,243 | |||
Liabilities and members' equity: | |||||||
Total current portion of long term debt | $ | 276 | $ | 189 | |||
Total other current liabilities | 44,440 | 40,619 | |||||
Total long term debt | 9,010 | 8,485 | |||||
Total other long term liabilities | 4,612 | 539 | |||||
Total members' equity | 785,964 | 737,411 | |||||
Total liabilities and members' equity | $ | 844,302 | $ | 787,243 |
Three Months Ended | |||||||
(in thousands) | March 31, 2019 | March 31, 2018 | |||||
Revenues: | |||||||
Operating revenues | $ | 302,718 | $ | 150,321 | |||
Expenses: | |||||||
Total costs and expenses less depreciation, amortization and accretion expense | 243,063 | (49,821 | ) | ||||
Depreciation, amortization and accretion expense | 11,418 | 6,120 | |||||
Total costs and expenses | 254,481 | (43,701 | ) | ||||
Operating income | 48,237 | 194,022 | |||||
Other income | 641 | 377 | |||||
Interest and debt expense, net | (324 | ) | — | ||||
Net income | $ | 48,554 | $ | 194,399 |
(4) | Acquisitions and Dispositions |
(5) | Inventories |
March 30, 2019 | December 29, 2018 | ||||||
Finished product | $ | 176,451 | $ | 176,184 | |||
Work in process | 81,242 | 78,501 | |||||
Raw material | 27,723 | 32,502 | |||||
Supplies and other | 54,466 | 53,841 | |||||
$ | 339,882 | $ | 341,028 |
(6) | Intangible Assets |
March 30, 2019 | December 29, 2018 | ||||||
Indefinite Lived Intangible Assets | |||||||
Trade names | $ | 52,926 | $ | 53,472 | |||
52,926 | 53,472 | ||||||
Finite Lived Intangible Assets: | |||||||
Routes | 380,442 | 386,724 | |||||
Permits | 485,119 | 486,359 | |||||
Non-compete agreements | 3,778 | 3,784 | |||||
Trade names | 65,670 | 72,570 | |||||
Royalty, consulting, land use rights and leasehold | 19,065 | 16,528 | |||||
954,074 | 965,965 | ||||||
Accumulated Amortization: | |||||||
Routes | (146,415 | ) | (145,702 | ) | |||
Permits | (246,460 | ) | (238,123 | ) | |||
Non-compete agreements | (2,635 | ) | (2,501 | ) | |||
Trade names | (27,979 | ) | (33,242 | ) | |||
Royalty, consulting, land use rights and leasehold | (4,198 | ) | (4,007 | ) | |||
(427,687 | ) | (423,575 | ) | ||||
Total Intangible assets, less accumulated amortization | $ | 579,313 | $ | 595,862 |
(7) | Goodwill |
Feed Ingredients | Food Ingredients | Fuel Ingredients | Total | |||||||||
Balance at December 29, 2018 | ||||||||||||
Goodwill | $ | 791,966 | $ | 335,701 | $ | 117,867 | $ | 1,245,534 | ||||
Accumulated impairment losses | (15,914 | ) | (461 | ) | — | (16,375 | ) | |||||
776,052 | 335,240 | 117,867 | 1,229,159 | |||||||||
Goodwill acquired during year | 396 | 91 | — | 487 | ||||||||
Foreign currency translation | (1,306 | ) | (4,548 | ) | (1,410 | ) | (7,264 | ) | ||||
Balance at March 30, 2019 | ||||||||||||
Goodwill | 791,056 | 331,244 | 116,457 | 1,238,757 | ||||||||
Accumulated impairment losses | (15,914 | ) | (461 | ) | — | (16,375 | ) | |||||
$ | 775,142 | $ | 330,783 | $ | 116,457 | $ | 1,222,382 |
(8) | Accrued Expenses |
March 30, 2019 | December 29, 2018 | ||||||
Compensation and benefits | $ | 75,568 | $ | 91,851 | |||
Accrued income, ad valorem, and franchise taxes | 24,463 | 31,366 | |||||
Accrued operating expenses | 59,763 | 62,247 | |||||
Customer deposits | 31,563 | 30,741 | |||||
Other accrued expense | 89,974 | 93,279 | |||||
$ | 281,331 | $ | 309,484 |
(9) | Leases |
Three months Ended | |||
March 30, 2019 | |||
Operating lease expense | $ | 12,317 | |
Short-term lease costs | 3,053 | ||
Total lease cost | $ | 15,370 |
Cash paid for amounts included in the measurement lease liabilities | |||
Operating cash flows from operating leases | $ | 12,029 | |
As of March 30, 2019 | |||
Operating right-of-use assets, net | $ | 129,721 | |
Operating lease liability, current | $ | 39,776 | |
Operating lease liability, non-current | 89,100 | ||
Total operating lease liabilities | $ | 128,876 | |
Weighted average remaining lease term - operating leases | 6.3 years | ||
Weighted average discount rate - operating leases | 5.26 | % |
Period Ending Fiscal | Operating Leases | Capital Leases | ||||
2019 (excluding the three months ended March 30, 2019) | $ | 34,356 | $ | 217 | ||
2020 | 35,776 | 153 | ||||
2021 | 23,580 | 6 | ||||
2022 | 14,338 | 6 | ||||
2023 | 9,734 | — | ||||
Thereafter | 36,564 | — | ||||
$ | 154,348 | $ | 382 | |||
Less amounts representing interest | $ | (25,472 | ) | (16 | ) | |
Lease obligations included in current and long-term liabilities | $ | 128,876 | $ | 366 |
Period Ending Fiscal | Operating Leases | Capital Leases | ||||
2019 | $ | 46,316 | $ | 271 | ||
2020 | 34,403 | 152 | ||||
2021 | 22,252 | 6 | ||||
2022 | 13,091 | 6 | ||||
2023 | 8,478 | — | ||||
Thereafter | 28,219 | — | ||||
$ | 152,759 | $ | 435 | |||
Less amounts representing interest | (20 | ) | ||||
Capital lease obligation included in current and long-term debt | $ | 415 |
(10) | Debt |
March 30, 2019 | December 29, 2018 | ||||||
Amended Credit Agreement: | |||||||
Revolving Credit Facility ($37.1 million and $32.1 million denominated in euro at March 30, 2019 and December 29, 2018, respectively) | $ | 50,061 | $ | 32,105 | |||
Term Loan A ($22.8 million and $29.8 million denominated in CAD at March 30, 2019 and December 29, 2018, respectively) | 61,030 | 68,080 | |||||
Less unamortized deferred loan costs | (316 | ) | (381 | ) | |||
Carrying value Term Loan A | 60,714 | 67,699 | |||||
Term Loan B | 495,000 | 495,000 | |||||
Less unamortized deferred loan costs | (8,741 | ) | (9,024 | ) | |||
Carrying value Term Loan B | 486,259 | 485,976 | |||||
5.375% Senior Notes due 2022 with effective interest of 5.72% | 500,000 | 500,000 | |||||
Less unamortized deferred loan costs | (4,503 | ) | (4,876 | ) | |||
Carrying value 5.375% Senior Notes due 2022 | 495,497 | 495,124 | |||||
3.625% Senior Notes due 2026 - Denominated in euro with effective interest of 3.83% | 578,371 | 590,499 | |||||
Less unamortized deferred loan costs - Denominated in euro | (7,753 | ) | (8,160 | ) | |||
Carrying value 3.625% Senior Notes due 2026 | 570,618 | 582,339 | |||||
Other Notes and Obligations | 24,307 | 11,189 | |||||
1,687,456 | 1,674,432 | ||||||
Less Current Maturities | 23,693 | 7,492 | |||||
$ | 1,663,763 | $ | 1,666,940 |
(11) | Income Taxes |
(12) | Other Comprehensive Income/(Loss) |
Three Months Ended | ||||||||||||||||||
Before-Tax | Tax (Expense) | Net-of-Tax | ||||||||||||||||
Amount | or Benefit | Amount | ||||||||||||||||
March 30, 2019 | March 31, 2018 | March 30, 2019 | March 31, 2018 | March 30, 2019 | March 31, 2018 | |||||||||||||
Defined benefit pension plans | ||||||||||||||||||
Amortization of prior service cost/(benefit) | $ | 9 | $ | 9 | $ | (3 | ) | $ | (3 | ) | $ | 6 | $ | 6 | ||||
Amortization of actuarial loss | 1,146 | 888 | (294 | ) | (227 | ) | 852 | 661 | ||||||||||
Total defined benefit pension plans | 1,155 | 897 | (297 | ) | (230 | ) | 858 | 667 | ||||||||||
Natural gas swap derivatives | ||||||||||||||||||
Loss/(gain) reclassified to net income | — | 14 | — | (4 | ) | — | 10 | |||||||||||
Gain/(loss) activity recognized in other comprehensive income/(loss) | — | 16 | — | (4 | ) | — | 12 | |||||||||||
Total natural gas swap derivatives | — | 30 | — | (8 | ) | — | 22 | |||||||||||
Corn option derivatives | ||||||||||||||||||
Loss/(gain) reclassified to net income | — | (668 | ) | — | 173 | — | (495 | ) | ||||||||||
Gain/(loss) activity recognized in other comprehensive income/(loss) | — | (1,497 | ) | — | 387 | — | (1,110 | ) | ||||||||||
Total corn option derivatives | — | (2,165 | ) | — | 560 | — | (1,605 | ) | ||||||||||
Foreign exchange derivatives | ||||||||||||||||||
Gain/(loss) activity recognized in other comprehensive income/(loss) | (2,934 | ) | — | 997 | — | (1,937 | ) | — | ||||||||||
Total foreign exchange derivatives | (2,934 | ) | — | 997 | — | (1,937 | ) | — | ||||||||||
Foreign currency translation | (5,393 | ) | 17,295 | 507 | — | (4,886 | ) | 17,295 | ||||||||||
Other comprehensive income/(loss) | $ | (7,172 | ) | $ | 16,057 | $ | 1,207 | $ | 322 | $ | (5,965 | ) | $ | 16,379 |
Three Months Ended | |||||||
March 30, 2019 | March 31, 2018 | Statement of Operations Classification | |||||
Derivative instruments | |||||||
Natural gas swap derivatives | $ | — | $ | (14 | ) | Cost of sales and operating expenses | |
Corn option derivatives | — | 668 | Cost of sales and operating expenses | ||||
— | 654 | Total before tax | |||||
— | (169 | ) | Income taxes | ||||
— | 485 | Net of tax | |||||
Defined benefit pension plans | |||||||
Amortization of prior service cost | $ | (9 | ) | $ | (9 | ) | (a) |
Amortization of actuarial loss | (1,146 | ) | (888 | ) | (a) | ||
(1,155 | ) | (897 | ) | Total before tax | |||
297 | 230 | Income taxes | |||||
(858 | ) | (667 | ) | Net of tax | |||
Total reclassifications | $ | (858 | ) | $ | (182 | ) | Net of tax |
(a) | These items are included in the computation of net periodic pension cost. See Note 14 Employee Benefit Plans for additional information. |
Three Months Ended March 30, 2019 | |||||||||||||
Foreign Currency | Derivative | Defined Benefit | |||||||||||
Translation | Instruments | Pension Plans | Total | ||||||||||
Accumulated Other Comprehensive Income/(loss) December 29, 2018, attributable to Darling, net of tax | $ | (270,081 | ) | $ | 1,081 | $ | (35,539 | ) | $ | (304,539 | ) | ||
Other comprehensive gain/(loss) before reclassifications | (4,886 | ) | (1,937 | ) | — | (6,823 | ) | ||||||
Amounts reclassified from accumulated other comprehensive income/(loss) | — | — | 858 | 858 | |||||||||
Net current-period other comprehensive income/(loss) | (4,886 | ) | (1,937 | ) | 858 | (5,965 | ) | ||||||
Noncontrolling interest | 1,759 | — | — | 1,759 | |||||||||
Accumulated Other Comprehensive Income/(loss) March 30, 2019, attributable to Darling, net of tax | (276,726 | ) | $ | (856 | ) | $ | (34,681 | ) | $ | (312,263 | ) |
Pension Benefits | ||||||
Three Months Ended | ||||||
March 30, 2019 | March 31, 2018 | |||||
Service cost | $ | 678 | $ | 799 | ||
Interest cost | 1,710 | 1,625 | ||||
Expected return on plan assets | (1,819 | ) | (2,064 | ) | ||
Amortization of prior service cost | 9 | 9 | ||||
Amortization of net loss | 1,146 | 888 | ||||
Net pension cost | $ | 1,724 | $ | 1,257 |
(15) | Derivatives |
Functional Currency | Contract Currency | |||||
Type | Amount | Type | Amount | |||
Brazilian real | 49,321 | Euro | 10,988 | |||
Brazilian real | 1,171,313 | U.S. dollar | 330,455 | |||
Euro | 44,675 | U.S. dollar | 51,207 | |||
Euro | 22,121 | Polish zloty | 95,280 | |||
Euro | 6,098 | Japanese yen | 768,000 | |||
Euro | 38,245 | Chinese renminbi | 294,273 | |||
Euro | 13,632 | Australian dollar | 21,850 | |||
Euro | 4,573 | British pound | 3,961 | |||
Polish zloty | 22,168 | Euro | 5,156 | |||
British pound | 276 | Euro | 322 | |||
Japanese yen | 296,912 | U.S. dollar | 2,710 | |||
U.S. dollar | 821 | Japanese yen | 90,000 |
Loss or (Gain) Recognized in Income on Derivatives Not Designated as Hedges | |||||||||
Three Months Ended | |||||||||
Derivatives not designated as hedging instruments | Location | March 30, 2019 | March 31, 2018 | ||||||
Foreign exchange | Foreign currency loss | $ | 1,871 | $ | 1,654 | ||||
Foreign exchange | Net sales | 296 | — | ||||||
Foreign exchange | Cost of sales and operating expenses | (245 | ) | — | |||||
Foreign exchange | Selling, general and administrative expense | 873 | 489 | ||||||
Corn options and futures | Net sales | 350 | (309 | ) | |||||
Corn options and futures | Cost of sales and operating expenses | (873 | ) | 512 | |||||
Heating Oil swaps and options | Cost of sales and operating expenses | (506 | ) | — | |||||
Total | $ | 1,766 | $ | 2,346 |
Fair Value Measurements at March 30, 2019 Using | ||||||||||||
Quoted Prices in Active Markets for Identical Assets | Significant Other Observable Inputs | Significant Unobservable Inputs | ||||||||||
(In thousands of dollars) | Total | (Level 1) | (Level 2) | (Level 3) | ||||||||
Assets: | ||||||||||||
Derivative instruments | $ | 5,922 | $ | — | $ | 5,922 | $ | — | ||||
Total Assets | $ | 5,922 | $ | — | $ | 5,922 | $ | — | ||||
Liabilities: | ||||||||||||
Derivative instruments | $ | 2,987 | $ | — | $ | 2,987 | $ | — | ||||
5.375% Senior notes | 507,500 | — | 507,500 | — | ||||||||
3.625% Senior notes | 599,886 | — | 599,886 | — | ||||||||
Term loan A | 60,725 | — | 60,725 | — | ||||||||
Term loan B | 494,381 | — | 494,381 | — | ||||||||
Revolver debt | 49,310 | — | 49,310 | — | ||||||||
Total Liabilities | $ | 1,714,789 | $ | — | $ | 1,714,789 | $ | — |
Fair Value Measurements at December 29, 2018 Using | ||||||||||||
Quoted Prices in Active Markets for Identical Assets | Significant Other Observable Inputs | Significant Unobservable Inputs | ||||||||||
(In thousands of dollars) | Total | (Level 1) | (Level 2) | (Level 3) | ||||||||
Assets: | ||||||||||||
Derivative instruments | $ | 4,307 | $ | — | $ | 4,307 | $ | — | ||||
Total Assets | $ | 4,307 | $ | — | $ | 4,307 | $ | — | ||||
Liabilities: | ||||||||||||
Derivative instruments | $ | 3,235 | $ | — | $ | 3,235 | $ | — | ||||
5.375% Senior notes | 495,000 | — | 495,000 | — | ||||||||
3.625% Senior notes | 585,303 | — | 585,303 | — | ||||||||
Term loan A | 67,739 | — | 67,739 | — | ||||||||
Term loan B | 492,525 | — | 492,525 | — | ||||||||
Revolver debt | 31,623 | — | 31,623 | — | ||||||||
Total Liabilities | $ | 1,675,425 | $ | — | $ | 1,675,425 | $ | — |
(17) | Contingencies |
(18) | Business Segments |
Feed Ingredients | Food Ingredients | Fuel Ingredients | Corporate | Total | |||||||||||
Three Months Ended March 30, 2019 | |||||||||||||||
Net Sales | $ | 495,819 | $ | 279,164 | $ | 60,121 | $ | — | $ | 835,104 | |||||
Cost of sales and operating expenses | 382,468 | 214,118 | 50,077 | — | 646,663 | ||||||||||
Gross Margin | 113,351 | 65,046 | 10,044 | — | 188,441 | ||||||||||
Selling, general and administrative expenses | 48,831 | 21,887 | (754 | ) | 15,039 | 85,003 | |||||||||
Depreciation and amortization | 49,369 | 19,511 | 7,798 | 2,486 | 79,164 | ||||||||||
Segment operating income/(loss) | 15,151 | 23,648 | 3,000 | (17,525 | ) | 24,274 | |||||||||
Equity in net income/(loss) of unconsolidated subsidiaries | (504 | ) | — | 24,277 | — | 23,773 | |||||||||
Segment income/(loss) | 14,647 | 23,648 | 27,277 | (17,525 | ) | 48,047 | |||||||||
Total other expense | (23,133 | ) | |||||||||||||
Loss before income taxes | $ | 24,914 | |||||||||||||
Segment assets at March 30, 2019 | $ | 2,583,753 | $ | 1,394,049 | $ | 794,467 | $ | 222,785 | $ | 4,995,054 |
Feed Ingredients | Food Ingredients | Fuel Ingredients | Corporate | Total | |||||||||||
Three Months Ended March 31, 2018 | |||||||||||||||
Net Sales | $ | 485,798 | $ | 305,520 | $ | 84,056 | $ | — | $ | 875,374 | |||||
Cost of sales and operating expenses | 369,088 | 249,185 | 59,826 | — | 678,099 | ||||||||||
Gross Margin | 116,710 | 56,335 | 24,230 | — | 197,275 | ||||||||||
Selling, general and administrative expenses | 48,265 | 23,861 | (1,398 | ) | 16,174 | 86,902 | |||||||||
Depreciation and amortization | 46,789 | 20,640 | 8,471 | 2,719 | 78,619 | ||||||||||
Segment operating income/(loss) | 21,656 | 11,834 | 17,157 | (18,893 | ) | 31,754 | |||||||||
Equity in net income/(loss) of unconsolidated subsidiaries | (45 | ) | — | 97,199 | — | 97,154 | |||||||||
Segment income/(loss) | 21,611 | 11,834 | 114,356 | (18,893 | ) | 128,908 | |||||||||
Total other expense | (27,121 | ) | |||||||||||||
Income before income taxes | $ | 101,787 | |||||||||||||
Segment assets at December 29, 2018 | $ | 2,566,106 | $ | 1,401,291 | $ | 761,817 | $ | 160,140 | $ | 4,889,354 |
(19) | Revenue |
Three Months Ended March 30, 2019 | ||||||||||||
Feed Ingredients | Food Ingredients | Fuel Ingredients | Total | |||||||||
Geographic Area | ||||||||||||
North America | $ | 410,237 | $ | 48,813 | $ | 5,710 | $ | 464,760 | ||||
Europe | 79,998 | 151,652 | 54,411 | 286,061 | ||||||||
China | 2,952 | 46,937 | — | 49,889 | ||||||||
South America | — | 12,669 | — | 12,669 | ||||||||
Other | 2,632 | 19,093 | — | 21,725 | ||||||||
Net sales | $ | 495,819 | $ | 279,164 | $ | 60,121 | $ | 835,104 | ||||
Major product types | ||||||||||||
Fats | $ | 144,876 | $ | 35,138 | $ | — | $ | 180,014 | ||||
Used cooking oil | 45,406 | — | — | 45,406 | ||||||||
Proteins | 205,813 | — | — | 205,813 | ||||||||
Bakery | 45,656 | — | — | 45,656 | ||||||||
Other rendering | 41,254 | — | — | 41,254 | ||||||||
Food ingredients | — | 221,908 | — | 221,908 | ||||||||
Bioenergy | — | — | 54,411 | 54,411 | ||||||||
Biofuels | — | — | 5,710 | 5,710 | ||||||||
Other | 12,814 | 22,118 | — | 34,932 | ||||||||
Net sales | $ | 495,819 | $ | 279,164 | $ | 60,121 | $ | 835,104 |
Three Months Ended March 31, 2018 | ||||||||||||
Feed Ingredients | Food Ingredients | Fuel Ingredients | Total | |||||||||
Geographic Area Revenues | ||||||||||||
North America | $ | 390,376 | $ | 44,277 | $ | 21,540 | $ | 456,193 | ||||
Europe | 87,790 | 183,639 | 62,516 | 333,945 | ||||||||
China | 5,678 | 43,912 | — | 49,590 | ||||||||
South America | — | 14,344 | — | 14,344 | ||||||||
Other | 1,954 | 19,348 | — | 21,302 | ||||||||
Net sales | $ | 485,798 | $ | 305,520 | $ | 84,056 | $ | 875,374 | ||||
Major product types | ||||||||||||
Fats | $ | 143,552 | $ | 44,819 | $ | — | $ | 188,371 | ||||
Used cooking oil | 36,608 | — | — | 36,608 | ||||||||
Proteins | 203,395 | — | — | 203,395 | ||||||||
Bakery | 46,751 | — | — | 46,751 | ||||||||
Other rendering | 31,362 | — | — | 31,362 | ||||||||
Food ingredients | — | 233,923 | — | 233,923 | ||||||||
Bioenergy | — | — | 62,516 | 62,516 | ||||||||
Biofuels | — | — | 21,540 | 21,540 | ||||||||
Other | 24,130 | 26,778 | — | 50,908 | ||||||||
Net sales | $ | 485,798 | $ | 305,520 | $ | 84,056 | $ | 875,374 |
(20) | Related Party Transactions |
Parent | Guarantors | Non-guarantors | Eliminations | Consolidated | |||||||||||
ASSETS | |||||||||||||||
Cash and cash equivalents | $ | 987 | $ | 33 | $ | 94,696 | $ | — | $ | 95,716 | |||||
Restricted cash | 103 | — | 4 | — | 107 | ||||||||||
Accounts receivable | 43,885 | 640,838 | 468,164 | (781,548 | ) | 371,339 | |||||||||
Inventories | 19,211 | 85,113 | 235,558 | — | 339,882 | ||||||||||
Income taxes refundable | 1,426 | — | 2,676 | — | 4,102 | ||||||||||
Prepaid expenses | 12,155 | 2,508 | 24,407 | — | 39,070 | ||||||||||
Other current assets | 3,355 | (1,980 | ) | 19,584 | — | 20,959 | |||||||||
Total current assets | 81,122 | 726,512 | 845,089 | (781,548 | ) | 871,175 | |||||||||
Investment in subsidiaries | 4,934,820 | 1,366,126 | 844,044 | (7,144,990 | ) | — | |||||||||
Property, plant and equipment, net | 392,718 | 503,739 | 795,101 | — | 1,691,558 | ||||||||||
Intangible assets, net | 48,619 | 193,338 | 337,356 | — | 579,313 | ||||||||||
Goodwill | 49,902 | 490,748 | 681,732 | — | 1,222,382 | ||||||||||
Investment in unconsolidated subsidiaries | 13,078 | — | 420,303 | — | 433,381 | ||||||||||
Operating lease right-of-use asset | 75,150 | 34,974 | 19,597 | — | 129,721 | ||||||||||
Other assets | 38,490 | 140 | 14,857 | — | 53,487 | ||||||||||
Deferred taxes | — | — | 14,037 | — | 14,037 | ||||||||||
$ | 5,633,899 | $ | 3,315,577 | $ | 3,972,116 | $ | (7,926,538 | ) | $ | 4,995,054 | |||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||||||
Current portion of long-term debt | $ | 11,908 | $ | 5 | $ | 11,780 | $ | — | $ | 23,693 | |||||
Accounts payable | 807,675 | 27,833 | 138,539 | (781,536 | ) | 192,511 | |||||||||
Income taxes payable | 300 | — | 8,561 | — | 8,861 | ||||||||||
Current operating lease liability | 21,546 | 10,673 | 7,557 | — | 39,776 | ||||||||||
Accrued expenses | 85,734 | 27,109 | 168,500 | (12 | ) | 281,331 | |||||||||
Total current liabilities | 927,163 | 65,620 | 334,937 | (781,548 | ) | 546,172 | |||||||||
Long-term debt, net of current portion | 1,032,803 | 16 | 630,944 | — | 1,663,763 | ||||||||||
Long-term operating lease liability | 53,587 | 23,701 | 11,812 | — | 89,100 | ||||||||||
Other noncurrent liabilities | 78,220 | — | 35,764 | — | 113,984 | ||||||||||
Deferred income taxes | 95,191 | — | 130,145 | — | 225,336 | ||||||||||
Total liabilities | 2,186,964 | 89,337 | 1,143,602 | (781,548 | ) | 2,638,355 | |||||||||
Total stockholders’ equity | 3,446,935 | 3,226,240 | 2,828,514 | (7,144,990 | ) | 2,356,699 | |||||||||
$ | 5,633,899 | $ | 3,315,577 | $ | 3,972,116 | $ | (7,926,538 | ) | $ | 4,995,054 |
Parent | Guarantors | Non-guarantors | Eliminations | Consolidated | |||||||||||
ASSETS | |||||||||||||||
Cash and cash equivalents | $ | 995 | $ | 32 | $ | 106,235 | $ | — | $ | 107,262 | |||||
Restricted cash | 103 | — | 4 | — | 107 | ||||||||||
Accounts receivable | 56,113 | 619,628 | 461,005 | (751,009 | ) | 385,737 | |||||||||
Inventories | 23,752 | 83,261 | 234,015 | — | 341,028 | ||||||||||
Income taxes refundable | 2,851 | — | 3,611 | — | 6,462 | ||||||||||
Prepaid expenses | 12,890 | 2,936 | 19,421 | — | 35,247 | ||||||||||
Other current assets | 2,680 | (1,418 | ) | 20,837 | — | 22,099 | |||||||||
Total current assets | 99,384 | 704,439 | 845,128 | (751,009 | ) | 897,942 | |||||||||
Investment in subsidiaries | 4,880,193 | 1,366,126 | 844,044 | (7,090,363 | ) | — | |||||||||
Property, plant and equipment, net | 375,824 | 503,130 | 808,904 | — | 1,687,858 | ||||||||||
Intangible assets, net | 50,132 | 200,936 | 344,794 | — | 595,862 | ||||||||||
Goodwill | 49,506 | 490,748 | 688,905 | — | 1,229,159 | ||||||||||
Investment in unconsolidated subsidiary | 13,969 | — | 396,208 | — | 410,177 | ||||||||||
Other assets | 39,395 | 138 | 13,842 | — | 53,375 | ||||||||||
Deferred income taxes | — | — | 14,981 | — | 14,981 | ||||||||||
$ | 5,508,403 | $ | 3,265,517 | $ | 3,956,806 | $ | (7,841,372 | ) | $ | 4,889,354 | |||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||||||
Current portion of long-term debt | $ | 3,558 | $ | 5 | $ | 3,929 | $ | — | $ | 7,492 | |||||
Accounts payable | 783,406 | 24,388 | 162,678 | (750,993 | ) | 219,479 | |||||||||
Income taxes payable | (10 | ) | — | 4,053 | — | 4,043 | |||||||||
Accrued expenses | 107,572 | 33,387 | 168,541 | (16 | ) | 309,484 | |||||||||
Total current liabilities | 894,526 | 57,780 | 339,201 | (751,009 | ) | 540,498 | |||||||||
Long-term debt, net of current portion | 1,019,130 | 18 | 647,792 | — | 1,666,940 | ||||||||||
Other noncurrent liabilities | 78,589 | — | 36,443 | — | 115,032 | ||||||||||
Deferred income taxes | 95,710 | — | 135,353 | — | 231,063 | ||||||||||
Total liabilities | 2,087,955 | 57,798 | 1,158,789 | (751,009 | ) | 2,553,533 | |||||||||
Total stockholders’ equity | 3,420,448 | 3,207,719 | 2,798,017 | (7,090,363 | ) | 2,335,821 | |||||||||
$ | 5,508,403 | $ | 3,265,517 | $ | 3,956,806 | $ | (7,841,372 | ) | $ | 4,889,354 |
Parent | Guarantors | Non-guarantors | Eliminations | Consolidated | |||||||||||
Net sales | $ | 160,230 | $ | 329,991 | $ | 403,911 | $ | (59,028 | ) | $ | 835,104 | ||||
Cost and expenses: | |||||||||||||||
Cost of sales and operating expenses | 128,392 | 267,194 | 310,105 | (59,028 | ) | 646,663 | |||||||||
Selling, general and administrative expenses | 47,423 | 11,947 | 25,633 | — | 85,003 | ||||||||||
Depreciation and amortization | 14,373 | 26,112 | 38,679 | — | 79,164 | ||||||||||
Total costs and expenses | 190,188 | 305,253 | 374,417 | (59,028 | ) | 810,830 | |||||||||
Operating income/(loss) | (29,958 | ) | 24,738 | 29,494 | — | 24,274 | |||||||||
Interest expense | (14,027 | ) | (32 | ) | (5,817 | ) | — | (19,876 | ) | ||||||
Foreign currency losses | (4 | ) | — | (728 | ) | — | (732 | ) | |||||||
Gain on disposal of subsidiary | — | — | — | — | — | ||||||||||
Other expense, net | (1,567 | ) | (1,212 | ) | 254 | — | (2,525 | ) | |||||||
Equity in net loss of unconsolidated subsidiaries | (891 | ) | — | 24,664 | — | 23,773 | |||||||||
Earnings in investments in subsidiaries | 54,627 | — | — | (54,627 | ) | — | |||||||||
Income/(loss) before taxes | 8,180 | 23,494 | 47,867 | (54,627 | ) | 24,914 | |||||||||
Income tax expense/(benefit) | (9,832 | ) | 4,973 | 10,133 | — | 5,274 | |||||||||
Net income attributable to noncontrolling interests | — | — | (1,628 | ) | — | (1,628 | ) | ||||||||
Net income/(loss) attributable to Darling | $ | 18,012 | $ | 18,521 | $ | 36,106 | $ | (54,627 | ) | $ | 18,012 |
Parent | Guarantors | Non-guarantors | Eliminations | Consolidated | |||||||||||
Net sales | $ | 119,625 | $ | 344,603 | $ | 467,808 | $ | (56,662 | ) | $ | 875,374 | ||||
Cost and expenses: | |||||||||||||||
Cost of sales and operating expenses | 95,868 | 271,237 | 367,656 | (56,662 | ) | 678,099 | |||||||||
Selling, general and administrative expenses | 43,778 | 12,837 | 30,287 | — | 86,902 | ||||||||||
Depreciation and amortization | 11,059 | 26,291 | 41,269 | — | 78,619 | ||||||||||
Total costs and expenses | 150,705 | 310,365 | 439,212 | (56,662 | ) | 843,620 | |||||||||
Operating income/(loss) | (31,080 | ) | 34,238 | 28,596 | — | 31,754 | |||||||||
Interest expense | (14,364 | ) | 3,763 | (12,523 | ) | — | (23,124 | ) | |||||||
Foreign currency gains/(losses) | (23 | ) | (63 | ) | (1,395 | ) | — | (1,481 | ) | ||||||
Other income/(expense), net | (3,410 | ) | (1,326 | ) | 2,220 | — | (2,516 | ) | |||||||
Equity in net income/(loss) of unconsolidated subsidiaries | (498 | ) | — | 97,652 | — | 97,154 | |||||||||
Earnings in investments in subsidiaries | 144,880 | — | — | (144,880 | ) | — | |||||||||
Income/(loss) before taxes | 95,505 | 36,612 | 114,550 | (144,880 | ) | 101,787 | |||||||||
Income tax expense/(benefit) | (1,800 | ) | 1,335 | 4,177 | — | 3,712 | |||||||||
Net income attributable to noncontrolling interests | — | — | (770 | ) | — | (770 | ) | ||||||||
Net income/(loss) attributable to Darling | $ | 97,305 | $ | 35,277 | $ | 109,603 | $ | (144,880 | ) | $ | 97,305 |
Parent | Guarantors | Non-guarantors | Eliminations | Consolidated | |||||||||||
Net income/(loss) | $ | 19,640 | $ | 18,521 | $ | 36,106 | $ | (54,627 | ) | $ | 19,640 | ||||
Other comprehensive income/(loss), net of tax: | |||||||||||||||
Foreign currency translation | 507 | — | (5,393 | ) | — | (4,886 | ) | ||||||||
Pension adjustments | 767 | — | 91 | — | 858 | ||||||||||
Foreign exchange derivative adjustments | — | — | (1,937 | ) | — | (1,937 | ) | ||||||||
Total other comprehensive income/(loss), net of tax | 1,274 | — | (7,239 | ) | — | (5,965 | ) | ||||||||
Total comprehensive income/(loss) | 20,914 | 18,521 | 28,867 | (54,627 | ) | 13,675 | |||||||||
Total comprehensive loss attributable to noncontrolling interest | — | — | 3,387 | — | 3,387 | ||||||||||
Total comprehensive income/(loss) attributable to Darling | $ | 20,914 | $ | 18,521 | $ | 25,480 | $ | (54,627 | ) | $ | 10,288 |
Parent | Guarantors | Non-guarantors | Eliminations | Consolidated | |||||||||||
Net income/(loss) | $ | 98,075 | $ | 35,277 | $ | 109,603 | $ | (144,880 | ) | $ | 98,075 | ||||
Other comprehensive income/(loss), net of tax: | |||||||||||||||
Foreign currency translation | — | — | 17,295 | — | 17,295 | ||||||||||
Pension adjustments | 566 | — | 101 | — | 667 | ||||||||||
Natural gas swap derivative adjustments | 22 | — | — | — | 22 | ||||||||||
Corn option derivative adjustments | (1,605 | ) | — | — | — | (1,605 | ) | ||||||||
Total other comprehensive income/(loss), net of tax | (1,017 | ) | — | 17,396 | — | 16,379 | |||||||||
Total comprehensive income/(loss) | 97,058 | 35,277 | 126,999 | (144,880 | ) | 114,454 | |||||||||
Total comprehensive income attributable to noncontrolling interest | — | — | 1,287 | — | 1,287 | ||||||||||
Total comprehensive income/(loss) attributable to Darling | $ | 97,058 | $ | 35,277 | $ | 125,712 | $ | (144,880 | ) | $ | 113,167 |
Parent | Guarantors | Non-guarantors | Eliminations | Consolidated | |||||||||||
Cash flows from operating activities: | |||||||||||||||
Net income/(loss) | $ | 19,640 | $ | 18,521 | $ | 36,106 | $ | (54,627 | ) | $ | 19,640 | ||||
Earnings in investments in subsidiaries | (54,627 | ) | — | — | 54,627 | — | |||||||||
Other operating cash flows | 52,135 | (2,881 | ) | (20,293 | ) | — | 28,961 | ||||||||
Net cash provided by operating activities | 17,148 | 15,640 | 15,813 | — | 48,601 | ||||||||||
Cash flows from investing activities: | |||||||||||||||
Capital expenditures | (34,303 | ) | (23,498 | ) | (26,468 | ) | — | (84,269 | ) | ||||||
Acquisitions | (1,157 | ) | — | (274 | ) | — | (1,431 | ) | |||||||
Gross proceeds from sale of property, plant and equipment and other assets | 132 | 7,016 | 720 | — | 7,868 | ||||||||||
Proceeds from insurance settlements | — | 845 | — | — | 845 | ||||||||||
Payments related to routes and other intangibles | — | — | (2,778 | ) | — | (2,778 | ) | ||||||||
Net cash used in investing activities | (35,328 | ) | (15,637 | ) | (28,800 | ) | — | (79,765 | ) | ||||||
Cash flows from financing activities: | |||||||||||||||
Proceeds for long-term debt | — | — | 2,138 | — | 2,138 | ||||||||||
Payments on long-term debt | — | (2 | ) | (10,972 | ) | — | (10,974 | ) | |||||||
Borrowings from revolving facilities | 50,000 | — | 106,829 | — | 156,829 | ||||||||||
Payments on revolving facilities | (37,000 | ) | — | (101,147 | ) | — | (138,147 | ) | |||||||
Net cash overdraft financing | 8,350 | — | 6,175 | — | 14,525 | ||||||||||
Issuances of common stock | 12 | — | — | — | 12 | ||||||||||
Minimum withholding taxes paid on stock awards | (3,190 | ) | — | — | — | (3,190 | ) | ||||||||
Net cash provided/(used) in financing activities | 18,172 | (2 | ) | 3,023 | — | 21,193 | |||||||||
Effect of exchange rate changes on cash | — | — | (1,575 | ) | — | (1,575 | ) | ||||||||
Net decrease in cash, cash equivalents and restricted cash | (8 | ) | 1 | (11,539 | ) | — | (11,546 | ) | |||||||
Cash, cash equivalents and restricted cash at beginning of period | 1,098 | 32 | 106,239 | — | 107,369 | ||||||||||
Cash, cash equivalents and restricted cash at end of period | $ | 1,090 | $ | 33 | $ | 94,700 | $ | — | $ | 95,823 |
Parent | Guarantors | Non-guarantors | Eliminations | Consolidated | |||||||||||
Cash flows from operating activities: | |||||||||||||||
Net income/(loss) | $ | 98,075 | $ | 35,277 | $ | 109,603 | $ | (144,880 | ) | $ | 98,075 | ||||
Earnings in investments in subsidiaries | (144,880 | ) | — | — | 144,880 | — | |||||||||
Other operating cash flows | 30,782 | (24,262 | ) | (77,671 | ) | — | (71,151 | ) | |||||||
Net cash provided/(used) by operating activities | (16,023 | ) | 11,015 | 31,932 | — | 26,924 | |||||||||
Cash flows from investing activities: | |||||||||||||||
Capital expenditures | (12,183 | ) | (13,396 | ) | (31,008 | ) | — | (56,587 | ) | ||||||
Investment in subsidiaries and affiliates | (3,500 | ) | — | — | — | (3,500 | ) | ||||||||
Proceeds from sale of investment in subsidiary | — | — | 2,805 | — | 2,805 | ||||||||||
Gross proceeds from sale of property, plant and equipment and other assets | 828 | 321 | 330 | — | 1,479 | ||||||||||
Proceeds from insurance settlements | — | 503 | — | — | 503 | ||||||||||
Payments related to routes and other intangibles | — | — | (15 | ) | — | (15 | ) | ||||||||
Net cash used in investing activities | (14,855 | ) | (12,572 | ) | (27,888 | ) | — | (55,315 | ) | ||||||
Cash flows from financing activities: | |||||||||||||||
Proceeds for long-term debt | — | — | 3,876 | — | 3,876 | ||||||||||
Payments on long-term debt | (22 | ) | — | (9,600 | ) | — | (9,622 | ) | |||||||
Borrowings from revolving credit facility | 62,000 | — | 73,184 | — | 135,184 | ||||||||||
Payments on revolving credit facility | (29,000 | ) | — | (51,019 | ) | — | (80,019 | ) | |||||||
Net cash overdraft financing | — | — | (331 | ) | — | (331 | ) | ||||||||
Deferred loan costs | (1,094 | ) | — | — | — | (1,094 | ) | ||||||||
Issuances of common stock | 182 | — | — | — | 182 | ||||||||||
Minimum withholding taxes paid on stock awards | (2,013 | ) | — | (5 | ) | — | (2,018 | ) | |||||||
Net cash provided by financing activities | 30,053 | — | 16,105 | — | 46,158 | ||||||||||
Effect of exchange rate changes on cash | — | — | (1,672 | ) | — | (1,672 | ) | ||||||||
Net decrease in cash, cash equivalents and restricted cash | (825 | ) | (1,557 | ) | 18,477 | — | 16,095 | ||||||||
Cash, cash equivalents and restricted cash at beginning of period | 1,827 | 2,993 | 102,096 | — | 106,916 | ||||||||||
Cash, cash equivalents and restricted cash at end of period | $ | 1,002 | $ | 1,436 | $ | 120,573 | $ | — | $ | 123,011 |
• | Finished product commodity prices |
• | Segment results |
• | Foreign currency |
• | Corporate activities |
• | Non-U.S. GAAP measures |
Avg. Price 1st Quarter 2019 | Avg. Price 1st Quarter 2018 | Increase/(Decrease) | % Increase/(Decrease) | ||
Jacobsen: | |||||
MBM (Illinois) | $ 250.00/ton | $ 250.61/ton | $ (0.61)/ton | (0.2 | )% |
Feed Grade PM (Mid-South) | $ 269.26/ton | $ 250.16/ton | $ 19.10/ton | 7.6 | % |
Pet Food PM (Mid-South) | $ 684.51/ton | $ 781.27/ton | $ (96.76)/ton | (12.4 | )% |
Feather meal (Mid-South) | $ 447.83/ton | $ 409.26/ton | $ 38.57/ton | 9.4 | % |
BFT (Chicago) | $ 27.00/cwt | $ 26.14/cwt | $ 0.86/cwt | 3.3 | % |
YG (Illinois) | $ 20.72/cwt | $ 19.61/cwt | $ 1.11/cwt | 5.7 | % |
Corn (Illinois) | $ 3.69/bushel | $ 3.62/bushel | $ 0.07/bushel | 1.9 | % |
Reuters: | |||||
Palm Oil (CIF Rotterdam) | $ 550.00/MT | $ 675.00/MT | $ (125.00)/MT | (18.5 | )% |
Soy meal (CIF Rotterdam) | $ 353.00/MT | $ 412.00/MT | $ (59.00)/MT | (14.3 | )% |
Avg. Price 1st Quarter 2019 | Avg. Price 4th Quarter 2018 | Increase/(Decrease) | % Increase/(Decrease) | ||
Jacobsen: | |||||
MBM (Illinois) | $ 250.00/ton | $ 250.18/ton | $ (0.18)/ton | (0.1 | )% |
Feed Grade PM (Mid-South) | $ 269.26/ton | $ 267.19/ton | $ 2.07/ton | 0.8 | % |
Pet Food PM (Mid-South) | $ 684.51/ton | $ 540.68/ton | $ 143.83/ton | 26.6 | % |
Feather meal (Mid-South) | $ 447.83/ton | $ 405.90/ton | $ 41.93/ton | 10.3 | % |
BFT (Chicago) | $ 27.00/cwt | $ 25.80/cwt | $ 1.20/cwt | 4.7 | % |
YG (Illinois) | $ 20.72/cwt | $ 19.91/cwt | $ 0.81/cwt | 4.1 | % |
Corn (Illinois) | $ 3.69/bushel | $ 3.69/bushel | $ 0.00/bushel | — | % |
Reuters: | |||||
Palm Oil (CIF Rotterdam) | $ 550.00/MT | $ 497.00/MT | $ 53.00/MT | 10.7 | % |
Soy meal (CIF Rotterdam) | $ 353.00/MT | $ 368.00/MT | $ (15.00)/MT | (4.1 | )% |
(in thousands, except percentages) | Feed Ingredients | Food Ingredients | Fuel Ingredients | Corporate | Total | ||||||||||
Three Months Ended March 30, 2019 | |||||||||||||||
Net Sales | $ | 495,819 | $ | 279,164 | $ | 60,121 | $ | — | $ | 835,104 | |||||
Cost of sales and operating expenses | 382,468 | 214,118 | 50,077 | — | 646,663 | ||||||||||
Gross Margin | 113,351 | 65,046 | 10,044 | — | 188,441 | ||||||||||
Gross Margin % | 22.9 | % | 23.3 | % | 16.7 | % | — | % | 22.6 | % | |||||
Selling, general and administrative expenses | 48,831 | 21,887 | (754 | ) | 15,039 | 85,003 | |||||||||
Depreciation and amortization | 49,369 | 19,511 | 7,798 | 2,486 | 79,164 | ||||||||||
Segment operating income/(loss) | 15,151 | 23,648 | 3,000 | (17,525 | ) | 24,274 | |||||||||
Equity in net income/(loss) of unconsolidated subsidiaries | (504 | ) | — | 24,277 | — | 23,773 | |||||||||
Segment income/(loss) | 14,647 | 23,648 | 27,277 | (17,525 | ) | 48,047 |
(in thousands, except percentages) | Feed Ingredients | Food Ingredients | Fuel Ingredients | Corporate | Total | ||||||||||
Three Months Ended March 31, 2018 | |||||||||||||||
Net Sales | $ | 485,798 | $ | 305,520 | $ | 84,056 | $ | — | $ | 875,374 | |||||
Cost of sales and operating expenses | 369,088 | 249,185 | 59,826 | — | 678,099 | ||||||||||
Gross Margin | 116,710 | 56,335 | 24,230 | — | 197,275 | ||||||||||
Gross Margin % | 24.0 | % | 18.4 | % | 28.8 | % | — | % | 22.5 | % | |||||
Selling, general and administrative expenses | 48,265 | 23,861 | (1,398 | ) | 16,174 | 86,902 | |||||||||
Depreciation and amortization | 46,789 | 20,640 | 8,471 | 2,719 | 78,619 | ||||||||||
Segment operating income/(loss) | 21,656 | 11,834 | 17,157 | (18,893 | ) | 31,754 | |||||||||
Equity in net income/(loss) of unconsolidated subsidiaries | (45 | ) | — | 97,199 | — | 97,154 | |||||||||
Segment income/(loss) | 21,611 | 11,834 | 114,356 | (18,893 | ) | 128,908 |
Fats | Proteins | Other Rendering | Total Rendering | Used Cooking Oil | Bakery | Other | Total | |||||||||||||||||
Net sales three months ended March 31, 2018 | $ | 143.5 | $ | 203.4 | $ | 31.4 | $ | 378.3 | $ | 36.6 | $ | 46.8 | $ | 24.1 | $ | 485.8 | ||||||||
Increase/(decrease) in sales volumes | 5.3 | 16.0 | — | 21.3 | 8.5 | (2.1 | ) | — | 27.7 | |||||||||||||||
Increase/(decrease) in finished product prices | (1.7 | ) | (7.1 | ) | — | (8.8 | ) | 0.4 | 1.0 | — | (7.4 | ) | ||||||||||||
Increase/(decrease) due to currency exchange rates | (2.2 | ) | (6.5 | ) | (0.4 | ) | (9.1 | ) | (0.1 | ) | — | — | (9.2 | ) | ||||||||||
Other change (1) | — | — | 10.2 | 10.2 | — | — | (11.3 | ) | (1.1 | ) | ||||||||||||||
Total change | 1.4 | 2.4 | 9.8 | 13.6 | 8.8 | (1.1 | ) | (11.3 | ) | 10.0 | ||||||||||||||
Net sales three months ended March 30, 2019 | $ | 144.9 | $ | 205.8 | $ | 41.2 | $ | 391.9 | $ | 45.4 | $ | 45.7 | $ | 12.8 | $ | 495.8 |
(1) | The decrease in other net sales is primarily a result of the sale of the Company's industrial residuals business in May 2018. |
Three Months Ended | ||||||
(dollars in thousands) | March 30, 2019 | March 31, 2018 | ||||
Net income/(loss) attributable to Darling | $ | 18,012 | $ | 97,305 | ||
Depreciation and amortization | 79,164 | 78,619 | ||||
Interest expense | 19,876 | 23,124 | ||||
Income tax expense/(benefit) | 5,274 | 3,712 | ||||
Foreign currency loss/(gain) | 732 | 1,481 | ||||
Other expense/(income), net | 2,525 | 2,516 | ||||
Equity in net (income)/loss of unconsolidated subsidiaries | (23,773 | ) | (97,154 | ) | ||
Net income attributable to non-controlling interests | 1,628 | 770 | ||||
Adjusted EBITDA | $ | 103,438 | $ | 110,373 | ||
Foreign currency exchange impact (1) | 6,056 | — | ||||
Pro forma Adjusted EBITDA to Foreign Currency (Non-GAAP) | $ | 109,494 | $ | 110,373 | ||
DGD Joint Venture Adjusted EBITDA (Darling's Share) | $ | 29,828 | $ | 100,071 |
Senior Notes: | |||
5.375 % Notes due 2022 | $ | 500,000 | |
Less unamortized deferred loan costs | (4,503 | ) | |
Carrying value of 5.375% Notes due 2022 | $ | 495,497 | |
3.625 % Notes due 2026 - Denominated in euros | $ | 578,371 | |
Less unamortized deferred loan costs | (7,753 | ) | |
Carrying value of 3.625% Notes due 2026 | $ | 570,618 | |
Amended Credit Agreement: | |||
Term Loan A | $ | 61,030 | |
Less unamortized deferred loan costs | (316 | ) | |
Carrying value of Term Loan A | 60,714 | ||
Term Loan B | $ | 495,000 | |
Less unamortized deferred loan costs | (8,741 | ) | |
Carrying value of Term Loan B | $ | 486,259 | |
Revolving Credit Facility: | |||
Maximum availability | $ | 1,000,000 | |
Ancillary Facilities | 25,000 | ||
Borrowings outstanding | 50,061 | ||
Letters of credit issued | 23,458 | ||
Availability | $ | 901,481 | |
Other Debt | $ | 24,307 |
• | As of March 30, 2019, the Company had availability of $901.5 million under the revolving loan facility, taking into account that the Company had $50.1 million in outstanding borrowings, ancillary facilities and letters of credit issued of $23.5 million. |
• | As of March 30, 2019, the Company has borrowed all $350.0 million under the term loan A facility and repaid approximately CAD$119.4 million and $161.8 million, which when repaid, cannot be reborrowed. The term loan A facility is repayable in quarterly installments which commenced on March 31, 2017 as follows: for the first eight quarters following December 16, 2016, 1.25% of the original principal amount of the term loan A facility outstanding on the Fourth Amendment date, for the ninth through sixteenth quarters following December 16, 2016, 1.875% of the original principal amount of the term loan A facility outstanding on the Fourth Amendment date, and for each quarterly installment after such sixteenth installment until December 16, 2021, 3.75% of the original principal amount of the term loan A facility outstanding on the Fourth Amendment date. The term loan A facility will mature on December 16, 2021. |
• | As of March 30, 2019, the Company has borrowed all $525.0 million under the terms of the term loan B facility and repaid approximately $30.0 million, which when repaid, cannot be reborrowed. The term loan B facility is repayable in quarterly installments of 0.25% of the aggregate principal amount of the relevant term loan B facility on the last day of each March, June, September and December of each year commencing on the last day of each month falling on or after the last day of the first full quarter following December 18, 2017, and continuing until the last day of each quarter period ending immediately prior to December 18, 2024; and one final installment in the amount of the relevant term loan B facility then outstanding, due on December 18, 2024. The term loan B facility will mature on December 18, 2024. |
• | The interest rate applicable to any borrowings under the term loan A facility and the revolving loan facility will equal either LIBOR/euro interbank offered rate/CDOR plus 2.00% per annum or base rate/Canadian prime rate plus 1.00% per annum, subject to certain step-downs or step-ups based on the Company's total leverage ratio. The interest rate applicable to any borrowings under the term loan B facility will equal the base rate plus 1.00% or LIBOR plus 2.00%. |
Other commercial commitments: | |||
Standby letters of credit | $ | 23,458 | |
Foreign bank guarantees | 17,805 | ||
Total other commercial commitments: | $ | 41,263 |
Functional Currency | Contract Currency | Range of | U.S. | ||||||||
Type | Amount | Type | Amount | Hedge rates | Equivalent | ||||||
Brazilian real | 49,321 | Euro | 10,988 | 4.26 - 5.04 | $ | 12,627 | |||||
Brazilian real | 1,171,313 | U.S. dollar | 330,455 | 3.35 - 4.28 | 330,455 | ||||||
Euro | 44,675 | U.S. dollar | 51,207 | 1.13 - 1.21 | 51,207 | ||||||
Euro | 22,121 | Polish zloty | 95,280 | 4.29 - 4.32 | 24,843 | ||||||
Euro | 6,098 | Japanese yen | 768,000 | 123.94 - 131.83 | 6,848 | ||||||
Euro | 38,245 | Chinese renminbi | 294,273 | 7.60 - 7.89 | 42,952 | ||||||
Euro | 13,632 | Australian dollar | 21,850 | 1.6 | 15,309 | ||||||
Euro | 4,573 | British pound | 3,961 | 0.86 - 0.91 | 5,136 | ||||||
Polish zloty | 22,168 | Euro | 5,156 | 4.3 | 5,788 | ||||||
British pound | 276 | Euro | 322 | 0.86 | 361 | ||||||
Japanese yen | 296,912 | U.S. dollar | 2,710 | 107.53 - 111.55 | 2,710 | ||||||
U.S. dollar | 821 | Japanese yen | 90,000 | 109.58 | 821 | ||||||
$ | 499,057 |
10.1 | ||||
31.1 | ||||
31.2 | ||||
32 | ||||
101 | Interactive Data Files Pursuant to Rule 405 of Regulation S-T: (i) Consolidated Balance Sheets as of March 30, 2019 and December 29, 2018; (ii) Consolidated Statements of Operations for the three months ended March 30, 2019 and March 31, 2018; (iii) Consolidated Statements of Comprehensive Income for the three months ended March 30, 2019 and March 31, 2018; (iv) Consolidated Statements of Stockholders' Equity for the three months ended March 30, 2019; (v) Consolidated Statements of Cash Flows for the three months ended March 30, 2019 and March 31, 2018; (vi) Notes to the Consolidated Financial Statements. |
DARLING INGREDIENTS INC. | |||
Date: | May 8, 2019 | By: | /s/ Brad Phillips |
Brad Phillips | |||
Chief Financial Officer | |||
(Principal Financial Officer and Duly Authorized Officer) |
1. | The limited liability company Darling International Netherlands BV, established under the laws of the Netherlands, having its statutory place of business in Amsterdam and holding office at Prins Bernhardplein 200, (1097 JB) Amsterdam (herein, “Darling BV”), and |
2. | Mr. J. Vervoort, residing in Nuenen at Lobroec 6, 5673 BA (hereafter: “Employee”). |
(A) | Employee has been employed by the Darling Ingredients International Holding BV and/or its legal predecessors since 1 March 2006; |
(B) | Following the appointment as Managing Director, parties wish to continue the employment of Employee with Darling BV as the employer and to record the terms and conditions applicable to the continued employment of Employee agreed between them in writing in this agreement (the “Employment Agreement”); and |
1. | Function |
(a) | Employee shall continue to be employed by Darling BV as Managing Director Rousselot. |
(b) | Employee shall also serve as a member of the Executive Committee of Darling Inc. which is a committee appointed by the Board of Directors of Darling Inc. and reporting to the Chief Executive Officer of Darling Inc. who shall chair the Executive Committee. |
1.2. | Employee is obligated to do and refrain from everything that an officer and director ought to do and refrain from, and shall devote his full working time, energy and skills to the success of Darling In.c and any other companies affiliated to Darling BV (together “Darling Group”). Employee will be subject to and shall observe all policies of Darling Inc applicable to its employees, executives, officers and directors. |
1.3. | In his capacity as Managing Director Rousselot Employee will report to the CEO of Darling Ingredients International. |
1.4. | Employee shall not perform any paid or unpaid side activities for or in relation to third parties or otherwise without the prior written approval of the CEO of Darling Ingredients International. |
2. | Term |
2.1. | This Employment Agreement has started with effect from 1 March 2006 for an indefinite period of time. This Employment Agreement will in any event terminate automatically (without any compensation being due) on the last day of the month during which Employee reaches the retirement date under the Employee's pension scheme (as applicable from time to time), but in any event no later than the date on which Employee will be eligible for state old-age pension benefits (AOW). |
2.2. | This Employment Agreement is based on a 40- hour workweek. Employee is expected to work additional hours as part of this Employment Agreement as is required for the adequate fulfillment and execution of his position without being entitled to any additional remuneration. |
2.3. | This Employment Agreement may be terminated in writing as per the last day of any calendar month, observing a notice period of three months for Employee and a notice period of six months for Darling BV. Darling BV will be entitled to release Employee from active duty during the notice period, whereby Employee will remain available for a proper handover of responsibilities to a successor. |
2.4. | If this Employment Agreement terminates by the death of Employee, salary payments will be continued to the surviving relatives from the day of death up to and including the last day of the third month after the month of death of Employee. In addition, any accrued (and vested) entitlements under the Incentive Programs referenced in Section 4 hereto until the day of death will be paid to the surviving relatives in the customary manner and time and subject to the terms of the agreements governing such programs. |
3. | Salary |
3.1. | The remuneration of Employee is recorded in a remuneration package determined by the Compensation Committee of the Darling Inc Board of Directors (the “Compensation Committee”), after consultation with the Chief Executive Officer of Darling Inc. The remuneration may be adjusted by the Compensation Committee annually, to reflect cost of living. The annual fixed income, including holiday allowance, amounts to EUR 228.000 gross (the “Annual Fixed Salary”) for the year 2016. Ultimately in December of each year, the parties will consult with each other with regard to the possible increase of the annual salary with effect from 1 January of the subsequent year. |
3.2 | The Annual Fixed Salary, excluding holiday allowance, will be paid in 12 equal monthly installments after deduction of the mandatory statutory and agreed deductions. |
3.3 | The holiday allowance will be paid in the month of May of the relevant year. For the calculation of the holiday allowance, a year is deemed to start on 1 January and to end on 31 December (the “Holiday Year”). In the event this Employment Agreement starts or terminates during the Holiday Year, the holiday allowance will be calculated on a pro rata basis. |
4. | Incentive Programs |
(a) | Employee shall be entitled to participate in the Employee bonus program maintained by Darling Inc. as in effect from time to time (the “Bonus Program”). Specifics of the Bonus Program will be determined annually by the Compensation Committee of Darling Inc.’s’ Board of Directors. |
(b) | It is agreed and acknowledged that the bonus opportunity of Employee under the Bonus Program shall be no less favorable than the opportunity under Employee's 2015 short term incentive arrangements (i.e. 30% of the Annual Fixed Salary). The specifics of the Bonus Program for 2016 will be communicated to Employee in a separate letter. |
(c) | Participation levels and performance measures for the Bonus Program are determined annually by the Compensation Committee and are subject to change at the discretion of the Compensation Committee or Darling Inc.’s Board of Directors. Bonuses are not earned until the date they are paid, and participants must be employed on the date of payment to receive a bonus, subject to the discretion of the Compensation Committee or Darling Inc.’s Board of Directors to waive this requirement based on the circumstances of a participant’s departure (e.g., retirement). Payment of any bonus in a year does not entitle Employee to payment of a bonus in any preceding or subsequent year. |
(d) | All equity based awards made to Employee under the Bonus Program shall be evidenced by an award agreement executed by Darling Inc. and Employee and will be subject to all applicable legal requirements and restrictions imposed on the Bonus Program pursuant to United States and other applicable law. |
5. | Claw Back |
5.1. | Parties agree as regards Employee's benefits under this Employment Agreement, that Darling BV has the right to unilaterally adjust and/or claw-back any awards made to the Employee (whether bonus or grants under the Incentive Programs referenced in Section 4 hereto) if, and to the extent, (i) an independent auditor (to be appointed by the joint parties and paid for by Darling BV) has confirmed, on request of Darling BV, that such award or grant has been made on the basis of incorrect or incomplete information, and (ii) Darling BV has sufficient weighty grounds to effect such adjustment and/or claw-back taking into account the Dutch principle of reasonableness and fairness. |
5.2. | If the conditions included under Section 5.1 (i) and (ii) are met, the Employee agrees to fully cooperate with the execution of any adjustment and/or claw-back under Section 5.1 hereof. |
6. | Expenses |
7. | Car and Telephone |
7.1. | For the purposes of performing his job, Darling BV will provide Employee with a car which may be used for private purposes within reasonableness. Maximum catalogue value including VAT and private motor vehicle and motorcycle tax ( BPM) will be determined according to the Darling BV car policy. |
7.2. | All costs related to this car, including the costs of use for private purposes as mentioned under Section 7.1. shall be borne by Darling BV, except for the following costs which shall be borne by Employee: |
(a) | the costs of fines in relation to traffic violations; |
(b) | the costs associated with additions for tax purposes (fiscale bijtelling); |
(c) | other costs which are not related to the performance of the function (such as toll, vignette, etc.). |
7.3. | Employee is obliged to return the car provided to him to Darling BV, at the first request of Darling BV if there is a legal ground for such return. In the event of suspension, the car may be reclaimed by Darling BV immediately. Employee will in any event need to return the car made available to him to Darling BV as per the day this Employment Agreement terminates. Darling BV is no longer held to reimburse any travel expenses of Employee after the car has been returned. |
7.4. | Darling BV will provide Employee with electronic communication tools. Employee may use these electronic communication tools for private purposes, both internally and externally, provided that the use thereof will not interfere with the daily work and is in compliance with further guidelines of Darling BV. The use of electronic communication tools should, however, primarily and essentially relate to the tasks/activities arising from the function. |
7.5. | Darling BV may ask Employee to clarify any striking use of the electronic communication tools, and charge on possible costs for private purposes. Any tax consequences arising from the private use will be for the account of Employee. |
8. | Insurances |
8.1. | If and to the extent Darling BV has taken out a collective health insurance for its employees pursuant to the Dutch Health Insurance Act (Zorgverzekeringswet), Employee can participate to such group scheme. Employee remains, however, responsible for the payment of his nominal premium and any premiums for supplemental packages. |
8.2. | Employee can make use of the ANW-Hiaatverzekering (related to shortfall under the Surviving Dependents Act) and the insurance for directors' liability as taken out by Darling BV, in accordance with relevant terms. |
9. | Pension |
9.1. | Darling BV has arranged for a pension scheme (pensioenvoorziening) for Employee. To this end, Employee has been included in the pension arrangement. The rules of the pension scheme, as amended from time to time, will apply to this participation. In accordance with the provisions of the pension scheme, Employee will have to pay a contribution (eigen bijdrage), which contribution will be made through a payroll deduction. The pension scheme rules have been provided to Employee. The pensionable salary is maximized to a maximum amount of EUR 400,435 for 2015. This amount will be reviewed annually as part of the Employees total remuneration package and a yearly indexation will be applied to such amount using the general increase percentage that applies for employees of Darling BV. |
10. | Holidays |
10.1. | Employee will be entitled to 25 holidays per calendar year, to be taken whilst taking account of the interests of Darling Group. |
10.2 | Given the severity of his position and the recovery function of the holidays, the holidays are expected to be taken within the year that the holidays are granted. Given his position, Employee is free to determine when he will use his holidays, provided that he takes into account the interests of the Darling Group. |
11. | Incapacity for work |
11.1. | Notwithstanding the provisions of article 7:629 paragraph 3 up to and including 5 Dutch Civil Code, Employee will receive in case of incapacity for work during the first year of illness, however ultimately until the end of this Employment Agreement (in case that is earlier), to be calculated from the first day of the incapacity, 100% of the Annual Fixed Salary after deduction of any benefits or payments received by Employee pursuant to relevant state-provided social security or insurance arrangements taken out by Darling BV. |
11.2 | From the 53rd week up to and including the 104th week of the respective period of illness, however ultimately until the end of this Employment Agreement (in case that is earlier), Darling BV will pay 70% of the Annual Fixed Salary, also after deduction of any benefits or payments received by Employee pursuant to relevant state-provided social security or insurance arrangements taken out by Darling BV. |
12. | Confidentiality, documents |
12.1. | Employee shall, both during the continuance of his employment and after the termination thereof, keep confidential all information regarding Darling Group, and its clients and relations, whereby confidentiality is imposed on him or of which he knows, or is ought to know, the secret or confidential nature, and he shall not use this information for other purpose than required in connection with the performance of the obligations arising from this Employment Agreement. |
12.2. | Employee is prohibited to keep in any manner whatsoever documents, correspondence or copies thereof, that are in his possession in connection with the performance of his activities for the Darling Group, any longer than necessary for the purpose of performance of his activities. In any event Employee is obliged to hand over with immediate effect, even without any request thereto, such documents, correspondence or copies thereof at first request and/or at the termination of the employment, or when he has not performed his duties, for whatever reason, for a period longer than four weeks. |
13. | Non-compete/non solicit |
13.1. | During the employment of Employee and during the Restrictive Period (as defined here below), Employee shall not without prior written approval of Darling Inc. be permitted to do any of the following in any jurisdiction where Darling Group is active directly or indirectly in any capacity whatsoever, or has any business interests, at the time of termination of this Employment Agreement: |
(a) | to work for or be involved with, in any manner, directly or indirectly, paid or unpaid, any person, organization, company or enterprise pursuing activities similar to the Darling Group, including the (former) VION Ingredients Group, and/or to have or take any interest in such organization, company or enterprise. This includes, without limitation, companies involved in slaughter by-products or other products or business (directly or indirectly) derived or following from the slaughtering business such as, without limitation, Saria, Gelita, Tessenderloo , Nitta, Ten Kate, Van Hessen. |
(b) | to maintain in any manner whatsoever, directly or indirectly, business contacts with any person, organization, company or enterprise with whom during the last two years preceding the termination of this Employment Agreement Employee has had any business, to the extent Darling Group has a legitimate business interest in Employee refraining from maintaining such business contact; |
(c) | to induce, directly or indirectly, present employees of Darling Group, including but not limited Darling BV, Darling Inc., Darling USA and Darling Canada, or persons who in the period of two years preceding the termination of this Employment Agreement have been or were employed by such company, to terminate their employment or to hire such employees. |
(a) | in the event Employee terminates this Employment Agreement through notice or otherwise, the Restrictive Period will be 18 months from the date of termination of this Employment Agreement; |
(b) | in the event Darling BV terminates this Employment Agreement through notice, the Restrictive Period will be 18 months from the date notice has been served by Darling BV on Employee (and therefore 12 months from the date of termination of this Employment Agreement); provided, however, that in the event that Darling BV does not waive the non-compete clause Employee will be entitled to an additional severance which adequately reflects the imposed restrictions; |
(c) | in the event Darling BV terminates this Employment Agreement with immediate effect for cause (dringende reden), the Restrictive Period will be 18 months from the date of termination of this Employment Agreement; |
(d) | in the event this Employment Agreement is rescinded by a Court at the request of Darling BV for reasons other than cause (dringende reden), the restrictive period will be 12 months from the date of termination of this Employment Agreement. |
(e) | in the event this Employment Agreement is rescinded by a Court at the request of Employee or at the request of Darling BV for cause (dringende reden), the restrictive period will be 18 months from the date of termination of this Employment Agreement. |
14. | Penalty clause |
14.1. | Employee will forfeit to Darling BV for a breach of Sections 12 and 13 hereof immediately, without prior notice or any judicial intervention being required, a penalty of EUR 10,000 per breach plus EUR 500 for each day that such breach continues, without prejudice to Darling BV’s right to claim the actual damages it has suffered through such breach. Section 7:650 subsections 3, 4 and 5 Dutch Civil Code and/or sections 6:92, 6:93 Dutch Civil Code (each time to the extent applicable) are explicitly excluded. |
14.2 | It is acknowledged and agreed that reasonable compensation for the restrictions set out in Sections 12 and 13 hereof is included in Employee's remuneration package. |
15. | Rights of intellectual or industrial property |
15.1. | If Employee during, or within a period of two years after termination of this Employment Agreement has invented a certain product/working method (voortbrengsel/werkmethode) which is to be considered as a consequence of, or pursuant to, his activities at Darling Group and which may lead in The Netherlands or elsewhere to the inception of rights, including all rights of industrial or intellectual property and explicitly including: databases, know-how, trademarks, designs, drawings, product specifications, formulas, computer programs, etc., Darling Inc. is entitled to this product/working method and the related rights. |
15.2. | Employee does not have the right to mention his name or have his name mentioned in connection with the rights meant in this Section 15.1 of this Employment Agreement, with the exception of the provisions of Section 14 paragraph 1 of the Dutch Patent Act 1995 (Rijksoctrooiwet 1995). Employee hereby waives in relation to the rights as meant in this Section 15.1 his moral rights (persoonlijkheidsrechten) within the meaning of article 25 Dutch Copyright Act 1912 (Auteurswet 1912) and his possible entitlements to a monetary compensation in addition to his salary, all to the extent permitted by law. |
15.3. | Employee shall promptly and without delay inform Darling Inc. of the inception of any right as meant in this Section and will, to the extent required, make every effort to have Darling Inc. obtain such right. |
15.4. | Employee will do his utmost to ensure the maximum protection of a right as meant in Section 15.1 of this Employment Agreement, to the extent that it serves the interests of Darling Group and to the extent that it is in accordance with relevant policies. |
15.5 | Employee acknowledges and agrees that his salary includes compensation for the fact that the rights pursuant to Section 15.1 of this Employment Agreement accrue to Darling Inc., as well as to his cooperation to ensure that these rights will accrue to Darling Inc. |
16. | Gifts |
16.1. | Employee is prohibited to, in relation to the performance of his duties during the term of his employment, without the prior written consent of Darling Inc., accept or stipulate from third parties, directly or in any manner indirectly, any commission, favor or compensation in whatever form or manner. |
16.2. | The provisions of Section 16.1 do not apply to the customary business gift of small value, which do not exceed the retail value of EUR 100. |
17. | Final provisions |
17.1. | It is agreed between the parties that Darling BV and Darling Inc. will review the taxation of Employee's earnings under this Employment Agreement. |
17.3. | This Employment Agreement constitutes the entire employment agreement between the parties and supersedes all (employment) agreements previously made and given by and between the Employee and Darling Ingredients International Holding BV and its affiliated companies and will be effected per January 1, 2016. |
17.4. | In this Employment Agreement, all references to Darling Inc or the affiliated undertakings or companies, means a reference to all companies belonging directly or indirectly to the Darling Group. |
17.5. | The invalidity (nietigheid) of one or more provisions of this Employment Agreement shall not result in the invalidity of the remaining provisions of this Employment Agreement. The parties undertake to immediately hold consultations with each other in case any provision is void. |
17.7. | Any dispute arising under or in connection with this agreement, including disputes in relation to the existence or validity of this Employment Agreement shall be settled by the competent court in The Netherlands. |
1. | I have reviewed this quarterly report on Form 10-Q of Darling Ingredients Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstance under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: | May 8, 2019 |
1. | I have reviewed this quarterly report on Form 10-Q of Darling Ingredients Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstance under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: | May 8, 2019 |
/s/ Randall C. Stuewe | /s/ Brad Phillips | ||
Randall C. Stuewe | Brad Phillips | ||
Chief Executive Officer | Chief Financial Officer | ||
Date: May 8, 2019 | Date: May 8, 2019 |
Document and Entity Information Document - shares |
3 Months Ended | |
---|---|---|
Mar. 30, 2019 |
May 01, 2019 |
|
Document - Entity Information [Abstract] | ||
Entity Registrant Name | DARLING INGREDIENTS INC. | |
Entity Central Index Key | 0000916540 | |
Current Fiscal Year End Date | --12-28 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Mar. 30, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Common Stock, Shares Outstanding | 164,748,806 |
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands |
Mar. 30, 2019 |
Dec. 29, 2018 |
---|---|---|
Assets: | ||
Property, plant and equipment, accumulated depreciation | $ 1,281,115 | $ 1,246,095 |
Intangible assets, accumulated amortization | $ 427,687 | $ 423,575 |
Stockholders’ equity: | ||
Common stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 250,000,000 | 250,000,000 |
Common stock, shares issued | 168,409,679 | 168,098,177 |
Treasury stock, shares | 3,660,873 | 3,437,579 |
Consolidated Statements of Stockholders’ Equity - USD ($) $ in Thousands |
Total |
Parent [Member] |
Common Stock |
Additional Paid-In Capital |
Treasury Stock |
Accumulated Other Comprehensive Loss |
Retained Earnings |
Non-controlling Interest |
Natural Gas Swap [Member] |
Natural Gas Swap [Member]
Parent [Member]
|
Natural Gas Swap [Member]
Accumulated Other Comprehensive Loss
|
Corn Option [Member] |
Corn Option [Member]
Parent [Member]
|
Corn Option [Member]
Accumulated Other Comprehensive Loss
|
Foreign Exchange Contract [Member] |
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||
Adjustment to initially apply FASB ASC No. 2018-02 Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income | $ 0 | $ 0 | $ (4,782) | $ 4,782 | |||||||||||
Balance (in shares) at Dec. 30, 2017 | 164,653,437 | ||||||||||||||
Stockholders' Equity, Beginning Balance at Dec. 30, 2017 | 2,327,697 | 2,244,933 | $ 1,679 | $ 1,515,614 | $ (44,063) | (209,524) | 981,227 | $ 82,764 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||
Net income | 98,075 | 97,305 | 97,305 | 770 | |||||||||||
Deductions to noncontrolling interests | (10,173) | 0 | 0 | (10,173) | |||||||||||
Pension liability adjustments, net of tax | 667 | 667 | 667 | ||||||||||||
Foreign exchange derivative adjustment, net of tax | $ 22 | $ (1,605) | $ 0 | ||||||||||||
Derivatives | 22 | $ 22 | $ 22 | (1,605) | $ (1,605) | $ (1,605) | |||||||||
Foreign currency translation | 17,295 | 16,778 | 16,778 | 517 | |||||||||||
Stock-based compensation | 8,527 | 8,527 | 8,527 | ||||||||||||
Treasury stock (in shares) | (159,758) | ||||||||||||||
Treasury stock | (2,962) | (2,962) | (2,962) | ||||||||||||
Issuance of common stock (in shares) | 153,983 | ||||||||||||||
Issuance of common stock | 1,696 | 1,696 | $ 1 | 1,695 | |||||||||||
Balance (in shares) at Mar. 31, 2018 | 164,647,662 | ||||||||||||||
Stockholders' Equity, Ending Balance at Mar. 31, 2018 | 2,439,239 | 2,365,361 | $ 1,680 | 1,525,836 | (47,025) | (198,444) | 1,083,314 | 73,878 | |||||||
Balance (in shares) at Dec. 29, 2018 | 164,660,598 | ||||||||||||||
Stockholders' Equity, Beginning Balance at Dec. 29, 2018 | 2,335,821 | 2,273,048 | $ 1,681 | 1,536,157 | (47,756) | (304,539) | 1,087,505 | 62,773 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||
Net income | 19,640 | 18,012 | 18,012 | 1,628 | |||||||||||
Pension liability adjustments, net of tax | 858 | 858 | 858 | ||||||||||||
Foreign exchange derivative adjustment, net of tax | (1,937) | (1,937) | (1,937) | $ 0 | $ 0 | $ (1,937) | |||||||||
Foreign currency translation | (4,886) | (6,645) | (6,645) | 1,759 | |||||||||||
Stock-based compensation | 10,403 | 10,403 | 10,403 | ||||||||||||
Treasury stock (in shares) | (223,294) | ||||||||||||||
Treasury stock | (5,089) | (5,089) | (5,089) | ||||||||||||
Issuance of common stock (in shares) | 311,502 | ||||||||||||||
Issuance of common stock | 1,889 | 1,889 | $ 3 | 1,886 | |||||||||||
Balance (in shares) at Mar. 30, 2019 | 164,748,806 | ||||||||||||||
Stockholders' Equity, Ending Balance at Mar. 30, 2019 | $ 2,356,699 | $ 2,290,539 | $ 1,684 | $ 1,548,446 | $ (52,845) | $ (312,263) | $ 1,105,517 | $ 66,160 |
Consolidated Statements of Stockholders’ Equity (Parenthetical) - $ / shares |
Mar. 30, 2019 |
Dec. 29, 2018 |
Mar. 31, 2018 |
---|---|---|---|
Statement of Stockholders' Equity [Abstract] | |||
Common stock, par value (in usd per share) | $ 0.01 | $ 0.01 | $ 0.01 |
General |
3 Months Ended |
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Mar. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
General | General The accompanying consolidated financial statements for the three month periods ended March 30, 2019 and March 31, 2018, have been prepared by Darling Ingredients Inc., a Delaware corporation (“Darling”, and together with its subsidiaries, the “Company”) in accordance with generally accepted accounting principles in the United States (“GAAP”) without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The information furnished herein reflects all adjustments (consisting only of normal recurring accruals) that are, in the opinion of management, necessary to present a fair statement of the financial position and operating results of the Company as of and for the respective periods. However, these operating results are not necessarily indicative of the results expected for a full fiscal year. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with GAAP have been omitted pursuant to such rules and regulations. However, management of the Company believes, to the best of their knowledge, that the disclosures herein are adequate to make the information presented not misleading. The accompanying consolidated financial statements should be read in conjunction with the audited consolidated financial statements contained in the Company’s Form 10-K for the fiscal year ended December 29, 2018. |
Summary of Significant Accounting Policies |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies
The consolidated financial statements include the accounts of Darling and its consolidated subsidiaries. Noncontrolling interests represent the outstanding ownership interest in the Company's consolidated subsidiaries that are not owned by the Company. In the accompanying Consolidated Statements of Operations, the noncontrolling interest in net income of the consolidated subsidiaries is shown as an allocation of the Company's net income and is presented separately as “Net income attributable to noncontrolling interests.” In the Company's Consolidated Balance Sheets, noncontrolling interests represent the ownership interests in the Company consolidated subsidiaries' net assets held by parties other than the Company. These ownership interests are presented separately as “Noncontrolling interests” within “Stockholders' Equity.” All significant intercompany balances and transactions have been eliminated in consolidation.
The Company has a 52/53 week fiscal year ending on the Saturday nearest December 31. Fiscal periods for the consolidated financial statements included herein are as of March 30, 2019, and include the 13 weeks ended March 30, 2019, and the 13 weeks ended March 31, 2018.
The Company considers all short-term highly liquid instruments, with an original maturity of three months or less, to be cash equivalents. Cash balances are recorded net of book overdrafts when a bank right-of-offset exists. All other book overdrafts are recorded in accounts payable and the change in the related balance is reflected in operating activities on the Consolidated Statement of Cash Flows. In addition, the Company has bank overdrafts, which are considered a form of short-term financing with changes in the related balance reflected in financing activities in the Consolidated Statement of Cash Flows. Restricted cash represents amounts required to be set aside to cover self-insurance claims and collateral for environmental claims. The following table provides a reconciliation of cash, cash equivalents and restricted cash on the consolidated balance sheet that sum to the total of the same amounts shown in the consolidated statement of cash flows (in thousands):
The Company maintains allowances for doubtful accounts for estimated losses resulting from customers’ non-payment of trade accounts receivable owed to the Company. These trade receivables arise in the ordinary course of business from sales of raw material, finished product or services to the Company’s customers. The estimate of allowance for doubtful accounts is based upon the Company’s bad debt experience, prevailing market conditions, and aging of trade accounts receivable, among other factors. If the financial condition of the Company’s customers deteriorates, resulting in the customers’ inability to pay the Company’s receivables as they come due, additional allowances for doubtful accounts may be required. The Company has entered into agreements with third party banks to factor certain of the Company's trade receivables in order to enhance working capital by turning trade receivables into cash faster. Under these agreements, the Company will sell certain selected customers trade receivables to the third party banks without recourse for cash less a nominal fee. For the three months ended March 30, 2019 and March 31, 2018, the Company sold approximately $32.5 million and $18.8 million of its trade receivables and incurred approximately $0.2 million and less than $0.1 million in fees, which are recorded as interest expense, respectively.
The Company recognizes revenue on sales when control of the promised finished product is transferred to the Company's customers in an amount that reflects the consideration the Company expects to be entitled to in exchange for the finished product. Service revenues are recognized when the service occurs. Certain customers may be required to prepay prior to shipment in order to maintain payment protection related to certain foreign and domestic sales. These amounts are recorded as unearned revenue and recognized when control of the promised finished product is transferred to the Company's customer. See Note 19 to the consolidated financial statements.
Foreign currency translation is included as a component of accumulated other comprehensive loss and reflects the adjustments resulting from translating the foreign currency denominated financial statements of foreign subsidiaries into U.S. dollars. The functional currency of the Company's foreign subsidiaries is the currency of the primary economic environment in which the entity operates, which is generally the local currency of the country. Accordingly, assets and liabilities of the foreign subsidiaries are translated into U.S. dollars at fiscal period end exchange rates, including intercompany foreign currency transactions that are of long-term investment nature. Income and expense items are translated at average exchange rates occurring during the period. Changes in exchange rates that affect cash flows and the related receivables or payables are recognized as transaction gains and losses in determining net income. The Company incurred net foreign currency translation losses of approximately $6.6 million for the three months ended March 30, 2019 and net foreign currency translation gains of approximately $16.8 million for the three months ended March 31, 2018, respectively.
The Company accounts for leases in accordance with Accounting Standard Codification (“ASC”) Topic 842, leases. The Company determines if an arrangement is a lease at inception for which the Company recognizes the right-of-use (“ROU”) asset and a lease liability at the lease commencement date. For operating leases, the lease liability is initially and subsequently measured at the present value of the unpaid lease payments at the lease commencement date. In determining the lease liability, the Company applies a discount rate to the minimum lease payments within each lease. ASC 842 requires the Company to use the rate of interest that a lessee would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. To estimate the Company's incremental borrowing rate over various terms, a comparable market yield curve consistent with the Company's credit quality is determined. The lease term for all of the Company's leases include the noncancellable period of the lease plus any additional periods covered by either a Company option to extend the lease that the Company is reasonably certain to exercise or when a triggering event occurs. The Company has elected to not recognize a ROU asset and lease liability with an initial term of 12 months or less at lease commencement. Current operating leases are included on the Company's balance sheet as a ROU asset, current operating lease liabilities and long-term operating lease liabilities. For finance leases, the lease liability is initially measured in the same manner and date as for the operating leases, and is subsequently measured at amortized cost using the effective interest method. Finance leases are included in property, plant and equipment, current portion of long-term debt and long-term debt, net of current portion, but are not significant to the Company. The ROU asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for lease payments made at or before the lease commencement date, plus any direct costs incurred less any lease incentives received. For operating leases, the ROU asset is subsequently measured throughout the lease term at the carrying amount of the lease liability, plus initial direct costs, plus (minus) any prepaid (accrued) lease payments, less the unamortized balance of the lease incentives received. Some leases payments contain rent escalation clauses (including index-based escalations), initially measured using the index at the lease commencement date. The Company recognizes minimum rental expense on a straight-line basis based on the fixed components of the lease arrangement. The Company uses the long-lived assets impairment guidance in ASC subtopic 360-10, Property, Plant and Equipment - Overall, to determine whether the ROU asset is impaired, and if so, the amount of the impairment loss to recognize. The Company monitors for events or changes in circumstances that require a reassessment of one of its leases. When a reassessment results in the remeasurement of a lease liability, a corresponding adjustment is made to the carrying amount of the corresponding ROU asset unless doing so would reduce the carrying amount of the ROU asset to an amount less than zero. In that case, the amount of the adjustment that would result in a negative ROU asset balance is recorded in the consolidated statement of operations. As a result, of adopting the new lease standard, the Company recognized additional operating liabilities of approximately $134.4 million with a corresponding ROU asset of approximately $135.7 million as of December 30, 2018.
Basic income per common share is computed by dividing net income attributable to Darling by the weighted average number of common shares including non-vested and restricted shares outstanding during the period. Diluted income per common share is computed by dividing net income attributable to Darling by the weighted average number of common shares outstanding during the period increased by dilutive common equivalent shares determined using the treasury stock method.
For the three months ended March 30, 2019 and March 31, 2018, respectively, 466,841 and 749,550 outstanding stock options were excluded from diluted income per common share as the effect was antidilutive. For the three months ended March 30, 2019 and March 31, 2018, respectively, 391,800 and 385,216 shares of non-vested stock and stock equivalents were excluded from diluted income per common share as the effect was antidilutive. |
Investment in Unconsolidated Subsidiary |
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Equity Method Investments and Joint Ventures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment in Unconsolidated Subsidiary | Investment in Unconsolidated Subsidiaries On January 21, 2011, a wholly-owned subsidiary of Darling entered into a limited liability company agreement with a wholly-owned subsidiary of Valero Energy Corporation (“Valero”) to form Diamond Green Diesel Holdings LLC (the “DGD Joint Venture”). The DGD Joint Venture is owned 50% / 50% with Valero and was formed to design, engineer, construct and operate a renewable diesel plant (the “DGD Facility”), which as a result of the recent expanded capacity is now capable of processing approximately 20,000 barrels per day of input feedstock to produce renewable diesel fuel and certain other co-products, and is located adjacent to Valero's refinery in Norco, Louisiana. The DGD Joint Venture reached mechanical completion and began the production of renewable diesel in late June 2013. Effective May 1, 2019, the limited liability company agreement was amended and restated for the purpose of updating the agreement in certain respects, including to remove certain provisions that were no longer relevant and to add new provisions relating to the DGD Joint Venture’s recently approved expansion project to construct a new, parallel facility located next to the existing facility. Selected financial information for the Company's DGD Joint Venture is as follows (in thousands):
As of March 30, 2019 under the equity method of accounting, the Company has an investment in the DGD Joint Venture of approximately $393.0 million on the consolidated balance sheet. The Company has recorded an equity net gain of approximately $24.3 million and $97.2 million for the three months ended March 30, 2019 and March 31, 2018. In February 2018, the blender tax credits for calendar year 2017 were retroactively reinstated by the U.S. Congress. Fiscal 2019 results do not include any blenders tax credits, while in the first three months of fiscal 2018, the DGD Joint Venture recorded approximately $160.4 million for the 2017 reinstated blenders tax credits. The DGD Joint Venture recorded the blenders tax credits in the first quarter of fiscal 2018 as a reduction of total costs and expenses in the above table. The biodiesel blenders tax credit have not been reinstated for fiscal 2018 or fiscal 2019. In addition, in April 2019, the Company received a dividend distribution of approximately $17.7 million from the DGD Joint Venture. In addition to the DGD Joint Venture, the Company has investments in other unconsolidated subsidiaries that are insignificant to the Company. |
Acquisitions and Dispositions (Notes) |
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Business Combinations [Abstract] | |
Acquisitions and Dispositions | Acquisitions and Dispositions In October 2018, the Company acquired substantially all of the assets of Triple - T Foods - Arkansas, Inc. including a wet pet food ingredient operation in Springdale, Arkansas and a cold storage operation in Rogers, Arkansas. The Company finalized the working capital amount in the first quarter of 2019, which resulted in insignificant adjustments to previously disclosed amounts. |
Inventories |
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Inventories | Inventories A summary of inventories follows (in thousands):
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Intangible Assets |
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Intangible Asset Disclosure Text Block [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Intangible Assets | Intangible Assets The gross carrying amount of intangible assets not subject to amortization and intangible assets subject to amortization is as follows (in thousands):
Gross intangible routes, permits, trade names, non-compete agreements and other intangibles partially decreased in fiscal 2018 as a result of approximately $13.4 million of fully amortized asset retirements. Amortization expense for the three ended March 30, 2019 and March 31, 2018, was approximately $18.4 million, $19.5 million, respectively. |
Goodwill |
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Intangible Asset Disclosure Text Block [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill | Goodwill Changes in the carrying amount of goodwill (in thousands):
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Accrued Expense Accrued Expenses |
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Accrued Expenses | Accrued Expenses Accrued expenses consist of the following (in thousands):
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Leases |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | Leases In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842). The Company adopted the new standard on December 30, 2018 and is using the effective date as the Company's date of initial application and consequently, financial information will not be updated and the disclosures required under the this ASU will not be provided for dates and periods before December 30, 2018. The Company has elected the package of expedients, which permits the Company not to reassess under the new standard the Company's prior conclusions about lease identification, lease classification and initial direct costs. The Company did not elect the use-of-hindsight or the practical expedient pertaining to land easements; the latter not being applicable to the Company. The Company leases certain real and personal property under non-cancelable operating leases. In addition, the Company leases a large portion of the Company's fleet of tractors, all of its rail cars, some IT equipment and other transportation equipment. The Company's office leases include certain lease and non-lease components, where the Company has elected to exclude the non-lease components from the calculation of the lease liability and ROU asset. The Company has finance leases, which are not significant to the Company and not separately disclosed in detail. The components of operating lease expense included in cost of sales and operating expenses and selling, general and administrative expenses were as follows (in thousands):
Other information (in thousands, except lease terms and discount rates):
Future annual minimum lease payments and capital lease commitments as of March 30, 2019 were as follows (in thousands):
The Company adopted ASU 2016-02 on December 30, 2018 as noted above. The following disclosure is provided for periods prior to adoption. Future annual minimum lease payments and capital lease commitments as of December 29, 2018 were as follows (in thousands):
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Leases | Leases In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842). The Company adopted the new standard on December 30, 2018 and is using the effective date as the Company's date of initial application and consequently, financial information will not be updated and the disclosures required under the this ASU will not be provided for dates and periods before December 30, 2018. The Company has elected the package of expedients, which permits the Company not to reassess under the new standard the Company's prior conclusions about lease identification, lease classification and initial direct costs. The Company did not elect the use-of-hindsight or the practical expedient pertaining to land easements; the latter not being applicable to the Company. The Company leases certain real and personal property under non-cancelable operating leases. In addition, the Company leases a large portion of the Company's fleet of tractors, all of its rail cars, some IT equipment and other transportation equipment. The Company's office leases include certain lease and non-lease components, where the Company has elected to exclude the non-lease components from the calculation of the lease liability and ROU asset. The Company has finance leases, which are not significant to the Company and not separately disclosed in detail. The components of operating lease expense included in cost of sales and operating expenses and selling, general and administrative expenses were as follows (in thousands):
Other information (in thousands, except lease terms and discount rates):
Future annual minimum lease payments and capital lease commitments as of March 30, 2019 were as follows (in thousands):
The Company adopted ASU 2016-02 on December 30, 2018 as noted above. The following disclosure is provided for periods prior to adoption. Future annual minimum lease payments and capital lease commitments as of December 29, 2018 were as follows (in thousands):
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Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | Debt Debt consists of the following (in thousands):
As of March 30, 2019, the Company had outstanding debt under a term loan facility denominated in Canadian dollars of CAD$30.6 million. See below for discussion relating to the Company's debt agreements. In addition, as of March 30, 2019, the Company had capital lease obligations denominated in Canadian dollars included in debt. The total Canadian dollar finance lease obligation was approximately CAD$0.4 million. As of March 30, 2019, the Company had outstanding debt under the revolving credit facility and the Company's 3.625% Senior Notes due 2026 denominated in euros of €33.0 million and €515.0 million, respectively. See below for discussion relating to the Company's debt agreements. In addition, at March 30, 2019, the Company had capital lease obligations denominated in euros included in debt. The total euro finance lease obligations was approximately €0.1 million. Senior Secured Credit Facilities. On January 6, 2014, Darling, Darling International Canada Inc. (“Darling Canada”) and Darling International NL Holdings B.V. (“Darling NL”) entered into a Second Amended and Restated Credit Agreement (as subsequently amended, the “Amended Credit Agreement”), restating its then existing Amended and Restated Credit Agreement dated September 27, 2013 (the “Former Credit Agreement”), with the lenders from time to time party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, and the other agents from time to time party thereto. Effective December 18, 2017, the Company, and certain of its subsidiaries entered into an amendment (the “Fifth Amendment”) with its lenders to the Amended Credit Agreement. Among other things, the Fifth Amendment (i) refinanced the term B loans under the Amended Credit Agreement with new term B loans in an aggregate principal amount of $525.0 million with a maturity date of December 18, 2024; (ii) adjusted the applicable margin pricing on borrowings under the term B loan; (iii) modified certain of the negative covenants to increase the allowances for certain actions, including debt and investments; and (iv) made other updates and changes. Effective December 16, 2016, the Company, and certain of its subsidiaries entered into an amendment (the “Fourth Amendment”) with its lenders to the Amended Credit Agreement. Among other things, the Fourth Amendment (i) extended the maturity date of the term A loans and revolving credit facility loans under the Amended Credit Agreement from September 27, 2018 to December 16, 2021, subject to a 91-day “springing” adjustment if the term B loans are outstanding 91 days prior to the maturity date of the term B loans; (ii) reset the amortization schedule of the term A loans to their original schedule; (iii) adjusted the applicable margin pricing grid on borrowings under the term A Loan and revolving credit facility which adjusts based on the Company's total leverage ratio as set forth in the Amended Credit Agreement; (iv) eliminated the secured leverage ratio financial maintenance covenant so that from and after the effective date of the Fourth Amendment the Company’s financial covenants consist of maintaining of total leverage ratio not to exceed 5.50 to 1.00 and maintaining an interest coverage ratio of not less than 3.00 to 1.00; (v) modified certain of the negative covenants to include a senior leverage ratio incurrence-based test and to increase the allowances for certain actions, including debt, investments and restricted payments; and (vi) made other updates and changes. The Company's Amended Credit Agreement provides for senior secured credit facilities in the aggregate principal amount of $1.88 billion comprised of (i) the Company's $350.0 million term loan A facility, (ii) the Company's $525.0 million term loan B facility and (iii) the Company's $1.0 billion five-year revolving loan facility (approximately $150.0 million of which is available for a letter of credit sub-facility and $50.0 million of which is available for a swingline sub-facility) (collectively, the “Senior Secured Credit Facilities”). The Amended Credit Agreement also permits Darling and the other borrowers thereunder to incur ancillary facilities provided by any revolving lender party to the Senior Secured Credit Facilities (with certain restrictions). Up to $948.3 million of the revolving loan facility is available to be borrowed by (x) Darling in U.S. dollars, Canadian dollars, euros and other currencies to be agreed and available to each applicable lender, (y) Darling Canada in Canadian dollars and (z) Darling NL, Darling Ingredients International Holding B.V. (“Darling BV”) and Darling Ingredients Germany Holding GmbH in U.S. dollars, Canadian dollars, euros and other currencies to be agreed and available to each applicable lender. The revolving loan facility and term loan A facility will mature on December 16, 2021. The revolving loan facility will be used for working capital needs, general corporate purposes and other purposes not prohibited by the Amended Credit Agreement. The interest rate applicable to any borrowings under the term loan A facility and the revolving loan facility will equal either LIBOR/euro interbank offered rate/CDOR plus 2.00% per annum or base rate/Canadian prime rate plus 1.00% per annum, subject to certain step-ups or step-downs based on the Company's total leverage ratio. The interest rate applicable to any borrowings under the term loan B facility will equal the base rate plus 1.00% or LIBOR plus 2.00%. As of March 30, 2019, the Company had $38.3 million outstanding under the term loan A facility at LIBOR plus a margin of 2.00% per annum for a total of 4.50% per annum and $13.0 million outstanding under the revolver at base rate plus a margin of 1.00% per annum for a total of 6.50% per annum. The Company had $485.0 million outstanding under the term loan B facility at LIBOR plus a margin of 2.00% per annum for a total of 4.50% per annum and $10.0 million at base rate plus a margin of 1.00% per annum for a total of 6.50%. The Company had CAD$30.6 million outstanding under the term loan A facility at CDOR plus a margin of 2.00% per annum for a total of 4.0572%. The Company had €33.0 million under the revolver at LIBOR plus a margin of 2.00% for a total of 2.00% per annum. As of March 30, 2019, the Company had availability of $901.5 million under the Amended Credit Agreement taking into account amounts borrowed, ancillary facilities and letters of credit issued of $23.5 million. The Company also has foreign bank guarantees that are not part of the Company's Amended Credit Agreement in the amount of approximately $17.8 million at March 30, 2019. 5.375 % Senior Notes due 2022. On January 2, 2014, Darling Escrow Corporation, a wholly-owned subsidiary of Darling, issued and sold $500.0 million aggregate principal amount of its 5.375% Notes due 2022 (the “5.375% Notes”). The 5.375% Notes, which were offered in a private offering in connection with the Company's acquisition in January 2014 of its Darling Ingredients International business from VION Holding, N.V., were issued pursuant to a 5.375% Notes Indenture, dated as of January 2, 2014 (the “Original 5.375% Indenture”) (as supplemented, the “5.375% Indenture”), among Darling Escrow Corporation, the subsidiary guarantors party thereto from time to time, and U.S. Bank National Association, as trustee. 3.625% Senior Notes due 2026. On May 2, 2018, Darling Global Finance B.V. issued and sold €515.0 million aggregate principal amount of 3.625% Senior Notes due 2026 (the “3.625% Notes”). The 3.625% Notes, which were offered in a private offering, were issued pursuant to a Senior Notes Indenture, dated as of May 2, 2018 (the “3.625% Indenture”), among Darling Global Finance B.V., Darling, the subsidiary guarantors party thereto from time to time, Citibank, N.A., London Branch, as trustee and principal paying agent, and Citigroup Global Markets Deutschland AG, as principal registrar. The 3.625% Notes are guaranteed on a senior unsecured basis by Darling and all of Darling's restricted subsidiaries (other than any foreign subsidiary or any receivable entity) that guarantee the Senior Secured Credit Facilities. As of March 30, 2019, the Company believes it is in compliance with all of the financial covenants under the Amended Credit Agreement, as well as all of the other covenants contained in the Amended Credit Agreement, the 5.375% Indenture and the 3.625% Indenture. 5.25 % Senior Notes due 2027. On April 3, 2019, Darling issued and sold $500.0 million aggregate principal amount of 5.25% Senior Notes due 2027 (the “5.25% Notes”). The 5.25% Notes, which were offered in a private offering, were issued pursuant to a Senior Notes Indenture, dated as of April 3, 2019 (the “5.25% Indenture”), among Darling, the subsidiary guarantors party thereto from time to time, and Regions Bank, as trustee. The gross proceeds from the sale of the Notes, together with cash on hand, were used to refinance all of the Company's 5.375% Notes, by cash tender offer for and redemption of those notes, to pay the discount of the initial purchasers and to pay the other fees and expenses related to the offering of the 5.25% Notes. |
Income Taxes |
3 Months Ended |
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Mar. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company has provided income taxes for the three month periods ended March 30, 2019 and March 31, 2018, based on its estimate of the effective tax rate for the entire 2019 and 2018 fiscal years. The Company’s estimated annual effective tax rate is based on forecasts of income by jurisdiction, permanent differences between book and tax income, the relative proportion of income and losses by jurisdiction, and statutory income tax rates. Discrete events such as the assessment of the ultimate outcome of tax audits, audit settlements, recognizing previously unrecognized tax benefits due to the lapsing of statutes of limitation, recognizing or derecognizing deferred tax assets due to projections of income or loss and changes in tax laws are recognized in the period in which they occur. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company expects to have access to its offshore earnings with no material U.S. tax impact. Therefore, the Company does not consider earnings from its foreign subsidiaries to be permanently reinvested offshore. The Company periodically assesses whether it is more likely than not that it will generate sufficient taxable income to realize its deferred income tax assets. In making this determination, the Company considers all available positive and negative evidence and makes certain assumptions. The Company considers, among other things, its deferred tax liabilities, the overall business environment, its historical earnings and losses, current industry trends and its outlook for future years. Unrecognized tax benefits represent the difference between tax positions taken or expected to be taken in a tax return and the benefits recognized for financial statement purposes. As of March 30, 2019, the Company had $4.3 million of gross unrecognized tax benefits and $0.7 million of related accrued interest and penalties. It is reasonably possible within the next twelve months that the Company’s gross unrecognized tax benefits may decrease by up to $0.3 million, excluding interest and penalties, primarily due to potential settlements and expiration of certain statutes of limitations. The Company’s major taxing jurisdictions include the United States (federal and state), Canada, the Netherlands, Belgium, Brazil, Germany, France and China. The Company is subject to regular examination by various tax authorities and although the final outcome of these examinations is not yet determinable, the Company does not anticipate that any of the examinations will have a significant impact on the Company's results of operations or financial position. The statute of limitations for the Company’s major tax jurisdictions is open for varying periods, but is generally closed through the 2010 tax year. |
Other Comprehensive Income |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Comprehensive Income | Other Comprehensive Income/(Loss) The Company follows FASB authoritative guidance for reporting and presentation of comprehensive income/(loss) and its components. Other comprehensive income/(loss) is derived from adjustments that reflect pension adjustments, natural gas swap adjustments, corn option adjustments, foreign exchange forward adjustments and foreign currency translation adjustments. The components of other comprehensive income (loss) and the related tax impacts for the three months ended March 30, 2019 and March 31, 2018 are as follows (in thousands):
The following table presents the amounts reclassified out of each component of other comprehensive income (loss), net of tax for the three months ended March 30, 2019 and March 31, 2018 as follows (in thousands):
The following table presents changes in each component of accumulated other comprehensive income/(loss) as of March 30, 2019 as follows (in thousands):
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Stockholders' Equity |
3 Months Ended |
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Mar. 30, 2019 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders' Equity Fiscal 2019 Long-Term Incentive Opportunity Awards (2019 LTIP). On January 25, 2019, the Compensation Committee (the “Committee”) of the Company's Board of Directors adopted the 2019 LTIP pursuant to which they awarded certain of the Company's key employees, 610,953 stock options and 305,195 performance share units (the “PSUs”) under the Company's 2017 Omnibus Incentive Plan. The stock options vest 33.33% on the first, second and third anniversaries of the grant date. The PSUs are tied to a three-year forward-looking performance period and will be earned based on the Company's average return on capital employed (“ROCE”), as calculated in accordance with the terms of the award agreement, relative to the average ROCE of the Company's performance peer group companies, with the earned award to be determined in the first quarter of fiscal 2022, after the final results for the relevant performance period are determined. The PSUs were granted at a target of 100%, but each PSU will reduce or increase depending on the Company's ROCE relative to that of the performance peer group companies and is also subject to the application of a total shareholder return (“TSR”) cap/collar modifier depending on the Company's TSR during the performance period relative to that of the performance peer group companies. As of March 30, 2019, the Company has approximately $200.0 million remaining under the share repurchase program initially approved in August 2017 and subsequently extended to August 13, 2020. |
Employee Benefit Plans |
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Retirement Benefits [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Employee Benefit Plans | Employee Benefit Plans The Company has retirement and pension plans covering a substantial number of its domestic and foreign employees. Most retirement benefits are provided by the Company under separate final-pay noncontributory and contributory defined benefit and defined contribution plans for all salaried and hourly employees (excluding those covered by union-sponsored plans) who meet service and age requirements. Although various defined benefit formulas exist for employees, generally these are based on length of service and earnings patterns during employment. Effective January 1, 2012, the Company's Board of Directors authorized the Company to proceed with the restructuring of its domestic retirement benefit program to include the closing of Darling's salaried and hourly defined benefit plans to new participants as well as the freezing of service and wage accruals thereunder effective December 31, 2011 (a curtailment of these plans for financial reporting purposes) and the enhancing of benefits under the Company's domestic defined contribution plans. The Company-sponsored domestic hourly union plan has not been curtailed; however, several locations of the Company-sponsored domestic hourly union plan have been curtailed as a result of collective bargaining renewals for those sites. Net pension cost for the three ended March 30, 2019 and March 31, 2018 includes the following components (in thousands):
The Company's funding policy for employee benefit pension plans is to contribute annually not less than the minimum amount required nor more than the maximum amount that can be deducted for federal and foreign income tax purposes. Contributions are intended to provide not only for benefits attributed to service to date, but also for those expected to be earned in the future. Based on actuarial estimates at March 30, 2019, the Company expects to contribute approximately $4.2 million to its pension plans to meet funding requirements during the next twelve months. Additionally, the Company has made tax deductible discretionary and required contributions to its pension plans for the three months ended March 30, 2019 and March 31, 2018 of approximately $0.9 million and $0.8 million, respectively. The Company participates in various multiemployer pension plans which provide defined benefits to certain employees covered by labor contracts. These plans are not administered by the Company and contributions are determined in accordance with provisions of negotiated labor contracts to meet their pension benefit obligations to their participants. The Company's contributions to each multiemployer plan represent less than 5% of the total contributions to each such plan. Based on the most currently available information, the Company has determined that, if a withdrawal were to occur, withdrawal liabilities on two of the plans in which the Company currently participates could be material to the Company, with one of these material plans certified as critical or red zone. With respect to the other multiemployer pension plans in which the Company participates and which are not individually significant, five plans have certified as critical or red zone, two plans have certified as endangered or yellow zone as defined by the Pension Protection Act of 2006. The Company has received notices of withdrawal liability from two U.S. multiemployer plans in which it participated. As of March 30, 2019, the Company has an aggregate accrued liability of approximately $1.6 million representing the present value of scheduled withdrawal liability payments under these multiemployer plans. While the Company has no ability to calculate a possible current liability for under-funded multiemployer plans that could terminate or could require additional funding under the Pension Protection Act of 2006, the amounts could be material. |
Derivatives |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivatives | Derivatives The Company’s operations are exposed to market risks relating to commodity prices that affect the Company’s cost of raw materials, finished product prices and energy costs and the risk of changes in interest rates and foreign currency exchange rates. The Company makes limited use of derivative instruments to manage cash flow risks related to natural gas usage, diesel fuel usage, inventory, forecasted sales and foreign currency exchange rates. The Company does not use derivative instruments for trading purposes. Natural gas swaps and options are entered into with the intent of managing the overall cost of natural gas usage by reducing the potential impact of seasonal weather demands on natural gas that increases natural gas prices. Heating oil swaps and options are entered into with the intent of managing the overall cost of diesel fuel usage by reducing the potential impact of seasonal weather demands on diesel fuel that increases diesel fuel prices. Soybean meal options are entered into with the intent of managing the impact of changing prices for poultry meal sales. Corn options and future contracts are entered into with the intent of managing U.S. forecasted sales of bakery by-products (“BBP”) by reducing the impact of changing prices. Foreign currency forward contracts are entered into to mitigate the foreign exchange rate risk for transactions designated in a currency other than the local functional currency. At March 30, 2019, the Company had foreign exchange forward and option contracts outstanding that qualified and were designated for hedge accounting as well as corn forward contracts and foreign currency forward contracts that did not qualify and were not designated for hedge accounting. Entities are required to report all derivative instruments in the statement of financial position at fair value. The accounting for changes in the fair value (i.e., gains or losses) of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and, if so, on the reason for holding the instrument. If certain conditions are met, entities may elect to designate a derivative instrument as a hedge of exposures to changes in fair value, cash flows or foreign currencies. If the hedged exposure is a cash flow exposure, the gain or loss on the derivative instrument is reported initially as a component of other comprehensive income (outside of earnings) and is subsequently reclassified into earnings when the forecasted transaction affects earnings. Any amounts excluded from the assessment of hedge effectiveness are reported in earnings immediately. If the derivative instrument is not designated as a hedge, the gain or loss is recognized in earnings in the period of change. Cash Flow Hedges In fiscal 2018 and the first three months of fiscal 2019, the Company entered into foreign exchange forward and option contracts that are considered cash flow hedges. Under the terms of the foreign exchange contracts, the Company hedged a portion of its forecasted peptan sales in currencies other than the functional currency through the fourth quarter of fiscal 2022. At March 30, 2019 and December 29, 2018, the aggregate fair value of these foreign exchange contracts was approximately $4.0 million and $1.6 million, respectively. The March 30, 2019 amounts are included in other current assets, accrued expense, other assets and noncurrent liabilities on the balance sheet, with an offset recorded in accumulated other comprehensive loss. The December 29, 2018 amounts are included in other current assets, accrued expense and noncurrent liabilities on the balance sheet, with an offset recorded in accumulated other comprehensive loss. As of March 30, 2019, the Company had the following outstanding forward and option contract amounts that were entered into to hedge foreign currency transactions in currencies other than the functional currency and forecasted transactions in currencies other than the functional currency (in thousands):
The Company estimates the amount that will be reclassified from accumulated other comprehensive loss at March 30, 2019 into earnings over the next 12 months will be approximately $2.1 million. As of March 30, 2019, no amounts have been reclassified into earnings as a result of the discontinuance of cash flow hedges. The table below summarizes the effect of derivatives not designated as hedges on the Company's consolidated statements of operations for the three ended March 30, 2019 and March 31, 2018 (in thousands):
At March 30, 2019, the Company had forward purchase agreements in place for purchases of approximately $16.6 million of natural gas and diesel fuel. These forward purchase agreements have no net settlement provisions and the Company intends to take physical delivery of the underlying product. Accordingly, the forward purchase agreements are not subject to the requirements of fair value accounting because they qualify and the Company has elected to account for these as normal purchases as defined in the FASB authoritative guidance. |
Fair Value Measurement |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements FASB authoritative guidance defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. The following table presents the Company’s financial instruments that are measured at fair value on a recurring and nonrecurring basis as of March 30, 2019 and are categorized using the fair value hierarchy under FASB authoritative guidance. The fair value hierarchy has three levels based on the reliability of the inputs used to determine the fair value.
Derivative assets and liabilities consist of the Company’s corn future contracts and foreign currency contracts, which represents the difference between observable market rates of commonly quoted intervals for similar assets and liabilities in active markets and the fixed swap rate considering the instruments term, notional amount and credit risk. See Note 15 (Derivatives) for discussion on the Company's derivatives. The carrying amount of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses approximates fair value due to the short maturity of these instruments and as such have been excluded from the table above. The carrying amount of the Company's other debt is not deemed to be significantly different from the fair value and all other instruments have been recorded at fair value. The fair value of the senior notes, term loan A, term loan B and revolver debt is based on market quotation from third-party banks. |
Contingencies |
3 Months Ended |
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Mar. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | Contingencies The Company is a party to various lawsuits, claims and loss contingencies arising in the ordinary course of its business, including insured worker's compensation, auto, and general liability claims, assertions by certain regulatory and governmental agencies related to permitting requirements and/or air, wastewater and storm water discharges from the Company’s processing facilities, litigation involving tort, contract, statutory, labor, employment, and other claims, and tax matters. The Company’s workers compensation, auto and general liability policies contain significant deductibles or self-insured retentions. The Company estimates and accrues its expected ultimate claim costs related to accidents occurring during each fiscal year under these insurance policies and carries this accrual as a reserve until these claims are paid by the Company. As a result of the matters discussed above, the Company has established loss reserves for insurance, environmental, litigation and tax contingencies. At March 30, 2019 and December 29, 2018, the reserves for insurance, environmental, litigation and tax contingencies reflected on the balance sheet in accrued expenses and other non-current liabilities were approximately $66.8 million and $66.6 million, respectively. The Company has insurance recovery receivables of approximately $26.1 million as of March 30, 2019 and December 29, 2018, related to the insurance contingencies. The Company's management believes these reserves for contingencies are reasonable and sufficient based upon present governmental regulations and information currently available to management; however, there can be no assurance that final costs related to these contingencies will not exceed current estimates. The Company believes that the likelihood is remote that any additional liability from the lawsuits and claims that may not be covered by insurance would have a material effect on the Company's financial position, results of operations or cash flows. Lower Passaic River Area. In December 2009, the Company, along with numerous other entities, received notice from the United States Environmental Protection Agency (“EPA”) that the Company (as alleged successor-in-interest to The Standard Tallow Corporation) is considered a potentially responsible party (a “PRP”) with respect to alleged contamination in the lower 17-mile area of the Passaic River which is part of the Diamond Alkali Superfund Site located in Newark, New Jersey. The Company’s designation as a PRP is based upon the operation of former plant sites located in Newark and Kearny, New Jersey by The Standard Tallow Corporation, an entity that the Company acquired in 1996. In the letter, EPA requested that the Company join a group of other parties in funding a remedial investigation and feasibility study at the site. As of the date of this report, the Company has not agreed to participate in the funding group. In March 2016, the Company received another letter from EPA notifying the Company that it had issued a Record of Decision (the “ROD”) selecting a remedy for the lower 8.3 miles of the lower Passaic River area at an estimated cost of $1.38 billion. The EPA letter makes no demand on the Company and lays out a framework for remedial design/remedial action implementation in which the EPA will first seek funding from major PRPs. The letter indicates that the EPA has sent the letter to over 100 parties, which include large chemical and refining companies, manufacturing companies, foundries, plastic companies, pharmaceutical companies and food and consumer product companies. The EPA has already offered early cash out settlements to 20 of the other PRPs and has stated that other parties who did not discharge any of the eight contaminants of concern identified in the ROD (the “COCs”) may also be eligible for cash out settlements and has begun a settlement analysis using a third-party allocator. The Company is participating in this allocation process as it asserts that it is not responsible for any liabilities of its former subsidiary The Standard Tallow Corporation, which was legally dissolved in 2000, and that, in any event, The Standard Tallow Corporation did not discharge any of the COCs. On September 30, 2016, Occidental Chemical Corporation (“OCC”) entered into an agreement with the EPA to perform the remedial design for the cleanup plan for the lower 8.3 miles of the Passaic River. On June 30, 2018, OCC filed a complaint in the United States District Court for the District of New Jersey against over 100 companies, including the Company, seeking cost recovery or contribution for costs under the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”) relating to various investigations and cleanups OCC has conducted or is conducting in connection with the Passaic River. According to the complaint, OCC has incurred or is incurring costs which include the estimated cost to complete the remedial design for the cleanup plan for the lower 8.3 miles of the Passaic River. OCC is also seeking a declaratory judgment to hold the defendants liable for their proper shares of future response costs, including the remedial action for the lower 8.3 miles of the Passaic River. The Company, along with 40 of the other defendants, had previously received a release from OCC of its CERCLA contribution claim of $165 million associated with the costs to design the remedy for the lower 8.3 miles of the Passaic River. The Company's ultimate liability, if any, for investigatory costs, remedial costs and/or natural resource damages in connection with the lower Passaic River area cannot be determined at this time; however, as of the date of this report, the Company has found no definitive evidence that the former Standard Tallow Corporation plant sites contributed any of the COCs to the Passaic River and, therefore, there is nothing that leads the Company to believe that this matter will have a material effect on the Company's financial position, results of operations or cash flows. Fresno Facility Permit Issue. The Company has been named as a defendant and a real party in interest in a lawsuit filed on April 9, 2012 in the Superior Court of the State of California, Fresno County, styled Concerned Citizens of West Fresno vs. Darling International Inc. The complaint, as subsequently amended, alleges that the Company's Fresno facility is operating without a proper use permit and seeks, among other things, injunctive relief. The complaint had at one time also alleged that the Company's Fresno facility constitutes a continuing private and public nuisance, but the plaintiff has since amended the complaint to drop these allegations. The City of Fresno was also named as a defendant in the original complaint but has since had a judgment entered in its favor and is no longer a defendant in the lawsuit; however, in December 2013 the City of Fresno filed a motion to intervene as a plaintiff in this matter. The Superior Court heard the motion on February 4, 2014, and entered an order on February 18, 2014 denying the motion. Rendering operations have been conducted on the site since 1955, and the Company believes that it possesses all of the required federal, state and local permits to continue to operate the facility in the manner currently conducted and that its operations do not constitute a private or public nuisance. Accordingly, the Company intends to defend itself vigorously in this matter. Discovery has begun and this matter was scheduled for trial in July 2014; however, the parties have agreed to stay the litigation while they participate in a mediation process, which remains ongoing. In January 2017, the Company entered into a non-binding letter of intent with the City of Fresno pursuant to which the City and the Company will work toward the execution of a definitive agreement to relocate the facility to a different location in Fresno. Whether an agreement to relocate the facility ultimately gets executed is subject to the Company’s receipt of certain incentives and an agreement by the Concerned Citizens of West Fresno to settle and dismiss the aforementioned litigation. While management cannot predict the ultimate outcome of this matter, management does not believe the outcome will have a material effect on the Company's financial condition, results of operations or cash flows. |
Business Segments |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Segments | Business Segments The Company sells its products domestically and internationally, operating within three industry segments: Feed Ingredients, Food Ingredients and Fuel Ingredients. The measure of segment income (loss) includes all revenues, operating expenses (excluding certain amortization of intangibles), and selling, general and administrative expenses incurred at all operating locations and excludes corporate activities. Included in corporate activities are general corporate expenses and the amortization of certain intangibles. Assets of corporate activities include cash, unallocated prepaid expenses, deferred tax assets, prepaid pension, and miscellaneous other assets. Feed Ingredients Feed Ingredients consists principally of (i) the Company's U.S. ingredients business, including the Company's fats and proteins, used cooking oil, trap grease and food residuals collection businesses, the Rothsay ingredients business, the ingredients and specialty products businesses conducted by Darling Ingredients International under the Sonac name (proteins, fats, and plasma products) and (ii) the Company's bakery residuals business. Feed Ingredients operations process animal by-products and used cooking oil into fats, proteins and hides. Food Ingredients Food Ingredients consists principally of (i) the collagen business conducted by Darling Ingredients International under the Rousselot name, (ii) the natural casings and meat-by-products business conducted by Darling Ingredients International under the CTH name and (iii) certain specialty products businesses conducted by Darling Ingredients International under the Sonac name. Fuel Ingredients The Company's Fuel Ingredients segment consists of (i) the Company's investment in the DGD Joint Venture (ii) the Company's biofuel business conducted under the Dar Pro® and Rothsay names and (iii) the bioenergy business conducted by Darling Ingredients International under the Ecoson and Rendac names. Business Segments (in thousands):
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Revenue (Notes) |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue | Revenue The Company extends payment terms to its customers based on commercially acceptable practices. The term between invoicing and payment due date is not significant. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring finished products or performing services, which is generally based on executed agreement or purchase order. Most of the Company's products are shipped based on the customer specifications. Customer returns are infrequent and not material to the Company. Adjustments to net sales for sales deductions are generally recognized in the same period as the sale or when known. Customers in certain industries or countries may be required to prepay prior to shipment in order to maintain payment protection. These represent short-term prepayment from customers and are not material to the Company. The following tables presents the Company revenues disaggregated by geographic area and major product types by reportable segment for the three months ended March 30, 2019 and March 31, 2018 (in thousands):
Revenue from Contracts with Customers The Company has two primary revenue streams. Finished product revenues are recognized when control of the promised finished product is transferred to the Company's customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for the finished product. Service revenues are recognized when the service occurs. Fats and Proteins. Fats and Proteins include the Company's global activities related to the collection and processing of beef, poultry and pork animal by-products into finished products of non-food grade oils, food grade fats and protein meal. Fats and proteins net sales are recognized when the Company ships the finished product to the customer and control has been transferred. Used Cooking Oil. Used cooking oil includes collection and processing of used cooking oil into finished products of non-food grade fats. Used cooking oil net sales are recognized when the Company ships the finished product to the customer and control has been transferred. Bakery. Bakery includes collection and processing of bakery residuals into finished product including Cookie Meal®, an animal feed ingredient primarily used in poultry and swine rations. Bakery net sales are recognized when the Company ships the finished product to the customer and control has been transferred. Other Rendering. Other rendering include hides, pet food products, and service charges. Hides and pet food net sales are recognized when the Company ships the finished product to the customer and control has been transferred. Service revenues are recognized when the service has occurred. Food Ingredients. Food ingredients includes collection and processing of pigskin, hide, bone and fish into finished product. Also includes harvesting, sorting and selling of hog and sheep casings as well as harvesting, purchasing and processing of hog, sheep and beef meat for pet food industry. Collagen and CTH meat and casings net sales are recognized when the Company ships the finished product to the customer and control has been transferred. Bioenergy. Bioenergy includes Ecoson, which converts organic sludge and food waste into biogas and Rendac, which collects fallen stock and animal waste for a fee and processes these materials into fats and meals that can only be used as low grade energy or fuel for boilers and cement kilns. Net sales are recognized when the finished product is shipped to the customer and control has been transferred. Service revenues are recognized in net sales when the service has occurred. Biofuels. Biofuels includes the North American processing of rendered animal fats, recycled cooking oils and third party additives to produce diesel fuel. Biofuel net sales are recognized when the finished product is shipped to the customer and control has been transferred. Performance Obligations. The Company from time to time enters into long-term contracts to supply certain volumes of finished products to certain customers. Revenue recognized to date in 2019 under these long-term supply contracts was approximately $3.9 million, with the remaining performance obligations to be recognized in future periods (generally 5 years) of approximately $317.9 million. Other. Other includes grease trap collection and environmental services to food processors in the Feed Ingredients segment and Sonac Bone and Sonac Heparin in the Food Ingredients segment. Net sales are recognized when the Company ships the finished product to the customer. Service revenues are recognized when the service has occurred. |
Related Party Transactions |
3 Months Ended |
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Mar. 30, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions Raw Material Agreement The Company entered into a Raw Material Agreement with the DGD Joint Venture in May 2011 pursuant to which the Company will offer to supply certain animal fats and used cooking oil at market prices, up to the DGD Joint Venture's full operational requirement of feedstock, but the DGD Joint Venture is not obligated to purchase the raw material offered by the Company. Additionally, the Company may offer other feedstocks to the DGD Joint Venture, such as inedible corn oil, purchased on a resale basis. For the three months ended March 30, 2019 and March 31, 2018, the Company has recorded sales to the DGD Joint Venture of approximately $51.2 million and $33.1 million, respectively. At March 30, 2019 and December 29, 2018, the Company has $6.7 million and $8.0 million in outstanding receivables due from the DGD Joint Venture, respectively. In addition, the Company has eliminated approximately $5.9 million of additional sales for the three months ended March 30, 2019 to defer the Company's portion of profit of approximately $1.0 million on those sales relating to inventory assets remaining on the DGD Joint Venture's balance sheet at March 30, 2019. Revolving Loan Agreement On May 1, 2019, Darling through its wholly owned subsidiary Darling Green Energy LLC, (“Darling Green”), and Diamond Alternative Energy, LLC, a wholly owned subsidiary of Valero (“Diamond Alternative” and together with Darling Green, the “DGD Lenders”), entered into a revolving loan agreement (the “DGD Loan Agreement”) with the DGD Joint Venture. The DGD Lenders have committed to making loans available to the DGD Joint Venture in the total amount of $50.0 million with each lender committed to $25.0 million of the total commitment. Any borrowings by the DGD Joint Venture under the DGD Loan Agreement are at the applicable annum rate equal to the sum of (a) the LIBO Rate (meaning Reuters BBA Libor Rates Page 3750) on such day plus (b) 2.50%. The DGD Loan Agreement matures on April 29, 2020, unless extended by agreement of the parties. The DGD Loan Agreement replaces a similar agreement with lower commitment levels that expired on December 31, 2018. As of March 30, 2019, no amounts are owed to Darling Green under the DGD Loan Agreement. |
New Accounting Pronoucements |
3 Months Ended |
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Mar. 30, 2019 | |
New Accounting Pronoucements [Abstract] | |
New Accounting Pronouncements | New Accounting Pronouncements In August 2018, the FASB issued ASU No. 2018-15, Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract. This ASU amends Subtopic 350-40, Intangibles - Goodwill and Other Internal - Use Software, which will align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The standard is effective for fiscal years beginning after December 15, 2019 and for interim periods therein, with early adoption permitted. Implementation should be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. The Company adopted the new accounting standard effective December 30, 2018 and the adoption did not have a material impact on the Company's consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-14, Changes to the Disclosure Requirements for Defined Benefit Plans. This ASU amends Subtopic 715-20, Compensation - Retirement Benefits - Defined Benefit Plans - General, which modifies the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans by removing and adding certain disclosures for these plans. The standard is effective for fiscal years ending after December 15, 2020, with early adoption permitted. The Company is currently evaluating the impact of this standard. In August 2018, the FASB issued ASU No. 2018-13, Changes to the Disclosure Requirements for Fair Value Measurements. This ASU amends Topic 820, Fair Value Measurement, which changes the disclosure requirements for fair value measurements by removing, adding and modifying certain disclosures. The standard is effective for fiscal years beginning after December 15, 2019 and for interim periods therein, with early adoption permitted. The Company is currently evaluating the impact of this standard. In August 2017, the FASB issued ASU No. 2017-12, Targeted Improvement to Accounting for Hedging Activities. This ASU amends Topic 815, Derivatives and Hedging, which is intended to more closely align hedge accounting with companies' risk management strategies and simplify the application of hedge accounting. The guidance includes certain targeted improvements to ease the operational burden of applying hedge accounting. The ASU is effective for fiscal years beginning after December 15, 2018 and for interim periods therein with early adoption permitted. The Company will be required to apply the guidance on a cumulative-effect basis with adjustment to retained earnings as of the beginning of the fiscal year of adoption with disclosure on a prospective basis. The Company adopted this ASU on December 30, 2018 and the initial adoption of this ASU did not have a material impact on the Company's consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-04 Simplifying the Test for Goodwill Impairment. This ASU amends Topic 350, Intangibles-Goodwill and Other, which will simplify the goodwill impairment calculation by eliminating Step 2 from the current goodwill impairment test. Under the new guidance, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. The ASU eliminates existing guidance that requires an entity to determine goodwill impairment by calculating the implied fair value of goodwill by hypothetically assigning the fair value of a reporting unit to all of the assets and liabilities as if that reporting unit had been acquired in a business combination. This ASU is effective for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years. The initial adoption of this ASU is not expected to have a material impact on the Company's consolidated financial statements. |
Guarantor Financial Information |
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Guarantor Financial Information [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Guarantor Financial Information | Guarantor Financial Information The Company's 5.375% Notes and 3.625% Notes (see Note 10) are guaranteed on a senior unsecured basis by the following Notes Guarantors, each of which is a 100% directly or indirectly owned subsidiary of Darling and which constitute all of Darling's existing restricted subsidiaries that are Credit Agreement Guarantors (other than Darling's foreign subsidiaries, Darling Global Finance B.V., which issued the 3.625% Notes and is discussed further below, or any receivables entity): Darling National, Griffin and its subsidiary Craig Protein, Darling AWS LLC, Darling Global Holdings Inc., Darling Northstar LLC, EV Acquisition, LLC, Rousselot Inc., Rousselot Dubuque Inc., Sonac USA LLC and Rousselot Peabody Inc. In addition, the 3.625% Notes, which were issued by Darling Global Finance B.V., a wholly-owned indirect subsidiary of Darling, are guaranteed on a senior unsecured basis by Darling. The Notes Guarantors, and Darling in the case of the 3.625% Notes, fully and unconditionally guaranteed the 5.375% Notes and 3.625% Notes on a joint and several basis. The following financial statements present condensed consolidated financial data for (i) Darling, (ii) the combined Notes Guarantors, (iii) the combined other subsidiaries of the Company that did not guarantee the 5.375% Notes or the 3.625% Notes (the “Non-guarantors”), and (iv) eliminations necessary to arrive at the Company's consolidated financial statements, which include condensed consolidated balance sheets as of March 30, 2019 and December 29, 2018, and the condensed consolidated statements of operations, the condensed consolidated statements of comprehensive income/(loss) and the condensed consolidated statements of cash flows for the three months ended March 30, 2019 and March 31, 2018. Separate financial information is not presented for Darling Global Finance B.V. since it was formed as a special purpose finance subsidiary for the purpose of issuing euro-denominated notes such as the 3.625% Notes and therefore does not have any substantial operations or assets. Condensed Consolidated Balance Sheet As of March 30, 2019 (in thousands)
Condensed Consolidated Balance Sheet As of December 29, 2018 (in thousands)
Condensed Consolidated Statements of Operations For the three months ended March 30, 2019 (in thousands)
Condensed Consolidated Statements of Operations For the three months ended March 31, 2018 (in thousands)
Condensed Consolidated Statements of Comprehensive Income/(Loss) For the three months ended March 30, 2019 (in thousands)
Condensed Consolidated Statements of Comprehensive Income/(Loss) For the three months ended March 31, 2018 (in thousands)
Condensed Consolidated Statements of Cash Flows For the three months ended March 30, 2019 (in thousands)
Condensed Consolidated Statements of Cash Flows For the three months ended March 31, 2018 (in thousands)
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Summary of Significant Accounting Policies (Policies) |
3 Months Ended |
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Mar. 30, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The consolidated financial statements include the accounts of Darling and its consolidated subsidiaries. Noncontrolling interests represent the outstanding ownership interest in the Company's consolidated subsidiaries that are not owned by the Company. In the accompanying Consolidated Statements of Operations, the noncontrolling interest in net income of the consolidated subsidiaries is shown as an allocation of the Company's net income and is presented separately as “Net income attributable to noncontrolling interests.” In the Company's Consolidated Balance Sheets, noncontrolling interests represent the ownership interests in the Company consolidated subsidiaries' net assets held by parties other than the Company. These ownership interests are presented separately as “Noncontrolling interests” within “Stockholders' Equity.” All significant intercompany balances and transactions have been eliminated in consolidation. |
Fiscal Periods | Fiscal Periods The Company has a 52/53 week fiscal year ending on the Saturday nearest December 31. Fiscal periods for the consolidated financial statements included herein are as of March 30, 2019, and include the 13 weeks ended March 30, 2019, and the 13 weeks ended March 31, 2018. |
Cash, Cash Equivalents and Restricted Cash | Cash, Cash Equivalents and Restricted Cash The Company considers all short-term highly liquid instruments, with an original maturity of three months or less, to be cash equivalents. Cash balances are recorded net of book overdrafts when a bank right-of-offset exists. All other book overdrafts are recorded in accounts payable and the change in the related balance is reflected in operating activities on the Consolidated Statement of Cash Flows. In addition, the Company has bank overdrafts, which are considered a form of short-term financing with changes in the related balance reflected in financing activities in the Consolidated Statement of Cash Flows. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts The Company maintains allowances for doubtful accounts for estimated losses resulting from customers’ non-payment of trade accounts receivable owed to the Company. These trade receivables arise in the ordinary course of business from sales of raw material, finished product or services to the Company’s customers. The estimate of allowance for doubtful accounts is based upon the Company’s bad debt experience, prevailing market conditions, and aging of trade accounts receivable, among other factors. If the financial condition of the Company’s customers deteriorates, resulting in the customers’ inability to pay the Company’s receivables as they come due, additional allowances for doubtful accounts may be required. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue on sales when control of the promised finished product is transferred to the Company's customers in an amount that reflects the consideration the Company expects to be entitled to in exchange for the finished product. Service revenues are recognized when the service occurs. Certain customers may be required to prepay prior to shipment in order to maintain payment protection related to certain foreign and domestic sales. These amounts are recorded as unearned revenue and recognized when control of the promised finished product is transferred to the Company's customer. |
Income Taxes | The Company has provided income taxes for the three month periods ended March 30, 2019 and March 31, 2018, based on its estimate of the effective tax rate for the entire 2019 and 2018 fiscal years. The Company’s estimated annual effective tax rate is based on forecasts of income by jurisdiction, permanent differences between book and tax income, the relative proportion of income and losses by jurisdiction, and statutory income tax rates. Discrete events such as the assessment of the ultimate outcome of tax audits, audit settlements, recognizing previously unrecognized tax benefits due to the lapsing of statutes of limitation, recognizing or derecognizing deferred tax assets due to projections of income or loss and changes in tax laws are recognized in the period in which they occur. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company expects to have access to its offshore earnings with no material U.S. tax impact. Therefore, the Company does not consider earnings from its foreign subsidiaries to be permanently reinvested offshore. The Company periodically assesses whether it is more likely than not that it will generate sufficient taxable income to realize its deferred income tax assets. In making this determination, the Company considers all available positive and negative evidence and makes certain assumptions. The Company considers, among other things, its deferred tax liabilities, the overall business environment, its historical earnings and losses, current industry trends and its outlook for future years. |
Foreign Currency Translation and Remeasurement | Foreign Currency Translation and Remeasurement Foreign currency translation is included as a component of accumulated other comprehensive loss and reflects the adjustments resulting from translating the foreign currency denominated financial statements of foreign subsidiaries into U.S. dollars. The functional currency of the Company's foreign subsidiaries is the currency of the primary economic environment in which the entity operates, which is generally the local currency of the country. Accordingly, assets and liabilities of the foreign subsidiaries are translated into U.S. dollars at fiscal period end exchange rates, including intercompany foreign currency transactions that are of long-term investment nature. Income and expense items are translated at average exchange rates occurring during the period. Changes in exchange rates that affect cash flows and the related receivables or payables are recognized as transaction gains and losses in determining net income. |
Leases | Leases The Company accounts for leases in accordance with Accounting Standard Codification (“ASC”) Topic 842, leases. The Company determines if an arrangement is a lease at inception for which the Company recognizes the right-of-use (“ROU”) asset and a lease liability at the lease commencement date. For operating leases, the lease liability is initially and subsequently measured at the present value of the unpaid lease payments at the lease commencement date. In determining the lease liability, the Company applies a discount rate to the minimum lease payments within each lease. ASC 842 requires the Company to use the rate of interest that a lessee would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. To estimate the Company's incremental borrowing rate over various terms, a comparable market yield curve consistent with the Company's credit quality is determined. The lease term for all of the Company's leases include the noncancellable period of the lease plus any additional periods covered by either a Company option to extend the lease that the Company is reasonably certain to exercise or when a triggering event occurs. The Company has elected to not recognize a ROU asset and lease liability with an initial term of 12 months or less at lease commencement. Current operating leases are included on the Company's balance sheet as a ROU asset, current operating lease liabilities and long-term operating lease liabilities. For finance leases, the lease liability is initially measured in the same manner and date as for the operating leases, and is subsequently measured at amortized cost using the effective interest method. Finance leases are included in property, plant and equipment, current portion of long-term debt and long-term debt, net of current portion, but are not significant to the Company. The ROU asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for lease payments made at or before the lease commencement date, plus any direct costs incurred less any lease incentives received. For operating leases, the ROU asset is subsequently measured throughout the lease term at the carrying amount of the lease liability, plus initial direct costs, plus (minus) any prepaid (accrued) lease payments, less the unamortized balance of the lease incentives received. Some leases payments contain rent escalation clauses (including index-based escalations), initially measured using the index at the lease commencement date. The Company recognizes minimum rental expense on a straight-line basis based on the fixed components of the lease arrangement. The Company uses the long-lived assets impairment guidance in ASC subtopic 360-10, Property, Plant and Equipment - Overall, to determine whether the ROU asset is impaired, and if so, the amount of the impairment loss to recognize. The Company monitors for events or changes in circumstances that require a reassessment of one of its leases. When a reassessment results in the remeasurement of a lease liability, a corresponding adjustment is made to the carrying amount of the corresponding ROU asset unless doing so would reduce the carrying amount of the ROU asset to an amount less than zero. In that case, the amount of the adjustment that would result in a negative ROU asset balance is recorded in the consolidated statement of operations. |
Earnings Per Share | Earnings Per Share Basic income per common share is computed by dividing net income attributable to Darling by the weighted average number of common shares including non-vested and restricted shares outstanding during the period. Diluted income per common share is computed by dividing net income attributable to Darling by the weighted average number of common shares outstanding during the period increased by dilutive common equivalent shares determined using the treasury stock method. |
Summary of Significant Accounting Policies (Tables) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of Cash, Cash Equivalents and Restricted Cash | The following table provides a reconciliation of cash, cash equivalents and restricted cash on the consolidated balance sheet that sum to the total of the same amounts shown in the consolidated statement of cash flows (in thousands):
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Net Income per Common Share | Basic income per common share is computed by dividing net income attributable to Darling by the weighted average number of common shares including non-vested and restricted shares outstanding during the period. Diluted income per common share is computed by dividing net income attributable to Darling by the weighted average number of common shares outstanding during the period increased by dilutive common equivalent shares determined using the treasury stock method.
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Investment in Unconsolidated Subsidiary (Tables) |
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Equity Method Investments and Joint Ventures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity Method Investments | Selected financial information for the Company's DGD Joint Venture is as follows (in thousands):
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Inventories (Tables) |
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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Inventory | A summary of inventories follows (in thousands):
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Intangible Assets (Tables) |
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Intangible Asset Disclosure Text Block [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Intangible Assets | The gross carrying amount of intangible assets not subject to amortization and intangible assets subject to amortization is as follows (in thousands):
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Goodwill (Tables) |
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Mar. 30, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Intangible Asset Disclosure Text Block [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Goodwill | Changes in the carrying amount of goodwill (in thousands):
|
Accrued Expense (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accrued Expenses | Accrued expenses consist of the following (in thousands):
|
(Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Lease Expense | The components of operating lease expense included in cost of sales and operating expenses and selling, general and administrative expenses were as follows (in thousands):
Other information (in thousands, except lease terms and discount rates):
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Maturities of Operating Lease Liabilities | Future annual minimum lease payments and capital lease commitments as of March 30, 2019 were as follows (in thousands):
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||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Maturities of Financing Lease Liabilities | Future annual minimum lease payments and capital lease commitments as of March 30, 2019 were as follows (in thousands):
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||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Future Minimum Rental Payments for Leases | The Company adopted ASU 2016-02 on December 30, 2018 as noted above. The following disclosure is provided for periods prior to adoption. Future annual minimum lease payments and capital lease commitments as of December 29, 2018 were as follows (in thousands):
|
Debt (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Debt | Debt consists of the following (in thousands):
|
Other Comprehensive Income (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Comprehensive Income (Loss) | The components of other comprehensive income (loss) and the related tax impacts for the three months ended March 30, 2019 and March 31, 2018 are as follows (in thousands):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reclassification out of Accumulated Other Comprehensive Income (Loss) | The following table presents the amounts reclassified out of each component of other comprehensive income (loss), net of tax for the three months ended March 30, 2019 and March 31, 2018 as follows (in thousands):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accumulated Other Comprehensive Income (Loss) | The following table presents changes in each component of accumulated other comprehensive income/(loss) as of March 30, 2019 as follows (in thousands):
|
Employee Benefit Plans (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 30, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Benefits [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net pension cost | Net pension cost for the three ended March 30, 2019 and March 31, 2018 includes the following components (in thousands):
|
Derivatives (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Derivative Instruments | (in thousands):
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Schedule of Other Derivatives Not Designated as Hedging Instruments, Statements of Financial Performance and Financial Position, Location | The table below summarizes the effect of derivatives not designated as hedges on the Company's consolidated statements of operations for the three ended March 30, 2019 and March 31, 2018 (in thousands):
|
Fair Value Measurement (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair value measured on recurring basis | The fair value hierarchy has three levels based on the reliability of the inputs used to determine the fair value.
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Business Segments (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Segments |
|
Revenue (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 30, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of Revenue | The following tables presents the Company revenues disaggregated by geographic area and major product types by reportable segment for the three months ended March 30, 2019 and March 31, 2018 (in thousands):
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Guarantor Financial Information (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Guarantor Financial Information [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Guarantor Financial Information Condensed Consolidating Balance Sheet | Condensed Consolidated Balance Sheet As of March 30, 2019 (in thousands)
Condensed Consolidated Balance Sheet As of December 29, 2018 (in thousands)
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Guarantor Financial Information Condensed Consolidating Statements Of Operations | Condensed Consolidated Statements of Operations For the three months ended March 30, 2019 (in thousands)
Condensed Consolidated Statements of Operations For the three months ended March 31, 2018 (in thousands)
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Guarantor Financial Information Condensed Consolidating Statements of Comprehensive Income/(Loss) | Condensed Consolidated Statements of Comprehensive Income/(Loss) For the three months ended March 30, 2019 (in thousands)
Condensed Consolidated Statements of Comprehensive Income/(Loss) For the three months ended March 31, 2018 (in thousands)
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Guarantor Financial Information Condensed Consolidating Statements Of Cash Flows | Condensed Consolidated Statements of Cash Flows For the three months ended March 30, 2019 (in thousands)
Condensed Consolidated Statements of Cash Flows For the three months ended March 31, 2018 (in thousands)
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Summary of Significant Accounting Policies Reconciliation of Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands |
Mar. 30, 2019 |
Dec. 29, 2018 |
Mar. 31, 2018 |
Dec. 30, 2017 |
---|---|---|---|---|
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 95,716 | $ 107,262 | ||
Restricted cash | 107 | 107 | ||
Total cash, cash equivalents and restricted cash shown in the consolidated statements of cash flow | $ 95,823 | $ 107,369 | $ 123,011 | $ 106,916 |
Investment in Unconsolidated Subsidiary (Assets, Liabilities and members' equity) (Details) - USD ($) $ in Thousands |
Mar. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
ASSETS | ||
Property, plant and equipment, net | $ 591,927 | $ 576,384 |
Diamond Green Diesel Holdings LLC Joint Venture [Member] | ||
ASSETS | ||
Total current assets | 225,948 | 186,258 |
Other assets | 26,427 | 24,601 |
Total assets | 844,302 | 787,243 |
Liabilities and members' equity: | ||
Total current portion of long term debt | 276 | 189 |
Total other current liabilities | 44,440 | 40,619 |
Total long term debt | 9,010 | 8,485 |
Total other long term liabilities | 4,612 | 539 |
Total liabilities and members' equity | 785,964 | 737,411 |
Equity Method Investment, Summarized Financial Information, Liabilities and Equity | $ 844,302 | $ 787,243 |
Investment in Unconsolidated Subsidiary (Revenues and Expenses) (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 30, 2019 |
Mar. 31, 2018 |
|
Expenses: | ||
Operating income | $ 48,237 | $ 194,022 |
Interest and debt expense, net | (324) | 0 |
Diamond Green Diesel Holdings LLC Joint Venture [Member] | ||
Revenues: | ||
Operating revenues | 302,718 | 150,321 |
Expenses: | ||
Total costs and expenses less depreciation, amortization and accretion expense | 243,063 | (49,821) |
Depreciation, amortization and accretion expense | 11,418 | 6,120 |
Total costs and expenses | 254,481 | (43,701) |
Other income | 641 | 377 |
Net income | $ 48,554 | $ 194,399 |
Acquisitions and Dispositions (Details) - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Mar. 30, 2019 |
Mar. 31, 2018 |
Dec. 29, 2018 |
|
Subsequent Event [Line Items] | |||
Acquisitions, net of cash acquired | $ 1,431 | $ 0 | |
Goodwill | 1,222,382 | $ 1,229,159 | |
Proceeds from sale of investment in subsidiary | 0 | $ 2,805 | |
Loss on disposal of subsidiaries | $ 0 |
Inventories (Details) - USD ($) $ in Thousands |
Mar. 30, 2019 |
Dec. 29, 2018 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Finished product | $ 176,451 | $ 176,184 |
Work in process | 81,242 | 78,501 |
Raw Material | 27,723 | 32,502 |
Supplies and other | 54,466 | 53,841 |
Inventories | $ 339,882 | $ 341,028 |
Accrued Expense (Details) - USD ($) $ in Thousands |
Mar. 30, 2019 |
Dec. 29, 2018 |
---|---|---|
Payables and Accruals [Abstract] | ||
Compensation and benefits | $ 75,568 | $ 91,851 |
Accrued income, ad valorem, and franchise taxes | 24,463 | 31,366 |
Accrued operating expenses | 59,763 | 62,247 |
Customer Deposits, Current | 31,563 | 30,741 |
Other accrued expense | 89,974 | 93,279 |
Accrued expenses | $ 281,331 | $ 309,484 |
- Components of Lease Expense (Details) $ in Thousands |
3 Months Ended |
---|---|
Mar. 30, 2019
USD ($)
| |
Leases [Abstract] | |
Operating lease cost | $ 12,317 |
Short-term Lease, Cost | 3,053 |
Total lease costs | $ 15,370 |
- Maturities of Operating and Financing Lease Liabilities (Details) $ in Thousands, € in Millions, $ in Millions |
Mar. 30, 2019
USD ($)
|
Mar. 30, 2019
CAD ($)
|
Mar. 30, 2019
EUR (€)
|
Dec. 30, 2018
USD ($)
|
Dec. 29, 2018
USD ($)
|
---|---|---|---|---|---|
Operating Leases | |||||
2019 (excluding the three months ended March 30, 2019) | $ 34,356 | ||||
2020 | 35,776 | ||||
2021 | 23,580 | ||||
2022 | 14,338 | ||||
2023 | 9,734 | ||||
Thereafter | 36,564 | ||||
Operating lease, obligations | 154,348 | ||||
Less amounts representing interest | (25,472) | ||||
Lease obligations included in current and long-term liabilities | 128,876 | $ 134,400 | |||
Capital Leases | |||||
2019 (excluding the three months ended March 30, 2019) | 217 | ||||
2020 | 153 | ||||
2021 | 6 | ||||
2022 | 6 | ||||
2023 | 0 | ||||
Thereafter | 0 | ||||
Finance lease, obligations | 382 | ||||
Less amounts representing interest | (16) | $ (20) | |||
Lease obligations included in current and long-term liabilities | $ 366 | $ 0.4 | € 0.1 | $ 415 |
- Other Information (Details) - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Mar. 30, 2019 |
Dec. 30, 2018 |
Dec. 29, 2018 |
|
Leases [Abstract] | |||
Operating cash flows from operating leases | $ 12,029 | ||
Operating right-of-use assets, net | 129,721 | $ 135,700 | $ 0 |
Operating lease liability, current | 39,776 | 0 | |
Operating lease liability, non-current | 89,100 | $ 0 | |
Operating Lease, Liability | $ 128,876 | $ 134,400 | |
Weighted average remaining lease term - operating leases | 6 years 4 months | ||
Weighted average discount rate - operating leases | 5.26% |
Leases - Future Annual Minimum Lease Payments and Capital Lease Commitments (Details) $ in Thousands, € in Millions, $ in Millions |
Mar. 30, 2019
USD ($)
|
Mar. 30, 2019
CAD ($)
|
Mar. 30, 2019
EUR (€)
|
Dec. 29, 2018
USD ($)
|
---|---|---|---|---|
Lessee, Operating Lease, Description [Abstract] | ||||
2019 | $ 46,316 | |||
2020 | 34,403 | |||
2021 | 22,252 | |||
2022 | 13,091 | |||
2023 | 8,478 | |||
Thereafter | 28,219 | |||
Total lease payments | 152,759 | |||
Capital Lease Obligations [Abstract] | ||||
2019 | 271 | |||
2020 | 152 | |||
2021 | 6 | |||
2022 | 6 | |||
2023 | 0 | |||
Thereafter | 0 | |||
Capital leases, due | 435 | |||
Less amounts representing interest | $ (16) | (20) | ||
Capital lease obligation included in current and long-term debt | $ 366 | $ 0.4 | € 0.1 | $ 415 |
Debt (Senior Notes Due 2022) (Details) - Senior Notes [Member] - Senior Notes 5.375% Due 2022 [Member] - USD ($) |
Mar. 30, 2019 |
Jan. 02, 2014 |
---|---|---|
Debt Instrument [Line Items] | ||
Face amount of debt instrument | $ 500,000,000 | |
Stated interest rate | 5.375% | 5.375% |
Debt Debt (Senior Notes Due 2026) (Details) - Senior Notes [Member] - Senior Notes 3.625% Due 2026 [Member] - EUR (€) |
Mar. 30, 2019 |
May 02, 2018 |
---|---|---|
Debt Instrument [Line Items] | ||
Debt Instrument, Face Amount | € 515,000,000 | |
Stated interest rate | 3.625% | 3.625% |
Debt Debt (Senior Notes Due 2027) (Details) - Senior Notes [Member] - USD ($) |
Apr. 03, 2019 |
Mar. 30, 2019 |
Jan. 02, 2014 |
---|---|---|---|
Senior Notes 5.375% Due 2022 [Member] | |||
Debt Instrument [Line Items] | |||
Face amount of debt instrument | $ 500,000,000 | ||
Stated interest rate | 5.375% | 5.375% | |
Subsequent Event | Senior Notes 5.25% Due 2027 [Member] | |||
Debt Instrument [Line Items] | |||
Face amount of debt instrument | $ 500,000,000 | ||
Stated interest rate | 5.25% |
Income Taxes (Details) $ in Millions |
Mar. 30, 2019
USD ($)
|
---|---|
Income Tax Disclosure [Abstract] | |
Unrecognized tax benefits | $ 4.3 |
Income tax penalties and interest accrued | 0.7 |
Significant change in unrecognized tax benefits is reasonably possible, estimated change, upper bound | $ 0.3 |
Stockholders' Equity (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Jan. 25, 2019 |
Mar. 30, 2019 |
|
Class of Stock [Line Items] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross (in shares) | 610,953 | |
Grants in period (in shares) | 305,195 | |
Annual vesting after initial cliff | 33.33% | |
Performance period two | 3 years | |
Target percentage | 100.00% | |
Remaining authorized repurchase amount | $ 200.0 |
Derivatives (Narrative) (Details) - USD ($) |
3 Months Ended | ||
---|---|---|---|
Mar. 30, 2019 |
Mar. 31, 2018 |
Dec. 29, 2018 |
|
Derivative [Line Items] | |||
Net income | $ 19,640,000 | $ 98,075,000 | |
Commodity Contract [Member] | |||
Derivative [Line Items] | |||
Forward purchase amount | 16,600,000 | ||
Cash Flow Hedging [Member] | |||
Derivative [Line Items] | |||
Cash flow hedge gain (loss) to be reclassified within 12 months | 2,100,000 | ||
Net income | 0 | ||
Designated as Hedging Instrument [Member] | Other Current Assets [Member] | Foreign Exchange Contract [Member] | |||
Derivative [Line Items] | |||
Asset Derivatives Fair Value | $ 4,000,000 | $ 1,600,000 |
Contingencies (Details) $ in Millions |
1 Months Ended | 3 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018
Party
|
Mar. 31, 2016
Party
mi
|
Mar. 30, 2019
USD ($)
contaminant
|
Dec. 29, 2018
USD ($)
|
|
Loss Contingencies [Line Items] | ||||
Loss Contingency, Estimate of Possible Loss, Area of Land | mi | 8.3 | |||
Loss Contingency, Estimate of Possible Loss | $ 1,380.0 | |||
Loss Contingency, Number of Parties | Party | 100 | 100 | ||
Number of contaminants | contaminant | 8 | |||
Insurance Environmental and Litigation Matters [Member] | ||||
Loss Contingencies [Line Items] | ||||
Reserves for insurance, environmental and litigation contingencies | $ 66.8 | $ 66.6 | ||
Insurance Settlements Receivable, Noncurrent | 26.1 | $ 26.1 | ||
Settled Litigation [Member] | ||||
Loss Contingencies [Line Items] | ||||
Loss Contingency, Number of Parties | Party | 20 | |||
Pending Litigation [Member] | ||||
Loss Contingencies [Line Items] | ||||
Loss Contingency, Estimate of Possible Loss | $ 165.0 | |||
Loss Contingency, Number of Parties | Party | 40 |
Business Segments (Narrative) (Details) |
Mar. 30, 2019
segment
|
---|---|
Segment Reporting [Abstract] | |
Number of Business Segments | 3 |
Revenue (Details) |
Mar. 30, 2019
source
|
---|---|
Revenue from Contract with Customer [Abstract] | |
Number of revenue sources | 2 |
Revenue Revenue from Long-term Performance Obligations, Narrative (Details) $ in Millions |
3 Months Ended |
---|---|
Mar. 30, 2019
USD ($)
| |
Revenue from Contract with Customer [Abstract] | |
Revenue recognized | $ 3.9 |
Revenue Revenue from Long-term Performance Obligations (Details) - Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-03-31 $ in Millions |
Mar. 30, 2019
USD ($)
|
---|---|
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Expected timing of satisfaction | 5 years |
Remaining performance obligation | $ 317.9 |
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